By Prof. Jose Maria Sison
Chairperson, International Coordinating Committee
International League of Peoples’ Struggle
3 June 2007

The 33rd G8 Summit will be held in the isolated Baltic resort of Heiligendamm in Germany from June 6-8, 2007. The G8 or Group of 8 is the most powerful alliance of the monopoly capitalist states. The G8 process is the most important way by which these states coordinate on policies for dominating the rest of the world, especially the semi-colonies and dependent countries, particularly in economic matters. Decisions taken by the G8 are subsequently carried forward and implemented by their state agencies (economic, political and military) domestically and internationally as well as bythe major US-controlled multilateral organizations, financial institutions and forums.

This year’s summit is held at a critical time for imperialism. On one hand, the economic and financial crisis of global capitalism continues to deepen and its adverse effects are mounting which makes it increasingly difficult for them to maintain their superprofits. US imperialism has unleashed brazen wars of aggression, such as those against Iraq and Afghanistan, to advance its economic interests. On the other hand, the worsening condition of billions of the world’s people is generating resistance and struggle against imperialist domination.

Crisis of “Neoliberal Globalization” Reflected by Agenda

The official motto of “Growth and Responsibility” is unable to conceal the critical situation reflected in this year’s G8 Summit agenda. The biggest capitalist powers are forced to confront the adverse consequences of recent decades of increasing “neoliberal globalization”. Global growth has become uneven, slower and more volatile. Since the “globalization” of the 1980’s, the growth rates of the world gross domestic product (GDP) have fallen to less than half of the more than 5 percent annual average in the first three decades after World War II.

Over a hundred countries have suffered 5-year periods of sustained declines in per capita income growth, not only in Africa but also in Asia and Latin America. Unrivaled speculative excesses and financial instability persist. At any time, only 2-5 percent of international financial transactions are related to trade and the productive economy. The US itself is confronted by historically large twin deficits in fiscal and trade transactions. Europe is saddled with collapsing domestic demand, while Japan remains mired in its decades-long slump.

In the face of all these and the resulting threat to their profits, the main objective adopted by the big powers is to push measures to further increase the imperialist export of capital by hastening the removal of investment barriers and of course to accelerate the remittance of profits and repatriation of capital. The number of liberalizing bilateral investment treaties alone has more than doubled from 1,100 in 1995 to nearly 2,400 a decade later.

The global total of foreign direct investment (FDI) has already risen nineteen-fold since 1990 and stands at over US$10 trillion. Yet unbridled greed and the need to combat the ever-present tendency for profits to fall have meant that even this is not enough. Foreign investment regimes in general, mining and natural resource extraction, and the plunder of the African continent are the real key areas for discussion in Heiligendamm.

The G8 is pushing for more open investment policies in the countries of Asia, Africa and Latin America which still retain vestiges, however scant, of controls on foreign capital. At the same time they aim to ensure their scientific and technological monopolies in the name of “intellectual property rights” and “promoting and protecting innovation”. The big powers will however retain their investment protections for their own monopoly capitalists even as they decry similar efforts of their rivals. US and European monopoly capitalists have already opposed attempted investment incursions and takeovers in their vital industries.

They also want to further open up the mineral and energy resources of neocolonies to foreign plunder under cover of “sustainable mining practices”. They will try to do all these through the resumption of World Trade Organization (WTO) talks. Apart from this they will continue pushing bilateral and regional free trade agreements (FTAs) as well as take more determined efforts in this regard through inter-governmental venues, such as the Organization for Economic Cooperation and Development (OECD) and the United Nations Conference on Trade and Development (UNCTAD).

Much-hyped by the imperialists and imperialist-funded “civil society” organizations are pretended measures to counter the adverse social effects of “globalization”, climate change and volatility in financial markets. Yet there is no recognition or acknowledgment that these are among the inevitable consequences of irrational capitalism and its central dynamic of profit-making. The G8’s efforts here are nothing more than embellishments on the system of plunder and peddling of the deception that capitalism can be “humanized” and “refined” to sugarcoat the dire and dismal results of “free market” policies. The misery and problems caused by “globalization” have become so obvious that the big powers have to make a show of addressing these.

Two years ago, during the G8 summit in Gleneagles, the deception peddled by the imperialists and pro-imperialist “civil society” organizations and some rock stars was the supposedly “historic” deal of US$55 billion in debt cancellation for a handful of deeply indebted countries. And yet today the whole of that trifling amount has not been canceled. Indeed, international usury and the crushing neocolonial debt burden of over US$2.8 trillion remain. Today the deceptions include such self-contradictions as “corporate social responsibility” and monopoly capitalists “promoting and developing social standards”. But the limits are clear and the G8 cannot but incongruously assert that the only “social protection systems” it is after are those based on privatized “self-responsibility and accountability”.

