COVID-19 Pandemic and the Global Socio-Economic Turmoil: Going Beyond Capitalism

By

Kola Ibrahim

kmarx4life@gmail.com

 

1.0 INTRODUCTION

There are so many lessons to learn from the deadly coronavirus pandemic that is ravaging the world now. One of this is the fact that the world is connected deeply more than ever. What is happening in one corner of the world has the tendency of affecting every other corner of the world. More than this, there is the need to have a global solutions to most of the problems facing humanity – social health, political and economic – which are themselves global in their full and proper estimation. One other lesson is the fact that humanity can live more peacefully with less stress and race to the abyss. People have been forced to work less and rest more with the coronavirus lockdowns. If society’s resources are properly planned, it can be possible to make people work less, provide jobs for all and reduce pressure on nature’s resources.

However, the biggest and most important lesson, that underlines all other lessons, to be learnt from the raging Coronavirus pandemic that has infected over 11.6 million and killed more than 539, 079 people globally as at the last count¹, it is that the current socio-economic system, represented by global capitalism cannot take humanity forward to the next stage of civilization. More than ever before, the need to replace the capitalist system with a genuinely democratic socialist system is more urgent now than ever. Aside the human deaths recorded through the pandemic, the economic maelstrom – not to mention social chaos – that has accompanied it, further underscores the chaotic and anarchical nature of capitalist system.

1.1 Capitalism and Capitalist Governments Cultivated Coronavirus

No doubt, this is not the first time that human race will witness a pandemic or a health crisis of international proportion, that has claimed hundreds of thousands of lives. While it may also be true that the Covid-19 pandemic came as a natural event, evidences suggest that human activities contributed to its rise. Moreover, given the current level of scientific and economic advancements, it is clear that the disease could have been better managed and contained, to reduce fatalities and victims to the barest minimum. While the Covid-19 disease might have developed as a natural disease, the fact that major capitalist and global powers failed to utilize the experience of the past to plan for future reflect the chaotic nature of capitalist system. It is a known fact that the current Coronavirus is a strain of a generic flu-related corona viruses, which have been witnessed in the last 15 to 20 years, especially in the outbreak of such diseases as MERS and SARS.

In fact, according to WHO earlier reports, it was noted that the SARS strain of 2003, which is linked with coronavirus and also originated in China, was transferred to human through wild animals. It is also reported by WHO that more than 70 percent of global disease pathogens since the last 50 years were transferred from animal to man. Yet, wild animal business is a big business in China worth over $74 billionⁱ, with Wuhan in the Hubei province being one of the popular markets for the wild animal. The same Chinese government that allowed this business that employed 14 million to go onⁱⁱ, was compelled close down the business by fiat, without adequate provision for millions of jobs to be lost.

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Indeed, a report by Global Preparedness Monitoring Board (GPMB), convened and sponsored by the WHO, World Bank and Gates Foundation, had issued a warning in September 2019 about the weakness of global health system to respond to a pandemic, with the warning that as much as 50 to 80 million people could die from a new pandemic.ⁱⁱⁱ Having studied the rise of various global diseases including SARS, MERS, Ebola, Zika, etc., and taking into cognisance the increasing industrial, economic and transport activities globally, the board expected the world to be close to a new pandemic. The board called for investment in global public health system to prepare for this pandemic. But this did not yield expected response. Attack on public health systems continued in several countries, including the advanced capitalist countries that have the resources to not only build a strong public health system, but also help the third world countries in improving and strengthening their public health systems. Worse still, the cynical attitude of most western political leaders added to inability to curtail the pandemic, as most of them just wished the disease will go away soon, or were more focused on protecting the capitalist economic growth as much as possible.

Rather than undertake extensive research and develop adequate medical, pharmaceutical and social response systems for the viruses, the various capitalist governments across the world simply carried on as though nothing happened. Various independent and official research works carried out in relation to these diseases, which pointed to the high possibility of greater health dangers, were simply ignored. This is not strange in the capitalist world, since every research is usually commercialized and privatized for private businesses in the health and pharmaceutical industries to make big bucks. And since there is no immediate money to make from the scientific research works on the disease, even when they signaled health danger, they are simply abandoned or not taken seriously.

2.0 CLIMATE CATASTROPHE

2.1 Climate Change, Environmental destruction and Coronavirus

More than this, the Covid-19 pandemic also paints a gloomy future for mankind especially as relating to climatic catastrophe. While the impacts of climate change and unbridled industrial activities on the rise of strange and new disease strains globally, especially this Covid-19 disease, have not been fully explored, there are clear evidence that human activities, and possibly climatic factors might have played role in the rise of the coronavirus disease. According to IPCC report^iv, a rise in heat level from 1.5 degree to 2.0 degree Celsius higher than pre-industrial level will lead to the risk of invasive species, attacking human communities. As noted earlier, WHO had reported that more than 70 percent of disease-causing pathogens came from animal to human, in the last 50 years.

Moreover, it has been reported that through research that human activities, especially industrial activities and urbanization, have changed global ecosystem, exposing many microorganisms, hitherto cohabiting with wild life in the jungles, to human society. Many active organisms and microorganisms that used to ensure a balance in the eco-system may have been affected by climate change. The coronavirus was reported to have entered human from wild animals in the wild animal food market in Wuhan. If at less than 1.5 degree Celsius rise in temperature (above pre-industrial level), we have started witnessing a pandemic, we can only second guess what the impact will be should the temperature rise to 2.0 degree Celsius or more.

