False Sense of Recovery at G-20 Summit in Pittsburgh

Chairperson, International Coordinating Committee
International League of Peoples’ Struggle
3 October 2009
Posted by (Bulatlat.com)

The leaders of the imperialist powers and the world’s other big economies concluded their G-20 summit in Pittsburgh, USA and declared the capitalist world economy on the path to recovery. They praised themselves for arresting economic decline and stabilizing financial markets, and for starting a reform process towards “strong, sustained and balanced growth in the 21st century”. Again they asserted that the crisis was only due to reckless and irresponsible financial behaviour. Since steps have begun to be taken to rein these in, they reiterated the promise that capitalism will bring development to billions of people in the world.

But these are all self-serving declarations diverting from the profit-driven laws of motion of capitalism and the gross reality of how billions of working people around the world are oppressed and exploited, denied real development, and driven into deeper suffering and backwardness. The global economy and the people are still in deep and acute crisis. Financial and industrial profits have momentarily risen in relation to their steep declines since last year – but this is only because of the unprecedented state bail-outs to monopoly capital, cost-cutting in the form of massive lay-offs and squeezing more surplus from the employed workforce.

Global output continues to contract, factories are still closing, millions of jobs are still being lost, millions are losing their homes, and family incomes and welfare continue to plunge. Conservative estimates are that the intensified crisis will see 50-100 million additional jobless aside from increasing the number of “working poor” to some 1.4 billion worldwide. This additional misery is on top of how even before 2008 there were already – again by conservative estimates – some 3.1 billion people poor, two billion without access to clean water, one billion going hungry every day, and 200 million outright jobless. Every year around 25 million people were already dying from curable diseases and 500,000 mothers dying during pregnancy and childbirth.

The touted beginnings of recovery are in any case a false dawn. They are largely hype to try and promote investor confidence and the illusion of market stability. The estimated US$10.8 trillion worth of stimulus so far are financed by soaring government debt which ominously creates problems in the near future. The US federal government alone already has US$11.8 trillion in debt even as it faces a deficit of US$1.8 trillion just for 2009 and trillion-dollar-plus deficits every year for at least the next decade.

Desperate fiscal stimulus programs are everywhere driving huge public deficits in the major imperialist powers. They are for instance to the order of 13.5% of gross domestic product (GDP) in the US, 11.6% in the UK, 7.4% in France and 10.3% in Japan – the highest seen since the Second World War. Even China’s vaunted economy and accumulated finance are at their limits. These are dangerous conditions for the people. At the very least the people will see education, health, housing and welfare services cut to give way to massive public debt service. But also very alarming is the menace of widespread defaults and financial meltdown with no more possibility of further state-driven bail-outs.

The G-20 declared their agenda to be coordinating policies for economic recovery, financial regulatory reform, and charting a course for high, sustainable and balanced global growth. In reality they are seeking ways to secure monopoly capital’s profits in the wake of the world capitalist system’s deepest global depression in nearly a century. The leaders tend to be preoccupied with using state power and public finance to generate bigger bubbles for the benefit of the monopoly bourgeoisie, especially the finance oligarchy. They have united on further shifting the burden of the crisis to the people of the world,

The G-20’s members include the United States of America (US), United Kingdom (UK), Canada, France, Germany, Italy, Japan and Russia – the members of the G-8 – with China, India, Indonesia, South Korea, Argentina, Brazil, Mexico, Saudi Arabia, South Africa, Turkey and Australia. They account for 80 percent of world trade, 85 percent of the world economy and two-thirds of the global population. Also involved are the heads of the International Monetary Fund (IMF), World Bank (WB) and World Trade Organization (WTO).

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