The declarations of concern over accelerating global warming likewise ring hollow. The fundamental cause of adverse changes in the climate is the unrelenting drive for profits of monopoly capitalism which aggressively pushes reckless consumption as well as production heedless of the long-term impact on the planet’s finite resources - including its forestry and energy resources - and fragile ecology.

Reflecting this, the single greatest source of destructive greenhouse gas emissions is US imperialism both in its homeland and through its plundering economic operations in semi-colonies and dependent countries, including China, India and Brazil. But not only is the G8 unable to address either of these, indeed it is even trying to use the specter of ecological catastrophe as a bogus basis of unity to further befuddle, co-opt and captivate the less critical segments of social movements.

The instability of financial markets is likewise also a matter of grave concern because of the adverse impacts on the real economy. However financial speculation has served as an increasing and important source of paper profits for monopoly capitalism confronted by its crisis of overproduction. This instability will then remain and can only worsen for as long as the big powers are after such profits. There is no historical precedent for any kind of mutual arrangement by monopoly capitalists to voluntarily reduce their profits. As it is, net capital outflows from the neocolonies or semi-colonies have been drastically increasing since the mid-1990s to the level of US$670 billion in 2006 alone.

The G8 and “Neoliberal Globalization”

The G8 was first organized as the G6 in 1975 with the US, Japan, United Kingdom (UK), West Germany, France and Italy. Canada joined, at the behest of the US, in 1976 to form the G7. And then nuclear power Russia joined in 1998 to form the G8. The alliance was put up as the global crisis of capitalism started to deepen further in the wake of US imperialism’s defeat in the Vietnam War. “Neoliberal globalization” and the renewed imperialist offensive on the people of the world soon got underway in 1979 upon the sudden spike of interest rates upon the initiative of the US.

Following the Third World debt crisis of the early 1980s, the G7 used its domination of the International Monetary Fund (IMF) and World Bank (WB) to force “free market” policies on neocolonies through stabilization programs and structural adjustment programs (SAPs). At the same time, monopoly capitalism squeezed the wages, benefits and social services to the detriment of the working people. Come the 1990s, the biggest G8 powers extorted more and more bilateral and regional free trade agreements (FTAs) as well as used the WTO to come up with multilateral trade and investment agreements of unprecedented global scope.

The G8 countries constitute some 14 percent of the world population (with 856 million combined) and account for 63 percent or nearly two-thirds of world gross domestic product (GDP) at the level of US$28 trillion combined. The US is far and away the biggest economic power taking up 28 percent of world GDP followed by Japan (10 percent) and Germany (6 percent). The G8 accounts for half of worldwide trade in goods and, reflecting their increased direct investments in production networks in the neocolonies, import slightly more than they export. They completely dominate the IMF by taking up nearly half of its voting power (48 percent), and likewise the WB by the same measure. In the WTO the biggest factor determining the direction of talks is whether and how far the US and the European Union (EU) give or withhold their assent.

Their military spending for defending and advancing their imperialist agenda is enormous and far beyond what might be legitimately needed for self-defense. Combined G8 spending in 2005 of US$707 billion is 71 percent of total world military expenditures. The US takes up the overwhelmingly largest share with US$478 billion in spending (48 percent of world total), distantly followed by the UK and France (5 percent each) and Japan (4 percent). Four of the G8 members - US, UK, France and Russia - together account for 98 percent of the world’s some 100,000 nuclear weapons.

Imperialism has used this economic and military might for the last three decades to aggressively push policies of “neoliberal globalization”: de-nationalization of neocolonial economies, trade and investment liberalization, privatization and deregulation. These “free market” policies aim to support monopoly capitalist profits and overcome the crisis of global capitalism that has intensified since the 1970s. The imperialists further exploit the cheap labor, natural resources and markets of neocolonial economies.

They have had great success in imposing their plunderous policies on the people. In the last two decades, worldwide cross-border direct investments have increased by some 14 percent annually while world investments have increased by around 10 percent. About a third of these investment flows have been to the neocolonies.

The propaganda that “globalization” would lead to development and a capitalist utopia is a deceit that cannot be sustained. It was not long before the utter failure of these policies to result in any sort of development as well as their real objective of feeding unbridled monopoly greed was exposed by the harsh reality of far worse capitalist oppression and exploitation, resulting from the accelerated concentration and centralization of capital in the global centers of capitalism and the consequent devastation of the general run of neocolonies.

