Delivered in the Pacific Forum on Neoliberalism, Militarism, Climate Change and Displacement, October 15, 2020, Auckland, Wellington, organized by the Asia Pacific Mission for Migrants
We are facing the greatest health crisis in the modern era, which undeniably will have serious impact on our lives at so many levels – personal, local, national, global.
COVID will have a cure for sure (although we are not so sure if this will be the last strain of the coronavirus), but the disruptions COVID-19 has triggered on top of our pre-existing crisis shall have grave consequences on international relations, national and global economies, even cultures and individual behaviors.
Before the pandemic, the world was already clearly having its worst crisis. COVID has only accelerated pre-existing trends and exacerbated the worst aspects of the global crisis. COVID in a lot of ways is an external shock to the system, yet its roots are also systemic.
Before COVID, the credibility of neoliberalism – the dominant policy regime for the past four decades that has shaped everything in our socioeconomic life – was vastly diminished. We in the poor regions had been told to open up; liberalize foreign trade and financials; privatize public utilities, social services, and even natural resources; deregulate government and simply allow private individuals and companies to govern; and flexibilize labor, the social contract, and the mobility of workers.
We had been told to abide by these policies in the name of development. But since then we have only faced one crisis after another – economic crisis, ecological and climate crisis, social conflict, and geopolitical instability and human insecurity.
Worse economic crisis
The latest explosion of the overall crisis of the system that started in 2008 remains a protracted recession. If we project the full impact of COVID-19, it is going to be far worse than 2008, the International Monetary Fund has said, and it is going to be the worst since the Great Depression.
Rich country governments, the Group of 7, and their transnational corporations and transnational banks have been raking in immense profits from the planet’s labor and natural resources. Neoliberal policies and the global agencies including the United Nations that have embraced neoliberalism as their dogma have allowed this plunder of the world’s economies at so much ferocity.
Today, as reported by Oxfam, 1% of the world’s population own more wealth than the other 99%; 1% pocket about 82% of the wealth created. Imagine 42 people owning the same amount of wealth as the poorest 3.7 billion people.
From March to May 2020, during the lockdown, Forbes reports that 25 richest individuals are even wealthier by US$255 billion. This is while millions of us have lost irrecoverable jobs and incomes and would take another decade to get back on our feet again.
There were 188 million unemployed in 2019, equivalent to 5.6% of the global labor force, statistically unchanged since 2008, but a figure that does not yet include 165 million people in insufficient paid work, 125 million discouraged workers (thus not counted as part of the labor force), and 2 billion people in informal employment.
There is a new tidal wave of mass joblessness under COVID, with estimated 400 million “equivalent” full-time jobs lost (which could be four times as number of persons due to job-sharing and rotation) during the second quarter of 2020 and another 470 million people in jobs distress.
The contrast between corporate profits and wages had been stark. Since the 1980s, and even more so since 2008, shares of revenues that went to corporations’ profits had increased over time while shares of revenues going to workers had declined. Corporate profits even reached a peak in 2018, a trend last seen six years ago.
These pre-existing trends have worsened with COVID. Just try to imagine that while Jeff Bezos, the CEO of the retail giant Amazon is accumulating wealth at this point, the workers are demanding paid sick leave and protection from the spread of coronavirus, and are actually getting infected.
The global economy is experiencing prolonged stagnation. Since 2008, we have been witnessing a slowing and eventually declining global trade (the trade tensions between the US and China was just the tip of the iceberg) and weakening and tepid foreign investment flows. All these would manifest in the global GDP growth that has never been recovered, and is now forecast to slow down even further.
The neoliberalists are pessimistic, but vicious nonetheless. As in their knee-jerk, reckless reaction to the 2008 global financial crisis that only intensified the crisis, governments are bailing out corporations (including even US weapons manufacturers) and banks and financial institutions, while going stingy on protective equipment and compensation for health and frontline workers and socioeconomic relief for millions of farmers, workers, informal workers, micro businesses, and returning migrant workers.
Meanwhile, multilateral institutions are recycling debt as budgetary support to stimulate and quickly recover economies to continue to be open to capital accumulation by transnational corporations and domestic economic oligarchs. These loans are in the guise of COVID-19 assistance, but the World Bank is explicit, these loans are to “maintain the private sector”.
The IMF and the World Bank have deferred debt payment collections from selected countries, not as relief or for cancellation, nor out of sheer goodwill, but to prevent debtors from succumbing to severe debt-driven crisis due to COVID which would stop them from paying anything at all in the future.
