By Zely Ariane
“The global financial crisis is not because of a lack of regulations or because capitalists cannot be controlled; bur rather a crisis of over production throughout the world, namely too many good for sale (for profit) while (so as a result) the people do not have the purchasing power.” [Karl Marx, 150 years ago]
This crisis will be a permanent one. There is no other solution that can be pursued by capitalism other then to prolong and minimalise the impact through ongoing state intervention. This is because under capitalism, the state represents an instrument by which to rescue it from crisis; an instrument to protect profits, distribute misery, and provide the ordinary people with just enough to survive.
Trillions of dollars have already been provided to bail out bankrupt capitalists in the name of economic stimulus, far in excess of what has been given to the poor, so it is already clear that it will not have any basic impact on increasing the purchasing power of the ordinary people.
This systematic crisis has in fact occurred because the capitalist system that pays cheap wages (not in accordance with the actual value of workers’ labour) and the huge amounts of money that are not invested in the real sector (but in financial speculation, shares, portfolios, currency exchange and commodities) so that as a consequence, workers and ordinary members of the public have no purchasing power.
World in Crisis
Following on from the recommendations of the G20, several months ago leaders of the Asian Pacific Economic Cooperation (APEC) called for comprehensive reforms in a number of international financial institutions as one remedy for the crisis. They also declared that the principles of the free market, liberalised trade practices and open investment continue to be the engine of global economic growth. And simultaneously stipulate employment opportunities, which in the end will reduce poverty.
Eight years ago, before leaders of the Southern Countries, who are part of the G77 Group, Fidel Castro stated “Fifty years ago, we were promised... there would be no more misery... we were promised bread (prosperity) and justice; but up until now, we, the developing countries, have only reaped suffering, hunger and ever more injustice”.
Two-and-a-half billion (4 percent) of the world’s people live on less then $US2 a day, receiving only a 5 percent share of the world’s total income; while 54 percent of this income ends up in the pockets of 10 percent of the richest people in the advanced capitalist countries.
The majority of the poorest countries, at least the developing countries, that have the most debt, are the countries of the south. These countries represent 55 percent of the people in the world who live in poverty. As many as 85 percent of the 3 million productive young workers do not currently have productive lives; life expectancy is less than 40 years because of poor nutrition; and 800 million adults are illiterate as a result of debt dependency and technological and industrial backwardness.
These countries must bear the burden of paying US$13 in debt for every US$1 that they receive, moreover the poorest countries have already paid off US$550 billion in debt plus interest over the last three decades, and still owe US$523 billion to the debtor countries, the World Bank or the International Monetary Fund.
Over the last decade, the free market, which is claimed to be able to stimulate job opportunities, has contributed to the highest increases in youth unemployment in South-East Asia (85 percent), followed by Sub-Sahara Africa (34 percent), Latin America (23 percent), the Middle East (18 percent) and South-Asia (16 percent) [International Labor Organization, Global Employment Trends for Youth].
The capitalist financial institutions are currently seeking to reform the international financial institutions, the real meaning of which is: 1) reforms to increase the involvement (proportion) of developing countries (read raw materials and labour for the rich countries), in order to be able to control (ensure) that these countries will adopt forms of “protection” that would further endanger the economies of the advanced capitalist countries; and 2) greater financial bribes for these institutions for economic stimulus packages (read jacking up consumption).
Meanwhile what is these days referred to as financial market regulation is in fact ensuring a role of the state and or governments in advancing money (read redistribution from the rich to the poor) to cover losses suffered by the elite owned corporations (from the public), or “socialism for the rich”.
The Indonesian Situation
· Long before the financial crisis erupted in 2008, year by year Indonesia’s industrial capacity was being destroyed, particularly its forces of production, which are no longer significant enough to build self-sufficiency. Even compared with Bangladesh, the outlays for improving the forces of production are lower – where the outlays for training and improving human resources are above US$1 per capita; while in Indonesia it is less than US$1. As of February 2009, as many as 55.43 million people (53.05 percent) of Indonesia’s work force only had a primary school education.