Given the unhindered rise in destructive human activities, and the deeper integration of humanity through economic activities, the break out of Covid-19 disease and its rapid spread and impact (health, economic and social) point to a scary future for mankind, should the climate crisis reach a tipping point. Indeed, the Covid-19 pandemic will be a child’s play or a subset of series of calamitous outcomes of a climate catastrophe^v. Yet, global capitalist classes and governments care no hoot. They, at best, undertake a tokenistic policies such as carbon tax just to show that they care, without looking at how to fundamentally change processes of production, distribution and consumption on long term basis in order to save the planet. Whereas there was supposed to be a move towards cleaner energy system, the fact that this is left to the whims of big businesses and capitalist free market operation, means that this will take several years to achieve on a systemic and fundamental basis. While there is marginal increase in investment in cleaner energy system such as solar, wind and electric power systems, the reality is that fossil fuel is still very much a big and increasing business globally, with new oil fields being opened up, while US oil and gas production is expected to be higher than that of Russia by 2030. Even beyond the fuel being used for production and distribution is the unbridled industrial processes where dangerous and harmful chemicals are released to the environment.

2.2 Capitalism has to solution to Climate Crisis

Now, we are moving faster to an irreversible period in climate change, with underdeveloped countries at greatest risk. Just a few centimeter rise in ocean level or marginal increase in temperature is enough to offset not just the economies of most third world countries, especially in Africa, but also upturn the global capitalist system, which sit like a heavy load on a knife edge^vi. But it would be wishful thinking to expect capitalist classes and the ruling classes that defend them across the world to take a more holistic stand on climate issue. Halting climate change will require a planned means of production and distribution across the world towards environmentally sustainable and clean energy and production systems, a process that is alien to the anarchical and chaotic nature of capitalism. Under capitalism, capital move to where the profits can best be made, with little or no consideration to the impact on environment, humanity and the future. With socialist planned production and distribution, the immediate aim is to provide for the needs of the majority and sustain the environment and the future, in order to stop chaotic human activities that destroy the environment. Therefore, capitalism and a sustainable future cannot cohabit on a long term basis.

Human race seems to be in for an era of continuous epidemics and pandemic. No doubt, capitalism, especially in its current uncontrolled form, portends major disaster for humanity, given the unprecedented quest for profits at the expense of future survival of humanity. All the so-called solutions offered by capitalist strategists for climate crisis will not safe humanity unless the principle of individualism and profit-maximization that drive capitalism is put to an end. Until humanity, rather than profit, becomes the centerpiece of production, distribution, policy formulation and exchange, all solutions to climate crisis will end in fiasco. This is not a doomsday prophesy, but a reality from the anarchical production and distribution systems of the capitalist system, the principle of the so-called invisible hand, or the false idea of trickle-down economy.

3.0 GLOBAL CAPITALISM IN DEADLY DISTRESS

Furthermore, the rise of Coronavirus has put a big question mark on the fundamental principle of capitalism, which is individualism. Today, virtually everything, including healthcare and pharmaceutical industry, has been turned into commodity for profit making. And we are told that is how the system can work. Healthcare across the world is being underfunded, commercialized and privatized. Yet, when pandemic struck, individualism has to collapse into a coordinated national and international responses. Now, many national economies are on the verge of total collapse, while global economy itself is at the edge of another historic economic recession. Economies of many working class families are being ruined with capitalist system having no strategy of rescuing them from penury imposed by the attempt to curtail the pandemic. This is because it will require the state directly intervening in the economy and redirecting social and public resources towards rescuing the majority that will be affected; an action that will impinge on and undermine the profit interests of big businesses and capitalist system.

3.1 Coronavirus met a Distressed Health System

The various responses of the capitalist governments across the world to the spread of the Coronavirus disease have again exposed the bankruptcy of the neo-liberal capitalist policies being implemented in most parts of the world. In spite of the huge scientific, medical, technological and financial resources unleashed by capitalism, the disease met a world that cannot provide for the healthy living of majority of the population. In the United States – the epicenter of global capitalism and currently the epicenter of the Covid-19 pandemic – the government was compelled to release over $2.6 trillion within first 4 months of 2020, to mitigate the economic effects of the disease. But just a fraction of this amount is needed to provide universal health coverage for all Americans. Yet, healthcare in the most developed capitalist country is one of the costliest in the world, with millions of Americans lacking access to functional health care. In the same America, the pharmaceutical industry and insurance companies sit on hundreds of billions of dollars in profits. In Europe, the story is not different. Prior to the outbreak of the coronavirus disease, the National Health Service (NHS) that was fought and won by the working class in the United Kingdom, which provide universal healthcare for citizens, was under attacks through privatization of it services and underfunding by government.

While major advanced capitalist countries spend trillions of dollars on defence and military budgets, which only provide huge profit for the arms industry, associated industries and military contractors but wreak havoc to the world, health sector that is meant to safe lives is poorly funded. This is coupled with huge wealth accumulation by the rich few. According to a 2019 Oxfam report on world wealth accumulation, just 2, 153 billionaires has more wealth than 4.6 billion people in the world, while the richest 1 percent of world population (about 7 million) has wealth more than 6.9 billion people^vii. In the first three months of 2020 alone, five of the world richest billionaires (Jeff Bezos, Bill gates, Mark Zuckerberg, Warren Buffett and Larry Ellison) saw an average of 23.1 percent ($90.6 billion) in their wealth, even in the face of growing health and economic challenges.

3.2 Coronavirus Exposes Fragility of Global Capitalism

The economic impacts of this Covid-19 pandemic is just unraveling, and the capitalist classes are already unleashing their arsenal on the working people. From increasing mass sack of workers across the world to forcing workers to work under unhealthy and unsafe conditions, to attack on social services, obviously, the capitalist system is in for a great crisis. All of these attacks have been on before the coronavirus pandemic, but are now being accentuated with the new economic recession. Even, multilateral organizations like the Bretton Woods institutions that pretend to be caring for the interests of the downtrodden, have been advocating austerity measures such as increased tax, deregulation of certain sector, involvement of private sector in the social service sectors and the economy, especially in the third world countries.

These policies are similar to the shock therapy advocated for global economy, especially the third world, during various economic crises. These are the same policies that put the global economy in the present fragile and unstable state. Indeed, before the Covid-19 crisis, global capitalism was already showing signs of distress as witnessed in the US-China trade war, and just before the Covid-19 pandemic, the oil price war between Saudi Arabia and Russia. The IMF was already warning of another economic crisis. Global GDP growth fell in 2019 to 2.3 percent from 3 percent in 2018, while growth in global trade fell to 0.3 percent from 3.9 percent in 2018^viii.