Monopoly capitalists have reaped their profits in the only way possible for them: at the expense of the world’s working people and, indeed, of the planet’s fragile ecology. The removal of global investment barriers has already resulted in the effective doubling of the global cheap labor force that capitalism can prey on. Even as only scant millions are eventually employed, the effect of the bloated reserve army of unemployed labor is severe. Unions have been attacked to bring about declines in real wages and social entitlements, at the same time as welfare systems are privatized and dismantled. Since 1980, the share of labor’s wages and benefits in national income in the G7 has fallen by 4 percentage points even as corporate profits as a percentage of GDP increased by the same amount to reach historical highs.

Backward neocolonial agricultural and industrial producers have been overrun at the same time as scarce natural resources have been exploited by big corporate mining and agri-business investments. Millions of peasants have been economically and physically displaced. This has caused human misery to continually expand. Global unemployment and poverty are massive. Some 3 billion people, or half of humanity, struggle to survive on US$2 or less a day. Over 750 million people are without jobs worldwide. And even among the employed labor force of the 2.8 billion, half are unable to earn enough to bring their families above the US$2 a day poverty line. Nearly a billion people are undernourished worldwide, most of which are in Asia, Africa and Latin America but also including some tens of millions even in the industrialized countries. All these expose the hypocrisy of the G8’s showy declarations of pretended support for social standards and decent work for the laboring people.

The injustice of capitalism is affirmed by the worsening living conditions of the people. It is due to the rapacity of the monopoly bourgeoisie that controls the world’s resources and production and corners the benefits of economic activity. “Globalization” has resulted in unprecedented inequality. The richest two (2) percent of adults worldwide own more than half of global wealth, while the poorest 50 percent own barely one (1) percent. Meanwhile, nine-tenths of the richest one (1) percent of adults worldwide live in the G7 countries. Indeed the net worth of the richest 500 monopoly capitalists of US$2.6 trillion is equivalent to the annual output of the world’s 48 poorest countries or to the income of the world’s poorest 416 million people.

The deteriorating plight of the world’s people is intrinsic to capitalism and G8 shows of false concern and “social responsibility” cannot ever resolve these. Indeed all the G8 can do is endlessly repeat the deception that “free markets” and capitalism offer the only path to human development.

Resistance to the G8 and Imperialism

The unbearable situation wrought by “neoliberal globalization” has fueled ever-mounting people’s mass actions and other struggles. There have been protests against the G8 since the mid-1980s with counter-summits held highlighting the crushing debt burden of the underdeveloped countries. Mass demonstrations began to grow in size since the mid-1990s when a broad range of trade unionists, peasant organizations, indigenous groups, women’s organizations, church workers and other social activists started coming together to protest during the G8 summits.

By the G8 summits in Genoa (2001) and Gleneagles (2005), up to 200,000 protesters were taking to the streets. All these moreover occurred amidst worldwide and year-round mass actions opposing imperialist “globalization” including demonstrations, rallies, roadblocks and even general strikes involving hundreds of thousands up to millions of people. These struggles have been met with violent political repression and state terrorism not just in Asia, Africa and Latin America but in the imperialist countries themselves.

State security forces in Europe - not just in Germany but also in France, UK and the Netherlands - have been cracking down on anti-G8 organizations in the months leading up to the June summit. Civil and political liberties have been systematically violated and justified as part of “anti-terrorism” campaigns legally sanctioned by repressive post-9/11 laws. Groups that are preparing to hold or protest activities or have already launched build-up activities have been subjected to raids, arrests and detention.

Protest marches and actions have been broken up. In Germany, thousands of police have conducted synchronized raids in the cities of Berlin, Hamburg, Bremen and other northern towns. Homes and offices have been ransacked and files, materials and equipment confiscated. As it is, the imperialist powers are forced to hold their summit and declare their more intense offensive against the people of the world from behind a 14 kilometer steel and concrete barrier.

Monopoly capitalism is increasingly desperate in its efforts to deal with the deepening global economic crisis. The limits of gfree market globalizationh have been exposed by the relentless worsening of the crisis since the late 1990s. Such a policy have only served to accelerate the concentration and centralization of capital in a few imperialist countries and have resulted in a series of grave economic and financial crisis.

No less than the US, the principal beneficiary of the neoliberal policy, is battered by its domestic economic crisis. It has resorted to gmilitary Keynesianismh in a futile attempt to stimulate the US economy by stepping up military production and pouring state financial resources into gilded contracts with the military industrial complex. To this end, it has stepped up war hysteria, unleashed wars of aggression, engaged in foreign military intervention on a widening scale and promoted state terrorism and fascism on a global scale under the pretext of anti-terrorism.

