The World Bank has sounded the alarm, but the forces of “centrism” — beholden to billionaires and the politics of austerity — refuse to pivot away from the neoliberal catastrophe, writes Vijay Prashad.
By Vijay Prashad
Tricontinental: Institute for Social Research
On Jan. 8, large crowds of people dressed in colours of the Brazilian flag descended on the country’s capital, Brasília. They invaded federal buildings, including the Congress, Supreme Court and presidential palace and vandalised public property.
The attack, carried out by supporters of former President Jair Bolsonaro, came as no surprise, since the rioters had been planning “weekend demonstrations” on social media for days.
When Luiz Inácio Lula da Silva (known as Lula) was formally sworn in as Brazil’s new president one week prior, on Jan. 1, there was no such melee; it appears that the vandals were waiting until the city was quiet and Lula was out of town. For all its bluster, the attack was an act of extreme cowardice.
Meanwhile, the defeated Bolsonaro was nowhere near Brasília. He fled Brazil prior to the inauguration — presumably to escape prosecution — and sought haven in Orlando, Florida.
Even though Bolsonaro was not in Brasília, the Bolsonaristas, as his supporters are known, left their mark throughout the city. Even before Bolsonaro lost the election to Lula this past October, Le Monde Diplomatique Brasil suggested that Brazil was going to experience “Bolsonarism without Bolsonaro.”
This prediction stems from the far-right Liberal Party, which served as Bolsonaro’s political vehicle during his presidency, holding the largest bloc in the country’s Chamber of Deputies and Senate and the toxic influence of the right wing persisting both in Brazil’s elected bodies and political climate, especially on social media.
The two men responsible for public safety in Brasília — Anderson Torres (the secretary of public security of the Federal District) and Ibaneis Rocha (the governor of the Federal District) — are close to Bolsonaro.
Torres served as the minister of justice and public security in Bolsonaro’s government, while Rocha formally supported Bolsonaro during the election. As the Bolsonaristas prepared their assault on the capital, both men appeared to have abdicated their responsibilities: Torres was on holiday in Orlando, while Rocha took the afternoon off on the last working day before the coup attempt.
For this complicity in the violence, Torres has been dismissed from his post and faces charges and Rocha has been suspended.
The federal government has taken charge of security and arrested over a thousand of these “fanatic Nazis,” as Lula called them. There is a good case to be made that these “fanatic Nazis” do not deserve amnesty.
The slogans and signs that pervaded Brasília on Jan. 8 were less about Bolsonaro and more about the rioters’ hatred for Lula and the potential of his pro-people government. This sentiment is shared by big business sectors — mainly agribusiness — which are furious about the reforms proposed by Lula.
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The attack was partly the result of the built-up frustration felt by people who have been led, by intentional misinformation campaigns and the use of the judicial system to unseat Lula’s Workers’ Party (PT), through “lawfare,” to believe that Lula is a criminal — even though the courts have ruled this to be false.
It was also a warning from Brazil’s elites. The unruly nature of the attack on Brasília resembles the Jan. 6, 2021, attack on the U.S. Capitol by supporters of former U.S. President Donald Trump. In both cases, far-right illusions, whether about the dangers of the “socialism” of U.S. President Joe Biden or the “communism” of Lula, symbolise the hostile opposition of the elites to even the mildest rollback of neoliberal austerity.
The attacks on government offices in the United States (2021) and Brazil (2023), as well as the recent coup in Peru (2022), are not random events; beneath them is a pattern that requires examination.
At Tricontinental: Institute for Social Research, we have been engaged in this study since our founding five years ago. In our first publication, “In the Ruins of the Present” (March 2018), we offered a preliminary analysis of this pattern, which I will develop further below.
After the Soviet Union collapsed in 1991 and the Third World Project withered as a result of the debt crisis, the U.S.-driven agenda of neoliberal globalisation prevailed.
This programme was characterised by the state’s withdrawal from the regulation of capital and by the erosion of social welfare policies. The neoliberal framework had two major consequences.