Now, with Covid-19 pandemic, which has led to sharp slowdown of world economy, the crisis of capitalism can only get deeper. Most economies are already in recession. Also, China, the second largest economy in the world, and a key link in the economy of many countries, has seen its GDP shrinking by 6.8 percent in the first quarter of 2020. In fact, the World Bank estimates that global GDP will shrink by 4.9 percent, “the deepest global recession in decades”. This, according to the Bank is even optimistic, as the worst case could be a contraction of 8 percent, accompanied by default on loan repayment and bankruptcies^ix. The number of countries to be affected by fall in per capita income will be the highest since 1870.

The implication of this unprecedented economic downturn on unemployment is better imagined. Even before the pandemic and lockdown, around 67.6 million young people are unemployed while 267 million, constituting one-fifth of youth population are NEET (not in employment, education or training). The pandemic, lockdown and other measures to curtail the disease will worsen these already bad situations, not to mention the effect of the economic downturn. According to ILO^x, an estimated 4.8 percent of working hours, equivalent to 135 million full-time jobs, were lost during the first quarter of 2020, while it is estimated that 10.7 percent of working hours, equivalent to 305 million full-time jobs, will be lost during the second quarter of 2020.

3.3 Capitalist Bailout Offers No Way Out

While the US and other western capitalist and emerging economies have been propping the economy with huge bailout funds worth over $10 trillion with central banks having to spend over $6 trillion according to International Monetary Fund (IMF)^xi, this cannot on the long run safe the manufacturing and other sectors, without government’s direct control of the economy. While some of these bailouts, were used for small businesses and as immediate palliatives for low income citizens during lockdowns, a greater percentage of these bailouts were committed to big businesses and corporate financial sharks, especially in the advanced economies^xii. These are companies that have amassed trillions of dollars in profits over years. In the US alone, corporate profits as at fourth quarter 2019 was over $1.9 trillion^xiii, an amount that is multiple of what is needed for universal health coverage for most third world countries.

In spite of these governments’ spending, there is no silver lining for the global economy. This is because the race to stay afloat and make profits will becloud any commitment to long term planning by many companies. The capitalist class, rather than make efforts to reduce unemployment – by focusing more on raising purchasing power of the majority, and less on immediate profit maximization – will only exploit the huge unemployment situation to drive down wages, and force workers to work the more. This can only spell doom for the economy, as effective demand will continue to dampen, which will ultimately hurt the economy. Yes, stimulus packages, credit economy and financial gambling can serve as smokescreen for a while, but these, in the absence of real improvement in effective demand and production, will only make the bubble bigger and the burst more pronounced and fatal. For instance, the palliatives given to the citizens are not sustainable on the long run on the basis of capitalist market system², while continuous government’s subsidies and bailout to businesses will lead to deeper debt and deficit problems, which can only be resolved by governments taking over total control of the economy through large scale nationalizations, and planning the economy. This is of course an anathema under capitalism.

One of the signs of the gloomier future is the growth in the debt economy. The degree of indebtedness has been historical prior to the Covid-19 era, and this is expected to worsen in this period. Currently, more than 80 percent of emerging and developing economies (excluding China) have their debts to GDP risen by 20 percent to 108 percent between 2010 and 2019. This, according to IMF staff, represents “the largest, fastest, and most broad-based increase in debt in these economies in the past 50 years”. Indeed, while GDP growth has fallen from around 7.6 percent in 2010 to about 3.8 percent in 2019 in emerging and developing economies (China inclusive), debt has increased to about 180 percent of the GDP^xiv. This means that debts have actually been used to finance falling output.² The UK exchequer is already raising the unsustainability of the bailout to furlough workers, while the republicans in the US Senate seems to be opposed to a new bailout for the working families. In third world countries, inability to give palliatives and bailouts during the lockdown, is one of the major reason for the reopening of the economic activities, as governments are fearful of pent up anger over shortages leading to mass revolt of the working and poor masses against them.

 

Clearly, the world economy has not recovered from the last world financial crisis with the dampened output. Yet, the Covid-19 crisis will worsen the situation. The implication of this is that there will be debt repayment and servicing defaults both by sovereign and private debtors, while at the same time, there will be growing appetite for more debts as governments and businesses struggle to survive the period. This will further dampen any prospect of improvement in global output, and further worsen recession. Any attempt at using conventional and worn-out capitalist policies to get out of this situation can only worsen the situation either in the immediate or long run.

3.4 Heightened Onslaught against Workers, Youth and Poor

Even if the global economy picks up again, it will be at a very anemic level that can only ensure gloomy future for the working people. Obviously, the working people and the poor would be made the sacrificial lamb in many folds. There will be mass retrenchment and attacks on jobs through salary cut, non-payment of salaries, and attack on working conditions. Aside this is the fact that the working people will be made to work in more precarious conditions that exposes them to Covid-19 infections, as capitalists try to recoup their profits by all means. Even before the pandemic, tens of millions of workers work in precarious conditions, even in the health sector, without adequate protection and safety provisions by employers. Given the scale and rate of the infection which has overwhelmed many capitalist governments, coupled with the expected rabid drive for profits by capitalist businesses, there will be less provision for health safety of workers.

This reality is already staring workers in the face as the capitalist classes are putting pressures on governments to open up the economy and end lockdowns meant to curtail the disease spread and safeguard lives, without proper provisions for safety and protection. Also, the rises in the cases of workers being forced to work in precarious conditions, and growing number of workers being infected at work are ominous signs for workers and unions. Furthermore, the informal sector will be serious affected as many small businesses are already closing down while working people’s purchasing power dwindles. All of these will worsen already bad cases of unemployment, poverty, disease and social tension.