· Investment—whether it be in the form of trade, industry or even services—is increasingly directed (both in the private as well as government sector) towards the concept of facilitating the flow of foreign capital. Foreign capital controls more than 85 percent of oil and gas exploration activities, 75 percent of all direct investment activities, almost 50 percent of the banking industry’s assets, almost 70 percent of the capital market, not to mention control in the form of more than 173 million hectares of land (for the exploitation of oil, coal and minerals along with plantations and forestry). Out of the 135 state-owned industries, only 69 now remain under government ownership, and by 2015 only 25 state-owned industries will be left. The Legal Education Entity Law also allows foreign capital to control as much as 40 percent of the higher education sector.
· Worker’s real wages have declined by almost 50 percent since 1997. The 228 billion rupiah received by the poor in the form of the Direct Cash Assistance program (BTL, supposedly to compensate the poor for last years fuel price hikes), the 11.2 trillion rupiah in School Operational Assistance funds (BOS) and the 4.6 trillion rupiah for the Health Insurance for Poor Families program (Askeskin) and welfare cards for poor households (Gakin), have to be fought over by 140 million people (those with an income of less than US$2 a day). This is not to mention other problems such as the extraordinarily difficult requirements and bureaucracy, inadequate funds and corruption (according to Indonesian Corruption watch, corruption in the healthcare sector has now reach a massive 127 billion a year).
· In 2008, a joint World Food Programme-UNICEF research project on food security found that the rural poor suffered more than the urban poor in Indonesia. Some 41 per cent of households surveyed no longer worked on their own farms but instead toiled as wage labourers and were dependent on food purchases from local markets. In 2009, early findings show they are eating cheaper, lower-quality food, relying on relatives and friends for additional money to buy food, buying non-food items on credit or reducing health expenses. School absenteeism is also being monitored.
· When the global financial crisis erupted, the Indonesian government immediately spent 1 trillion rupiah (around US$1 billion) in order to bailout the Century Bank, and 4 trillion rupiah to purchase shares in state-owned enterprises in order to prop up share prices. Fiscal incentives such as reducing corporate income tax rates from three layers (10, 15 and 30 percent respectively) will be the largest single component at 25 percent alone in 2009 and 25 percent in 2010. All of this was given to business; never mind that it was when employers were threatening to carry out mass layoffs. The total stimulus package in 2009 will be as much as 73.3 trillion rupiah; and 6.1 trillion rupiah in 2010.
· Dismissals, particularly of contract and temporary workers, according to the Indonesian Legal Aid Institute, reached 3 million people in 2008. This was followed by the national automotive industry where 20 percent of the work force has been dismissed. According to official figures by the Manpower and Transmigration Ministry, only 51,000 workers have been laid off this year. Yet the number of dismissals in Jakarta alone, since March 2009, has already reached 200,000.
· The foreign debt is also increasing rapidly from 1,275 trillion rupiah in 2004 to 1,667 trillion in 2009. The total domestic debt has also risen significantly from 662 trillion rupiah in 2004 to 920 trillion rupiah in 2009. Based on the time period (original maturity), 90.2 percent of this represents long-term foreign debt and 9.8 percent represents short-term foreign debt. As much as U$130 million in debt will fall due in 2009.
· Not long ago the Asia Development Bank (ADB) provided an additional loan of US$1.5 billion, Agence Francaise de Developpement (AFD) also disbursed loans of US$200 million, as part of a program to pay off the budget deficit that was included in a Climate Change Program Loan. This loan must be repaid within the next 15 years by every single Indonesian person. Currently, the total per capita debt in Indonesia stands at 11 million rupiah per person, increasing by as much as 5-8 million rupiah compared with three years ago.
