1 China can ride out this crisis, but we are on course for another (Seumas Milne in The Guardian) Seven years after the collapse of Lehman Brothers brought down the global financial system and plunged half the world into a slump, it’s scarcely alarmist to see the financial panic as the harbinger of a new crisis in a still crippled world economy.
The market gyrations that followed “Black Monday” this week and the 40% drop in the value of Chinese stocks since June have only underlined the fragility of what is supposed to be an international recovery. After three decades of deregulation punctuated by financial crises and a systemic meltdown, there is every reason to fear more fallout from casino capitalism.
Financial markets pumped up with credit and quantitative easing to keep the real economy afloat are in any case ripe for a crash – or “correction”, as the market players like to call it. The only question is how far and fast they go – and how great is the price paid by the rest of us.
Paradoxically, Beijing may be better placed than others to ride out this storm. China’s economy is slowing down, as it shifts from export-led growth to consumption. But it’s still growing at 7%, nearly three times as fast as Britain and the US, which are supposed to be the west’s current star performers.
China rode out the 2008 crash by pumping public investment into the economy, delivering 78% growth between 2007 and 2014, while the US managed 8%. That has left it with a huge debt pile, estimated at 282% of national income, which some now believe will bring China’s economy to a juddering halt. But that is mostly debt between state-owned institutions, so there is no basis for a speculative Lehmans-type collapse.
A dysfunctional model of capitalism, built on deregulation, privatisation and low wages, crashed and burned seven years ago. But the fallout from that crisis is still ricocheting around the world. Any idea that the western economies that generated stagnation have been fixed is not serious. Their recoveries have been the slowest on record and interest rates remain at a historic low – because owners of capital are prepared to invest in anything except the productive economy.
The likelihood must be that this stagnation continues indefinitely, punctuated by financial upheavals. Without far-reaching change in economic policy, they can be expected to trigger crises that will tip western economies, and others, back into full-blown recession.
3 Protests, clashes in India for job reservations (San Francisco Chronicle) Clashes erupted overnight between police and members of a farming caste demanding government benefits in western India’s Gujarat state. Authorities sent paramilitary forces to help restore order Wednesday, as the group’s leader called for a strike.
On Tuesday, Patel leaders led a rally attended by 500,000 Patels from across Gujarat. Later, police detained the group’s 22-year-old firebrand leader Hardik Patel, prompting members of the community to rampage through cities in Gujarat.
The Patidars, also known as the Patel community for the last name they share, are demanding the special status given to many minorities in India, guaranteeing them a share of government jobs and school places. The Patels, which make up about 20 percent of Gujarat’s 63 million population, say their livelihoods based on seasonal farming and small industry have become increasingly difficult amid India’s agricultural malaise and rapid economic growth marked by high inflation.
India’s constitution sets out affirmative action, called reservations, for India’s lowest Dalit and untouchable castes to help them overcome centuries of discrimination. That has been expanded over the years to include several other relatively disadvantaged low caste groups.
Because reservations allow easier access to government jobs, schools and universities, they’ve become a huge political bargaining chip in this country of 1.2 billion, and over the last decade several groups have led violent protests to demand that they be counted at the bottom of the country’s complex caste system.
3 Art as a country’s heartbeat (Leonie Wagner & Gabe Mbele in Johannesburg Times) If South Africa is flat-lining, then arts and culture are the defibrillator. This is according to some artists at the launch of the Department of Arts and Culture’s Living Legends Legacy Project, which is intended to promote cultural development through mentorship and master classes.
Minister Nathi Mthethwa has pledged R5-million as an initial investment. Veterans such as Joe Mafela, Abigail Kubeka, Don Mattera, Caiphus Semenya and Thandi Klaasen will run master classes and mentor up-and-coming artists.
Director and playwright John Kani and musician Simphiwe Dana said more funding was needed. Kani said that the lack of funding was a reflection of the government’s attitude to the arts. “It makes me angry that arts and culture are not [on the government’s] agenda. We’ve lost our humanity because we are so focused on maths, science and engineering. Ubuntu was not found in science, it’s in the arts.