4.0 MISERY, POVERTY, UNDERDEVELOPMENT DEFINE AFRICA’S FUTURE

In the third world, especially Africa, health sector is one of the – if not the most – neglected social sectors. It is a fact that the continent, in spite of its huge mineral, natural and human resources, has become the backwoods of civilization. The continent is home to several preventable diseases that could have been avoided through simple sanitation, water supply, good nutrition and education. Yet, with its huge resources, the social service sectors like education, healthcare, water supply and sanitation, are in terrible state. The continent, with over 1.3 billion people – 16 percent of global population – has 26 percent of global disease burden, yet the continent contribute less than 2 percentage of the $9.8 trillion global health funding^xv. Health funding in the continent is less than 5 percent of the GDP, just as government expenditure only average less than 10 percent, even when African governments in 2015 Abuja declaration, agreed to a minimal expenditure of 15 percent on health.

4.1 Africa’s Health Crisis

The reality of these unsettling facts are glaring, and will have serious adverse impacts on the people of the continent as the Coronavirus ravages Africa. At least 3 to 8 persons out of 1000 dying of infectious and respiratory diseases annually. Chronic shortage of medical and health personnel, poor facilities and funding, low level of research, etc. still dog health sector in Africa. There are 2 doctors to 10,000 people, while there are only 1.8 hospital beds to 1000 people, the lowest in the world. In fact, less than 35 percent of the continent's population has access to hand washing facility, while 56 percent of African urban dwellers live in slums - about 43 percent (600 million) of African population live in urban centres.^xvi

It is important to note that the continent is a sources of cheap resources and labour for many multinational corporations across the world, yet, the effects of the huge resources, wealth and profits extracted and exploited from the continent are only felt through death, strife, diseases, poverty, ignorance and environmental destruction. While the continent is home to a quarter of world's gold reserve, Africa contribute just 1 percent of global wealth. The huge resources have had little impact on the Africa's population. As much as the kleptomaniac ruling classes in the continent are part of the problem, so also is the global capitalist system that ensure the regeneration of a degenerate political class and parasitic business/capitalist classes that only eat from the carcass of the dysfunctional economies and social service sectors. Between 1970 and 2010 over $1.3 trillion was illegally taken away from the continent, with over $70 billion stashed away yearly from Africa in illicit fund to the West.^xvii

The capitalist economic policies promoted by Western capitalist states and their multilateral organizations such as privatization, commercialization, trade liberalization, currency devaluation and heavy dole out to big businesses and multinationals have meant huge wealth disparity and inequality in the region. According to Oxfam 2019 report, at least a whopping sum of $9.6 billion is lost to corporate tax incentives annually in West Africa^xviii. The major beneficiaries are the rich few in the region and multinational corporations. In Nigeria for instance, Dangote Company belonging to the richest African, Aliko Dangote, had a profit of over N360 billion in 2018, which was boosted by N89 billion in tax break from Nigerian government. “Africa’s three richest billionaire men have more wealth than the bottom 50% of the population of Africa, approximately 650 million people”, yet the continent is home to half of the world’s poor people, with over 430 million Africans living in extreme poverty (less than $1.9/day).^xix

No doubt, the African continent is in for a serious social and economic crises. While the rate of Covid-19 infections in Africa at around 400, 000 with more than 10, 000 deaths, is still low compared to other continents, this should not distract from the fact that the continent is in real imminent danger should the rate increase, especially given the attempt of the governments across the region to open up the economy, in a copycatting of western economies, which still have some buffers in terms of health infrastructures to still absorb the shock of a new break out. Given the low capacity of health facilities in the continent, the responses of African governments might have had another set of repercussions.

Firstly, the health resources and facilities of various African governments have been overwhelmed and overstretched as governments focused on addressing Covid-19. As a result of this, what is being prevented in Covid-19 may be gotten through other diseases. This means that many people, including children, will be denied vital treatments as resources are diverted to Covid-19 responses. In Nigeria and of course, many African countries, many public hospitals were closed down or only allowed to operate partially during lockdown period, with many of them still offering skeletal services, after the lockdown has been eased. This can only increase mortality for many other diseases, some of which are of emergency status in the continent. Therefore, while focus has been on mortality rate of Covid-19, the continent may be silently losing more thousands lives too to diversion of health resources to fighting Covid-19. And of course, the possibility of another wave of localized infectious disease rising from this.

Secondly is the impact of the lockdown on livelihoods and the possibility of this increasing mortality rate in Africa. Currently, a third of African children are malnourished. With poor handling of the lockdown in Africa, the health repercussion can better be imagined. The lockdown in many African countries came with little or no support to citizens, over 85.8 percent of whom are in the informal sector^xx. This will worsen the rate of hunger, diseases and deaths in the region.

4.2 Capitalism Wrecks Africa

While various multilateral agencies and western capitalist pundits are raising the red flag on the calamitous effects the Covid-19 pandemic will have on Africa, the fact that the capitalist system which they defend and superintend over is a major cause of this cannot be ignored. Through socialist democratic planning, the resources and wealth of the continent can be mobilized and utilized to ensure better and improved lives for the majority of Africans without undermining the environment and future generations. But this presupposes that the huge wealth and resources of the continent are taken away from the ruinous global capitalist forces and their parasitic local business and political classes, and such resources and wealth are put under the democratic ownership, control and management of the working people, relevant professionals, youth and the poor.