- First came a rapid increase in social inequality, with the growth of billionaires at one pole and the growth of poverty at the other, along with an exacerbation of inequality along North-South lines.
- Secondly, came the consolidation of a “centrist” political force that pretended that history, and therefore politics, had ended, leaving only administration (which in Brazil is well-named as centrão, or the “centre”) remaining.
Most countries around the world fell victim to both the neoliberal austerity agenda and this “end of politics” ideology, which became increasingly anti-democratic, making the case for technocrats to be in charge.
However, these austerity policies, cutting close to the bone of humanity, created their own new politics on the streets, a trend that was foreshadowed by the IMF riots and bread riots of the 1980s and later coalesced into the “anti-globalisation” protests.
The U.S.-driven globalisation agenda produced new contradictions that belied the argument that politics had ended.
The Great Recession that set in with the global financial crisis of 2007–08 increasingly invalidated the political credentials of the “centrists” who had managed the austerity regime.
The “World Inequality Report 2022” is an indictment of neoliberalism’s legacy. Today, wealth inequality is as bad as it was in the early years of the 20th century.
On average, the poorest half of the world’s population owns just $4,100 per adult (in purchasing power parity), while the richest 10 percent owns $771,300 — roughly 190 times as much wealth. Income inequality is equally harsh, with the richest 10 percent absorbing 52 percent of world income, leaving the poorest 50 percent with merely 8.5 percent of world income.
It gets worse if you look at the ultra-rich. Between 1995 and 2021, the wealth of the top 1 percent grew astronomically, capturing 38 percent of global wealth while the bottom 50 percent only “captured a frightening two percent,” the authors of the report find.
During the same period, the share of global wealth owned by the top 0.1 percent rose from 7 percent to 11 percent. This obscene wealth — largely untaxed — provides this tiny fraction of the world’s population with a disproportionate amount of power over political life and information and increasingly squeezes the ability of the poor to survive.
The World Bank’s “Global Economic Prospects” report (January 2023) forecasts that, at the end of 2024, gross domestic product (GDP) in 92 of the world’s poorer countries will be 6 percent below the level expected on the eve of the pandemic. Between 2020 and 2024, these countries are projected to suffer a cumulative loss in GDP equal to roughly 30 percent of their 2019 GDP.
As central banks in the richest countries tighten their monetary policies, capital for investment in the poorer nations is drying up and the cost of debts already held has increased. Total debt in these poorer countries, the World Bank notes, “is at a 50-year high.”
Roughly 1-in-5 of these countries are “effectively locked out of global debt markets,” up from 1-in-15 in 2019. All of these countries — excluding China — “suffered an especially sharp investment contraction of more than 8 percent” during the pandemic, “a deeper decline than in 2009,” in the throes of the Great Recession.
The report estimates that aggregate investment in these countries will be 8 percent lower in 2024 than had been expected in 2020. Faced with this reality, the World Bank offers the following prognosis: “Sluggish investment weakens the rate of growth of potential output, reducing the capacity of economies to increase median incomes, promote shared prosperity, and repay debts.”
In other words, the poorer nations will slide deeper into a debt crisis and into a permanent condition of social distress
The World Bank has sounded the alarm, but the forces of “centrism” — beholden to the billionaire class and the politics of austerity — simply refuse to pivot away from the neoliberal catastrophe.
If a leader of the centre-left or left tries to wrench their country out of persistent social inequality and polarised wealth distribution, they face the wrath of not merely the “centrists,” but the wealthy bondholders in the North, the International Monetary Fund and the Western states.
When Pedro Castillo won the presidency in Peru in July 2021, he was not permitted to pursue even a Scandinavian form of social democracy; the coup machinations against him began before he was inaugurated.
The civilised politics that would end hunger and illiteracy are simply not permitted by the billionaire class, who spend vast amounts of money on think tanks and media to undermine any project of decency and fund the dangerous forces of the far right, who shift the blame for social chaos away from the tax-free ultra-rich and the capitalist system and onto the poor and marginalised.