US imperialism is using its military superiority to expand its economic territory and political hegemony. It tries to maintain the imperialist alliance against the proletariat and people of the world and against the semicolonies and dependent countries. But the crisis of the world capitalist system has become so grave that it disturbs the balance of forces among the imperialist powers and is generating sharper inter-imperialist competition and rivalries.

The pressures for a redivision of the world are growing. The US is facing increasingly strong demands from Russia which has nuclear weapons and massive oil resources as bargaining levers as well as from the European Union and Japan which are trying to overcome decades of military inferiority and submissiveness to the self-aggrandizing initiatives of the US. Direct hostile confrontations among the imperialist powers are not yet occurring but they wrangle more than ever before over the spoils in the semicolonies and dependent countries.

At present, the US is most hard-pressed by its continuing failure to pacify the people of Iraq and Afghanistan and is unable to collect the prize for its wars of aggression. Instead, it is incurring heavy casualties and financial losses and is sinking in a quagmire. It is lessening its ability to pay adequate and timely attention to other countries and continents of the world. Conditions are favorable for the rise of anti-imperialist mass movements and revolutionary armed struggles for national liberation, democracy and socialism on a global scale.

The G8 summit is an opportune time to highlight the grave and insoluble problems faced by the imperialist powers and to bring forward the historic struggle against imperialist oppression and exploitation.

The International League of Peoples’ Struggle calls on all its participating organizations to expand their ranks and build anti-imperialist and democratic united fronts at the level of national chapters, global regions and the whole world. The daily worsening conditions of oppression and exploitation require the ILPS to intensify its efforts to arouse, organize and mobilize the people in their millions for the cause of greater freedom, development, social justice and world peace against imperialism and reaction. ###

On behalf of the International League of Peoples’ Struggle, I wish to convey warmest greetings of solidarity to BAYAN-USA on the occasion of its Second Congress. We congratulate you for all your achievements. And we wish your Congress the utmost success in paving the way for greater achievements until the Third Congress,

We are requested to make a brief statement on the Philippine situation and the US and international situation. We hope that this statement would help you in making your own assessment and evaluation of the same situations, in summing up and analyzing your experience and in planning your work.

1. The Philippine situation

The agrarian, pre-industrial and semifeudal character of the Philippine economy has been aggravated and deepened by “neoliberal globalization”. This has favored the US and other foreign multinational firms and banks and has worked against any prospect of development through genuine land reform and national industrialization.

It has pushed the de-nationalization of the Philippine economy, liberalization of investments and trade, privatization of state assets and deregulation against the working people, women, children and the environment. The Philippines has been reduced to producing raw materials and low-value added semi-manufactures for export. All of these are in oversupply in the global market and suffer from depressed prices.

To cover trade and budgetary deficits, the Arroyo regime has gone into an unprecedentedly heavy foreign and local borrowing. It has also used the foreign exchange remittances of Filipino migrant workers. Further it has raised the tax burden on the people despite the depressed condition of the economy. The financial resources have been used mainly for debt service, military expenditures and other nonproductive purposes.

The problems of unemployment, low incomes, breakdown of social services and mass poverty will worsen this year because of the expected fall in US demand for raw materials and consumer semi-manufactures. The socio-economic crisis in the Philippines will sharpen. It will generate ever greater social discontent among the broad masses of the people and will stimulate the advance of the people’s war. It will impel further violent contradictions among the reactionary factions of the ruling classes.

The Arroyo regime has tended to monopolize the decreasing amount available for bureaucratic loot and has tended to use violence against the broad range of opposition and the people. It is driven by its own greed for lucre and power and by the preemptive war of terror that Bush has been pushing. It is escalating the low-intensity warfare. This is characterized by the most vicious psywar campaigns of intrigue and slander and by the most brutal forms of human rights violations, including extra-judicial killings, abductions, torture and forced evacuations of entire communities.

Arroyo has usurped the presidential office through electoral fraud. She is deliberately using state terrorism to preempt the people and the legal opposition from rising to oust her. She has placed the most notorious rascals to do her bidding in the military chain of command. As a result, several anti-Arroyo groups of officers with sizeable following have developed within the reactionary armed forces.

Arroyo has become thoroughly discredited and isolated. The bishops of the dominant church and business organizations have joined the broad opposition to foil her charter-change scheme, which seeks to keep her in power under the guise of changing the form of government from presidential to parliamentary. At the same time, the armed revolutionary movement is growing and is exerting pressure on the ruling system.