In economic terms, the pictures are gloomy for the region. According to the IMF, the Africa economy is predicted to shrink by 3.2 percent. This may actually hide the reality, as oil and tourism dependent countries are expected to have their economies contract by 4.9 percent and 9.7 percent respectively. This will have far reaching impact on the social, economic and political situation in the continent. According to UNECA, in its April 2020 briefing, it is estimated that at least 19 million jobs may be lost in Africa. But this is premised on GDP contraction of 2.6 percent. With IMF projecting a regional contraction of 3.2 percent in its revised June report, the job losses will be much more. The ILO in its ILO Monitor, May 2020 edition, estimated that 1.7 percent and 9.5 percent of working hours will be lost in Africa in the first and second quarters of 2020 respectively (January to June). This was estimated to lead to about 41 million full-time job losses within the first half of this year (based on 48 hour working week). Given the poor and very slow – and non-existing in many countries – social safety and cushioning palliatives by African governments in the last six months, unemployment reports in the region will possibly confirm this projection. Of course, the various easing of lockdown in Africa and elsewhere, might slow down economic contraction, but the ripple effects of the lockdown and business closures in the first half of the year may be felt more in the second half of the year. Already, according to employers’ association in Nigeria, as much as 74 percent of big businesses have closed shop in the last six months.

4.3 Imminent Debt Crisis

Added to all this is the fiscal and debt problems in the region. Already, more than half of African countries have budgets deficit of more than 3 percent of GDP^xxi, partly a product of falling revenues and higher outlay on infrastructure. Interestingly, a growing percentage of infrastructure votes, mostly funded by loans, are looted by local politicians and their big business collaborators. The fall in the prices of these products, coupled with low revenue from tourism is expected to worsen Africa’s fiscal and monetary standing. While revenue shortage leads to budget deficits and consequent increase in borrowing, debt servicing and/or cut in social spending – Nigeria’s health, education and social safety net budgets are less collectively less than cost of debt servicing (N2.64 trillion) in 2020 federal budgetxxii – and currency devaluation (given that most of African states subscribe to neoliberal free market ideology)³. Currency devaluation^xxiii is also going to lead to hike in cost of external debt servicing. This will again require government borrowing to balance the budgets. This will further increase cost of borrowing, which is already high in many African countries (more than 10 percent), and has increased in the first 4 months of 2020 (Bond yields January to April: Nigeria; 11.23 to 12.31, South Africa; 8.24 to 11.03, Kenya; 12.58 to 12.61, Egypt; 14.14 to 14.85)^xxiv.

The summary of this is that Africa will soon go through the previous but infamous debt/fiscal vicious cycle, leading to debt unsustainability and further deepening of neo-liberal policies (another Structural³ Aside Egypt, most of the biggest sub-regional economies in Africa had their currencies devalued between 3.9 percent and 25.5 percent.

Adjustment programme). Given that it is less than two decades that many Africa received debt relief from multilateral lenders, and the same vicious cycle that necessitated the debt relief, reenacting itself, it is clear that Africa’s development cannot be achieved under capitalism. This reality was staring the continent in the face before, but has now been make starker now with the current Covid-19 era. With the continent being home to half of the world’s poor, while as much as 40 percent of the population living in extreme poverty of less than $1.9/day, the situation can only get worse. The current per capital income of $2100 – which actually mask wealth inequality where just 26 billionaires are worth more than half of Africans – is the lowest in the world.

4.4 Failure of Capitalist Multilateralism in Africa

Despite the obviously bleak future for Africa, given the current Covid-19 crisis, the response of global policy makers and multilateral organizations have been ridiculous to say the least. While African governments have requested for $100 billion support, in addition to $44 billion in debt forgiveness, United Nations has called for $200 billion in support for Africa. There has also been call on IMF to issue $1 trillion Special Drawing Rights (SDR) that can help Africa countries receive some needed fund. However, all these proposals, aside being inadequate, has also been ignored or poorly agreed to. At best, what Africa has gotten so far in relation to its growingly unsustainable debt is debt standstill, which only means suspension of interest payment for a while. Instead of direct financial aid to Africa, the two leading Bretton Wood institutions, IMF and World Banks, have only given the continent $36 billion ($18 billion each), as part of $56 billion mobilized by creditors across the world^xxv. IMF only gave 15 poor countries in the continent minimal debt relief. The 36 billion Euro promised by European nations is limited by the fact that many of these pledges will only be taken from existing pledges to the continent, which have not been redeemed.

Moreover, many European countries are limited by how much they can give in aid, as their overseas aids are tied as percentages to their budgets. The Trump administration and others have refused to support IMF’s proposal to issue $1 trillion SDR. According to IMF Managing Director, the fund has not been able to get 85 percent support needed to provide the SDR. However, even if the SDR is issued, Africa will only get a tiny proportion as countries’ drawing right is limited to amount they contribute to the fund, which itself is tied to their standing in the global economy. There have been some suggestion that Africa should be made to access outstanding of Europe’s SDR of $24 billion. But African can only access less than 3 percent of this.

All of this reflect the skewedness of global capitalism, and the failure of capitalist multilateralism and globalization to help Africa, especially in this trying period. If the continent receives this poor support from global capitalist master in this very difficult time, it will be wishful thinking to expect Africa to receive serious attention at any other time. While the continent has been exploited for decades, if not centuries, by western capitalism, while it is still supplying the world with huge raw materials, the continent has remained largely backwoods of development and civilization. The continent on the basis of global capitalist division of labour, and as a latecomer to the orbit of global capitalism, cannot achieve its full potential under capitalism, albeit its neo-liberal form.

As at 2 July, 2020, over 405, 000 cases have been recorded with over 10, 000 death in Africa. The rate of infection has also increased drastically with nearly 200,000 infections recorded within the month of June, as against 200, 000 infections recorded in the previous 4 months. According to estimate by UN ECA, the continent will need more than 74 million test kits, while over $44 billion will be needed in the best case scenario to procure needed materials to fight the disease^xxvi. Currently, 94 percent of drugs used in Africa is from outside the continent. Yet, the best the western rich nations can give is token. This shows the bankruptcy of global capitalism.

4.5 Socialism is the future for Africa

This again underscores the need for a socialist alternative in Africa. With the huge resources and wealth of the region, it can be possible to mobilise the needed wealth, resources and manpower to defeat not only Covid-19 but also fundamentally improve the continent’s social infrastructures, and begin the process of industrial development of the continent. By putting the continent’s huge resources under democratic public control and management of the working people, communities and relevant professionals, it can be possible to plan on a long term basis the development of the continent.