The hallucinatory insurrection in Brasília emerged from the same dynamic that produced the coup in Peru: a process in which “centrist” political forces are funded and brought to power in the Global South to ensure that their own citizens remain at the rear of the queue, while the wealthy tax-free bondholders of the Global North remain at the front.
On the barricades of Paris on Oct. 14, 1793, Pierre Gaspard Chaumette, the president of the Paris Commune who himself fell to the guillotine to which he sent many others, quoted these fine words from Jean-Jacques Rousseau:
“When the people shall have nothing more to eat, they will eat the rich.”
Vijay Prashad is an Indian historian, editor and journalist. He is a writing fellow and chief correspondent at Globetrotter. He is an editor of LeftWord Books and the director of Tricontinental: Institute for Social Research. He is a senior non-resident fellow at Chongyang Institute for Financial Studies, Renmin University of China. He has written more than 20 books, including The Darker Nations and The Poorer Nations. His latest books are Struggle Makes Us Human: Learning from Movements for Socialism and, with Noam Chomsky, The Withdrawal: Iraq, Libya, Afghanistan, and the Fragility of US Power.
This article is from Tricontinental: Institute for Social Research.
The views expressed are solely those of the author and may or may not reflect those of Consortium News.
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This is getting so infuriating, so inconceivably wrong, just so very f***ed up, I can’t understand for the life of me how any decent, working person can take it. We are being dragged into hell and for the most part people in the more privileged countries are shrugging it off, if it doesn’t affect them directly- even though it does, whether they realize it or not. It has to stop. Something has to be done. The rightwing and centrist establishment are no longer even trying to hide their pathological hatred of common-good policies. They are sick, fascist scum who would rather kill off billions of people rather than help to create a better world. How do we deal with this!?
Much respect to Vijay Prasahd as he tells the globalists are literally killing his people, his countrymen, his people of the South. And as a citizen of the North and the West, I am appalled, disgusted, extremely angry because they (our Northern bankers and oppressors) are doing this to the South to “keep them in their place in poverty and squalor” and simultaneously doing the same things to me, a citizen of Canada, the West, the North. Our bankers and their puppet G20 politicians are destroying life for first world citizens – stealing land, bankrupting businesses that are bought back by cronies at pennies on the dollar, driving down the standards of living of all of us by driving up the costs of energy, food, rents and education. The West has been unmasked as a group of hypocritical liars who want their rich children to proposer but no one else. They are becoming hated, deeply hated by average citizens. The citizens of the North and South have a common enemy – the obscenely rich and their puppets of the North. We will eat the rich someday after all their sons daughters and families have been ruined by the revolutions that are coming.
I live in Peru. Pedro Castillo tried to dissolve Congress, which would have sent the country into chaos. We are much better off without him.
Thank you, Vijay Prashad, for putting it all together so we can clearly understand.
Does this author understand WHO founded and institutionalized “The World Bank??” Of course, it was the US of A. To say, “the World Bank is sounding the alarm” suggests the author doesn’t know this. The US’s World Bank acts in tandem with the entire US Financial/Military Hegemon.
That institution was constructed, along with the US’s IMF after WWII. Between both behemoths they greatly helped in guaranteeing how the US Dollar System became the World’s Currency. Which has brought ruin upon multiple billions of world citizens.
That is a superb quote from Rousseau that, given the disgusting dispensation meted out by the classist to the weak, poor and the vulnerables the world over by the obscenely rich and brainlessly powerful, OUGHT to haunt ALL exploitative elites in the world. Prashad has in so doing shattered my stereotypical view of all Indian Brahmins as being castistically-condemned to be exploitative of and arrayed against the best interest of the bulk of humanity, poor or otherwise by boldly and so objectively standing up for humanity and its legitimate interests. My salute to Prashad, just hope Modi and company could learn a thing or two from him and profit India and bulk of Indians thereby if not himself too !
An extraordinary and moving article. Kudos.