Global debt is at record high, even without COVID, reaching US$255 trillion equivalent to 322% of global GDP. This is estimated to have reached US$370 trillion in the first 7-8 months of 2020, taking note too that global GDP is forecast to decline, which means a higher debt-to-GDP proportion.
But the pandemic here has been merely preceded by a déjà vu of the episodes before 2008 – the continuation of the involvement of nonfinancial institutions in financial activities, concentration of share ownership in the hands of financial intermediaries, debt-driven consumption, and privatization or the systematic flows of public resources to private profits. All these would predictably lead to an even worse debt crisis explosion in the not-so-distant future.
This anarchic and unsustainable system of production and resource extraction is the root of the climate emergency that the planet is facing today. One of the ironies of climate change and the reason why it is an issue that reflects social injustice is that while the rich countries and their corporations are largely responsible for it, it is the underdeveloped, poor countries and their poorest social sectors which are most vulnerable to the impacts of the climate crisis.
We have been plundered and impoverished through colonization and neocolonial intervention. Now, this same underdevelopment limits us to adapt to climate change and its hazards, while the rich countries continue to deny climate reparations.
Before COVID, global climate negotiations were going nowhere. Ironically still, governments and neoliberal institutions continue to propose even harsher neoliberal policies supposedly to allow the poor countries to manage and reduce disaster risks. They encourage us to be “resilient” to “build back better” – a much-abused term especially for countries such as ours which are perpetually in crisis.
Capitalism is replete with ironies. Today, packaged as COVID response, they are proposing a “new normal” (a not-so-novel term that is proposed every time the global economy goes through devastating crisis episodes), which is pictured as a healthier, smarter, fairer, greener, better economy. A new normal that is framed within the much-coopted sustainable development goals, therefore there is no mention of whether the world is retreating from the unbridled production system and disastrous neoliberal policies.
Neoliberalism is dead even before COVID. The multilateral institutions are one in recognizing that it is facing an “existential crisis”, but they are also in unison in defending that it should be kept alive. Like a zombie.
Neoliberalists are still selling the idea that an open global trading system increases incomes, reduces poverty, and brings about sustainable development. The G7 are saying “trade, not protectionism” will help fight COVID, even if countries led by the G7 have terminated liberalizing measures and increased protectionist measures in the last couple of years. It is a scam – we are being told to open up while they are protecting themselves.
Like a zombie, neoliberalism does not make sense anymore but its logic just keeps stumbling on. The global economy has been idling for some time even before COVID, a situation where only a little debt can be created to drive growth. Now in the time of COVID, the little economic activity there is (or was) to pay off the old debt has been destroyed.
Global capitalism, like a zombie, lacks intentional thought and long-term planning. But can it get any worse in the COVID era? Militarism and the rise of authoritarian governments and demagogues are phenomena that coincide with the implementation of harsher economic policies and more intense profitmaking. These trends engender increasing fanaticism, racism, xenophobia and chauvinism, especially against migrants and refugees.
Many authoritarian governments have used the pandemic as pretext for greater political repression. Their response to the pandemic has been quite disruptive – they have resorted to lockdown and quarantine measures, drastic restrictions and reduced socialization, and severe disruptions to economies and livelihoods. Governments have used the military more than their health workers to respond to the virus to wield state power and make militarization acceptable.
In the process, COVID has drastically escalated government control of people’s daily life, depending on political systems and institutions in place. Some of our governments have also exploited the pandemic for self-serving political and economic ends.
Thereby, governments have escalated borrowing to save their businessmen. Public debt as percent of GDP has surged to levels that surpass the record in 1946. Yet, governments have controlled the national budgets to save business and capital more than support the working people, boost health and social services, and protect and rehabilitate the ecosystems.
Thereafter, and only within that political prerequisite, neoliberalism may continue to walk on, more violently, more aggressively, to look for new opportunities for profit, which at this point we can only guess may be the COVID vaccine, online consumption and e-commerce, digital technologies, big data, crop and climate insurance, infrastructure, among others.
We may survive the pandemic, but we are headed towards even greater downward pressure on wages and working conditions amid greater repression of organized labor. We are headed towards increasing compulsion of capitalists to seek rapid growth at all costs, including environmental and social costs.
There is an upsurge in mass actions and protests worldwide, which is the bright light in our social unrest. That is reclaiming our social solidarity and fighting this menace, because there is no better way.
It is ugly, persistent and dangerous. Like a zombie, neoliberalism or global capitalism in general continues to decay – it is not capable of getting better or reformed. It has to be killed.
I leave you for inspiration the image of the October 7, 2020 mobilization of thousands of Indonesian students and workers protesting a new law that they say will cripple labor rights and harm the environment. With this, we can say, after all, the future looks bright.