How can we Fight for Socialism in the 21st Century
· Socialism is the only solution to these problems. Moreover social democracy, which is so highly regarded by the welfare state, will be unable to overcome this crisis. In Europe for example, increasingly large number of ordinary people are abandoning social democracy and are seeking radical decisions with regard to capitalist slavery.
· Learning from the political and economic errors in the practice of socialism in the 20th Century, in this century therefore a socialist renewal needs to be carried out. Socialism in the 21st Century must be democratic, participatory, feminist, modern and ecological. Socialism is already being developed within the people’s struggle in the 21 Century. And for this we have the people of Cuba and Venezuela to thank.
· Socialism in the 21st Century, the solution that we must propagandise in the struggle to take power, will not result in mass dismissals and crisis, because the funds that are already in our hands (in the initial stage) will be used to build the national industry (employment opportunities) under the control of the people and to pay workers a reasonable living wage. These funds will be obtained from: 1) taking over vital state assets—particularly in the mining, oil and gas industries, agricultural exports, forestry, the maritime sector, tourism, electricity and chemical industries (particularly pharmaceuticals), irrigation and so forth; and 2) from the centralisation and control of banking funds that can be channeled into the real sector and the people’s economy, appropriating the Bank Indonesia Liquidity Support Scheme (BLBI) buyback, cuts to state debt interest, repudiating or suspending the foreign debt, a progressive taxation system, utilising public savings (including funds from the Workers Insurance Program), seizing the assts of Indonesia’s corrupters (since 1965), work contracts with profit sharing, taxes and royalties that benefit the country, control and nationalisation of the distribution of mining produce, oil and gas and so forth.
· At this stage, the political struggle that we have launched is against the elite 2009 legislative and presidential elections, as part of the fight against the political enemies of the people. For this to be successful, unity is required among the millions of people in various sectors who are anxious about their futures.
· We believe that the priority for our propaganda work at present is teaching self-sufficiency, not trusting in the political elite, building the people’s own forces, which will be reflected through an united national anti-elite people’s movement. In sociological and historical terms, it is impossible for the Indonesian elite to complete this historical task; the elite do not have the capacity to overcome the country’s problems – even through social democracy (reformasi). The elite are totally corrupt, whether it is in terms of money, culture or politics.
· Building national unity such as this, as an alternative people’s power, is the most pressing tactical need in the struggle and must be prioritised now. With a united national political vehicle, the ordinary people will have greater potential to disseminate propaganda and compete for and win on the national political stage that up until now has been dominated by a majority of the political elite. It is because of this therefore, that national unity simultaneously means an overall strategy (campaigning on a broad scale), which is directed towards accelerating the leadership of the movement.
· This unity can be pioneered though propaganda in the form of reading material, joint press statements and the unification of public mobilisations, whether they be mass actions or mass meetings and provide significant benefits for dissemination of propaganda.
· In addition to the unification of mass mobilisations, in order to respond the people’s urgent problems right now, such as mass dismissals, unemployment, and a vehicle is needed to accommodate the people’s concerns. This will become the means to draw in those masses that are still anxious and not yet involved in the struggle.
· The gains of the vitality of the above strategy (which is supported by strategic forces from below – the organisation of the masses – that currently exist) can be expected to be able position the movement (its program and political tools) to present itself more broadly to the people, and because of this therefore, in dialectical terms, also facilitate the development of an underlying strategy and development along with the growth of the revolutionary party.
 Presented in public discussion “Capitalist Crisis; Socialist Renewal”, Sydney, 6 Juni 2009, diselenggarakan oleh Revolutionary Socialist Party (RSP)
 Spokesperson of KPRM PRD; International Officer of the Union for Political of the Poor (PPRM); Vice General Secretary of the Union of Worker’s Struggle Solidarity (GSPB); Coord. Department of Education National Network of Mahardhika Women (JNPM); Coordinator of Indonesian Solidarity for Latin America Alternative (SERIAL).