By increasing by 50 percent, tax on the richest 0.0001 percent of African population, who owns more than 40 percent of the continent’s total wealth, coupled with ending fraudulent trade policies, such as ineffective tax incentives – that denied West Africa over $9.6 billion in lost funding each year – and illicit financial activities, it can be possible to mobilise resources to begin to address Africa’s social service and physical infrastructure shortfall. But, the capitalist classes, continentally and internationally, will wage a huge war (economic, political and military) against such move, which will necessitate the need to mobilise the mass of working people, youth and poor to the political arena. None of the capitalist political class in the continent can do this. Only a revolutionary mass movement of the working people, youth and the poor led by the most organized class, the working class can implement these kind of programmes.

5.0 NIGERIA’S CAPITALISM IN DISTRESS

In Nigeria, Africa’s largest economy, which government’s revenues (around 60 percent) rely majorly on receipt from crude oil sale, the chicken is already coming home to roost. Price of oil has fallen significantly, which has raised question about budget financing. This means that government’s revenue will shrink, which will impact directly on the economy, as government’s spending plays key role in the economy. Already, naira value has fallen against major currencies, with about N385 now officially trading for a dollar. The various lockdowns have impacted negatively on many businesses. Given Nigeria’s poor statistical record keeping, the real impact of the Covid-19 lockdown can only be imagined. Meanwhile, given the sharp fall in government’s revenue, there is very little the government was ready to do to lift millions of poor people and small businesses out of economic crisis.

According to the Finance Minister, Zainab Ahmed, government’s first quarter revenue fell by N125 billion (31 percent). This has been worsened by a looming debt crisis, as the cost of debt servicing in the first quarter, 2020, at N943.12 billion is 99.2 percent of the total revenue (N950.56 billion) received in the quarter^xxvii. This means government will only be servicing loan in the first quarter or government will have to borrow to service (pay interest on) debt. In the last five years, the government has spent nothing less than 60 percent of its revenue on debt servicing, leaving very little for social sector and infrastructure^xxviii.

While the IMF forecast a GDP contraction of -4.6 percent in 2020, the government is expecting the economy to contract by -8.94 percent at worst case, or -4.4 percent at best case. This is bound to have a huge impact on the lives of majority of Nigerians, many of whom are currently finding it to survive the current time. Even when the economy was buoyant, there was very little coming the way of the common people. Within 5 years, the government employed over 500,000 graduates on casual employment of N30, 000 ($78); meanwhile every 3 months about 600, 000 young people are thrown to the job market. It is therefore expected that there will be worse attacks on the working people and the poor now. Already, the government is throwing the 500, 000 graduate casuals out to the job market, at a period of serious economic downturn with huge unemployment outlay already staring us in the face.

In fact, governments at various levels are already using the fall in revenue to launch attacks on working people. Some state governments are already defaulting in salary payment while some others have started cutting workers’ salaries. At the federal level, many workers are being owed salaries while there is growing cases of retrenchment in government agencies and establishments such as NNPC Kaduna Refinery. In fact, the federal government has reactivated the previously abandoned plan to reduce number of government agencies and establishments, which will lead to mass sack of workers. Government, using the excuse of deregulation, has increased the pump price of petrol from N125 to N140; while the plan to increase electricity tariffs have only been resisted by mass opposition. Interestingly, the same federal government, through the CBN, ‘directed’ banks not to sack workers in this period. Of course, the banks took this directive with a pinch of salt, as there are several unreported cases of forced resignation, sack and retirement. Aside the threat to jobs and pay, governments will also use this period to renege on existing agreements on working conditions for instance, minimum wage and payment of various arrears of salaries and pensions.

Worse still, there will be further attacks on social service funding. Even before economic crisis, governments at all levels pay lip service to education, health, sanitation and water supply. The Covid-19-inspired economic crisis will only give ample excuse to further attack these sectors. Not minding the purported commitment of governments to fighting Covid-19, health sector will receive poor attention. Despite the grandstanding on Covid-19 spread, some state governments, and even federal government, owe health workers, including doctors, salaries and allowances with cases of doctors’ and health workers’ strikes growing weekly. It took a strike action by resident doctors across the country before the federal government could agree to pay arrears of allowances of these doctors.

This is not new. The poor treatment of medical and health workers have led to acute shortage of health workers, with more than half of the over 70, 000 registered doctors working outside the country, while the country could only boost of 1 doctor to over 6,400 citizens. Indeed, given the crookedness of Nigeria’s political class, Covid-19 pandemic will not just become a conduit pipe for siphoning public fund, especially given the fact that there will be less revenue now to loot through construction projects; but also become a ready excuse to abandon governments’ responsibility towards the health sector as a whole. For instance, many state governments are now focusing on building isolation centres for Covid-19 patients, but no attention is paid to other aspect of the health sector, that even kill more people than Coronavirus.

In the private sector, there are increasing cases of retrenchment and cut in workers’ pay. The Access Bank case highlight the reality that will face private sector workers in the coming period. Worth mentioning also is the hypocrisy and shortsightedness of capitalist class in Nigeria, and indeed globally. Despite amassing tens of billions of naira in profits⁴, the capitalists are not prepared for any short term reduction in their profits, if only to keep jobs and sustain purchasing power and effective demands.