The broad masses of the people and the broad united front are likely to oust the Arroyo regime in 2007. The regime is expected to arouse the people’s wrath either by cancelling the 2007 elections or holding these and stealing the votes as in 2004. But many other possible criminal acts of the regime can incite the people to rise up in the streets by the hundreds of thousands. The severity of the socio-economic and political crisis of the ruling system makes the Philippine situation very volatile.

2. The US and world situation

It is appropriate and necessary to start with the US in looking at the world situation. The US is supposed to be the main engine of global economic growth, the principal destination of financial flows and the market of last resort for the entire world capitalist system. It is the main beneficiary of “neoliberal globalization”, which the US and other imperialist powers have considered since 1980 as the permanent solution to the problem of stagflation.

Such a solution involves pushing down the wage level and cutting back on social benefits and accelerating the concentration of capital in the hands of the monopoly bourgeoisie through tax cuts, gilded state contracts and attraction of foreign buyers of bonds and stocks. “Neoliberal globalization” has aggravated and deepened the crisis of the US and the world capitalist system by pressing down the incomes of the working people and thereby constricting the market.

In fact, the US has had a bad economic fall since 2000, following the bursting of the “high-tech bubble” and the decline of US industrial production due to the global crisis of overproduction in all type of goods. It appeared to recover in 2004 only because of the heavy flow of finance capital into military production, overseas military force deployment and the “housing bubble” which served to back consumer spending.

The US has started to take another downturn. Financing US consumerism with foreign borrowings is unsustainable because the US has to pay the interest on the treasury bonds in foreign hands. Also, for the consumers, there are limits to depending on housing overvaluation to support their consumption,

The high-tech military production favored by the Bush regime can conjure economic growth on paper for a while but is unable to increase regular employment. At the same time, the US is incurring bigger and bigger losses in Iraq as it fails to subdue the Iraqi people’s resistance. It cannot draw profits from the Iraqi oil wells as the resistance often blows up the oil pipelines and other facilities.

Ever more afflicted by economic and financial crisis, the US is increasingly in contradiction with its imperialist allies. The WTO has been shaken by the failure of the Doha conference to settle the differences between the US and Europe. The US economic slowdown and reduction of consumer demand will have adverse effects on Japan, China, South Korea and Taiwan and the rest of East Asia.

By getting itself into a quagmire in Iraq, the US has been substantially distracted even in the Middle East and Central Asia. Independently of the US, France, Germany, Russia and China make their own deals with Iran. Russia, China and other border countries in Central Asia have made the Shanghai Cooperation Organization to counter US and European or NATO penetrations.

The East Asian economies are tending to make their own trade and economic agreements without the US. The DPRK has successfully defied the US on the issue of nuclear bomb testing. Some Latin American countries have mocked at the US-initiated multilateral trade agreements and have undertaken the nationalization of oil and gas companies.

The US is exposing its weaknesses and vulnerability due to its imperial overreach. The American electorate has given Bush a drubbing in the US mid-term elections by giving the Democrats a majority of the seats in both houses of Congress. The neoconservatives that pushed the Project for a New American Century and the strategic line of using the high-tech military power to attack “rogue states” and potential rivals are increasingly being discredited.

The American people have seen the folly of spending USD 350 billion on the war of aggression in Iraq and tardily appropriating only a few billions for the victims of hurricane Katrina. For the people, the human and financial cost for US is intolerable. The US military recruiters are faced with big shortfalls in their recruitment drives and are resorting to overseas recruitment of non-US citizens. After trying to criminalize the undocumented immigrants, the Bush regime is planning to turn them into military mercenaries with offers of green cards and a fast track to US citizenship.

The investigation of Bush, Cheney and the rest for impeachable crimes is now a distinct possibility. The crimes include lying for the purpose of aggression, corrupt practices in the making of war contracts, the use of torture and other gross human rights violations. There are now greater chances of undertaking actions to reverse the fascistic legislation (USA PATRIOT ACT and Military Commissions Act of 2006) and practices that the Bushites have pushed in the name of anti-terrorism in the US and on a global scale.

But the military-industrial complex and the big oil companies are trying to make compromises between the Republicans and Democrats and to fix the mass media for steering public opinion away from demands of criminal investigation and impeachment. The Bush regime is still frantically looking for ways to pursue its policies of plunder, repression and war. The broad masses of the American people and the progressive forces need to be vigilant and militant against the rapacious and aggressive character of US imperialism.