 

The Covid-19-instigated economic crisis will also serve as excuse by private businesses, especially in the essential and existential sectors to hike prices of goods and services. Showing the hypocrisy of private businesses, Dangote Industries, which owner donated a billion naira to the federal government for Covid­19 fight, has increased prices of its products, and has reportedly sacked over 3, 000 workers. It should be noted that the Dangote Company earned N360 billion in profit in 2018, which was boosted by N89 billion tax credit from government.^xxix Of course, as a result of naira devaluation and other economic variable, inflation, which has reached a two year high of 12.34 percent in April from 12.26 percent (food inflation from 14.98 in March to 15.03 percent in April), may not be unexpected. However, many of the capitalists will rather use the opportunity to recover expected loss in revenues and profits through depressed demands, by hiking the prices of their goods and services, especially in the essential sectors, where people have little or no choice.⁴ World’s richest 25 billionaires gained almost $255 billion in just two months of March and April, 2020, the hottest period of Coronavirus pandemic (Forbes, www.forbesafrica.com

 

Given these scenarios and analyses, it will be retrogressive in thinking to expect the same capitalist class to safe humanity from the current morass, which they put us all into in the first place. Indeed, capitalism will only worsen these if not challenged. As noted earlier, the debacle of climate calamity hanging over us all is a pointer to the fact that capitalism, as a political economic system, has now become a fetter for further development of human race and civilization. In Nigeria, it will be like turning logic on its head, to expect that more neoliberal capitalist policies of more privatization and commercialization of public enterprises, utilities and social services – which will follow various interventions being offered by multilateral capitalist organizations to Nigeria and other African countries – can resolve the economic quagmire the country is in to. It is like asking that a frightened deer be handed over to a lion. But this is what the capitalist pundits and analysts, including newspapers, are proposing for the government.

6.0 RIGHTWING NATIONALISM, WORSENING CONFLICTS

Growing out of the Covid-19 health and economic crises is the growth in rightwing nationalism and defeat of minimal multilateralism of the past. The last great economic recession of the 2007-2010 brought forth the radicalization of vast layer of working class people and youth to the arena of struggle and politics, across the globe. It was an era of mass revolts and uprisings both in the advanced capitalist countries and third world countries. Some of these revolts and mass uprisings actually led to political changes in many countries. In many advanced western democracies, it led to radicalization of political process leading to the emergence of leftwing candidates, while in the other countries, especially in the third world countries of Africa, Asia and Latin America, there developed mass revolts and political revolutions that ousted many sitting regimes, or almost led to their ouster.

However, along with this revolutionary radicalization, was also the counter-revolutionary forces of far-right and rightwing nationalism. The subsequent failure of these revolts and uprisings to engender a new social-economic order different from capitalism, led to mass delusion, and subsequent rise of right-wing nationalism or in some cases, far right ideology. The result has been the Donald Trump, Bolsonaro and Duterte (US, Brazil and Philippines respectively) of this world. These rightwing nationalist tendencies have tried to mobilise the widespread anger of the population against the capitalist system towards a revival of capitalism albeit using nationalist sentiment. It is a policy of ‘if we go alone, we can get it right’. Along with this tendency is the growth in racism and racial discriminations; attacks on working class and democratic rights, among other. It also means disrupting capitalist globalism, which have been seen in the Trump administration’s relationship with other western nations.

Of course, the capitalist class, while they may pretend to be averse to the rotten politics of rightwing nationalism, exemplified by the likes of Trump, they will be secretly cheering it up, as it helps them get their work done faster: breaking union strength, implementing pro-corporate class policies, etc. However, in the long run, global capitalism will suffer from this drift towards rightwing nationalism and unilateralism. This was reflected in the impact of the US-China trade war on global output and trade in 2019.

The Covid-19 crisis will definitely exacerbate this tendency, unless radical mass movements develop to undercut the base of rightwing nationalism and far right tendency. However, such radical leftwing mass movements of working people, youth and the poor, must be built on the need to supplant the capitalist system and address the needs of the people. Without this, the society will go another cycle of ebb in radical mood, replaced by rightwing nationalism or far right movements. The reality of this is already staring us in the face. The Coronavirus has led to many countries going it all alone to fight the pandemic. This is clearly an inverted logic for global capitalism: a situation where a pandemic (a worldwide disease) is fought on national basis. The first few months of the pandemic saw many advanced countries hoarding vital products, kits and tools to fight the pandemic. This had serious effects on the third world countries, especially Africa, where the capacity for manufacturing these kits are very minimal. The only saving grace was that the

continent had the least infection rates then. While the hoarding of these kits and products reduced in the last few weeks; a resurgence – or a spectre – of a resurgence of a new wave of the pandemic may lead to further hoarding of these products.

But aside this is the development of economic nationalism. Already, the US is leading opposition to issuance of $1 trillion SDR, which could give countries some financial lifeline. The main argument of US against issuing the Special Drawing Right (SDR) is that it will help China and Iran. Of course, Africa, which require the money most will receive a paltry sum, as her share of global output is very low. But the fact that the US is taking its rotten politics up to the point of freezing any minimal by capitalist class to mitigate the worse effects of the global recession, shows what is in stock should the current economic impasse continue or worsen: growing inter-regional rivalry and nationalism. It should however be noted that this is not a US affair alone. As the economic recession worsens, many countries will struggle to get out of the woods by protecting its economy. This can only worsen the already fragile and frail global capitalist economy and trade.

In addition to the rise in rightwing nationalism and economic nationalism, is the deepening of various conflicts, especially in the third world. In Africa for instance, with limited resources, the region has been trying to curtail various centrifugal forces. With the coronavirus pandemic, and expected economic fallout, many African governments will find it difficult to get enough a fraction of the resources to curtail these conflicts. The story will be similar in other cases. Currently, the Saudi regime is trying to negotiate with opposition forces in Yemen, as the regime concentrate its attention on addressing the coronavirus and its economic fallout, with multifaceted outcomes, not the least the rise of renegade forces within the pro-Saudi ruling force in Yemen. Also, France is trying to disengage itself from the quagmire in northern Mali, with the possibility of these emboldening the Tuareg and militant fighters, and worsen the situation in north only Mali, but Northern Africa/Sahel sub-region. The Nigerian government, and other countries in the Lake Chad Basin, which have been unable to curtail the Boko Haram insurgency, a decade after – not to mention other centrifugal forces (herdsmen-farmers conflicts, militias in the northwest, secessionist groups in the south), will face further problem in fighting the terror group, as resources shrink.

Furthermore, the economic downturn has tendency to worsen humanitarian crisis, especially in the third world. According to World Food Programme (WFP) projection, more than 70 percent of the expected 150 million people that will be affected by food shortage in the world will come from Africa and third world countries of Asia. The struggle for dwindling resources and the social crises the economic crisis will engender in Africa and other third world countries may worsen existing conflicts, or create new ones, as more disillusioned youths find solace in divisive forces and crime. Even in the advanced capitalist countries, there is the spectre of far right and racist tendencies growing, as the struggle for limited facilities, jobs, etc. deepens. Of course, this may not be on the card for now, given the current globalized mass movement against racism as represented by the Black Lives Matter. However, as the economic quagmire worsens, anything can happen, including the rise of a far right leader in power, in any of the advanced economies, which can put far right tendencies on their feet.

7.0 SOCIALIST DEMOCRATIC PLANNING

The Covid-19 health crisis and the economic downturn it has engendered have underscored the need for a democratically planned society and a planned economy that is centred on the needs and wellbeing of the majority. However, we cannot plan the society and the economy with a political economic system that is inherently disorganized, anarchical, individualistic and profit-motivated, which capitalism represent. In order to organize society and plan the economy in the interest of the majority of the population, and for the sake of the environment and future generations, there is the need to put society’s resources under public ownership. This means material and natural resources, scientific and technical knowledge, industrial concerns and big businesses will be put under collective public ownership. Following this will be the democratic control and management of these resources by elected representatives of the working people, communities, trade associations, relevant professionals, through their popular organizations in various sectors and spheres. This is what Socialism entails.

With this, it can be possible to plan for the wellbeing of the majority and direct resources towards immediate needs and future plans. With private ownership of the economy, we cannot plan for the collective and the society as private interests of big business to amass profit and wealth will clash with the need to spend for the public.

What the Covid-19 pandemic has revealed is the need for democratic public ownership and planning to save humanity from calamity thrown up by capitalism or worsened by the capitalist system. Of course, under the best socialist system, there can be disease outbreaks or natural disasters, but with democratic planning and public ownership of the economic mainstay, it can be possible to mitigate the effects of these disasters and diseases. In fact, many diseases can be prevented and avoided with planned health system that prioritizes preventive medicine and environmental sustainability. Many diseases also spread through poverty and want, as witnessed in Africa. Socialist planning will not only focus on piecemeal health policies but will incorporate social and economic policies into the health programmes and policies. By nationalizing the pharmaceutical industry, it can be possible to commit the industry to long term research and development of needed drugs, by breaking the barrier imposed by patenting of discoveries and profit-making from people’s illnesses.

7.1 Globalized Mass Movement on the Horizon

No doubt, the coming period will be a challenging period for the working people, youth and the poor, as they struggle to wriggle out of the health/existential crisis and the economic dislocation imposed by the response of the capitalist governments and capitalist employers to the Coronavirus pandemic. The traditional mass organisations of the working people, especially trade unions, need to start building programmatic actions to defend the working people, and ensure that the burden of the crisis is not offloaded on the shoulders of the workers and the poor. Such programmes must ensure that working people and the poor are not made the guinea pig of capitalist profit making. Their health safety must be ensured. Further, labour movement must be ready to defend the economic interests of working people and the poor.

No doubt, ideas of struggles, strikes and mass actions are emerging and will continue to emerge in the coming period, and labour leaders, in spite of their present cozy relationship with employers, will be forced to respond in kind. The rise of the anti-racism movement, which started in the United States, but has spread like wildfire across the world, is a sign of what is to come, vis-à-vis the growth of international mass movement and uprisings, against capitalism.

7.2 Black Lives Matter: Capitalism is intertwined with Racism

It is worth stating also that capitalism cannot exist without racism and racial discriminations. Racism is a viable tool in profit maximization under capitalism. Available data have shown that blacks and people of colour earn much less than whites in US and Europe. A black American household earns only 59 cents for every dollar of white household. In fact, the household wealth disparity between Black and White is about $29,000 yearly.^xxx Also, there is a form of economic racism between the rich countries of the Western World and poor countries of the Global South (in Africa, Latin America and Asia), that permanently put these poor countries in a form of perpetual underdevelopment. Moreover, the history of capitalism is bound up with the horrible records of slavery – estimated at over $14 trillion in labour values^xxxi –, brutal colonialism and neocolonialism - all of which are worse than present racial discrimination in the western world.

Of course, these different forms of racism are inter-related and intertwined. While slavery ensured the sapping of human resources and intellects of Africa and other neo-colonial region, colonialism, which arose out of this, only formalized the underdevelopment of these regions, and further allowed the colonialists to extract much more resources and wealth through official means. The post-colonial era has only made the colonised regions to become new economic colonies as they could not meet the pace of development in the rich western world. The subsequent economic dislocation, which engendered mass suffering, strife and wars has led to mass emigration to the West from the neo-colonies. This is what capitalism is now exploiting to lower wages and maximize profit. Therefore, the history of capitalism is that of racism, and exploitation of such.

Only an economic system, built on genuine egalitarianism and economic equality can eliminate racism. This is what socialism stand for. By mobilising huge resources of the society, and freeing up privatized social wealth, it can be possible to eliminate want and shortages that drive racism and racial divisions among the working people themselves. Also, with mass political struggles that unite the needs and demands all layers of the working people and the poor of all racial backgrounds, it can be possible to undercut the support base of racism among the working people and poor.

7.3 Revolutionary Platform is key

But ultimately, the question of looking for solutions beyond capitalism will become apparent as the inability of the capitalist system to resolve the health and ensuing economic crisis in the interests of the majority becomes apparent. The ideas of socialism and socialist planning will be thrown up again and again, as more and more people become radicalized by the situation. It is the spectre of this that is driving the capitalist pundits and analysts to the overdrive in defending more doses of capitalist, albeit neo-liberal policies, which threw the society to the present morass in the first place. The question of revolutionary political platforms to begin the process of organizing society, as a dress rehearsal for a socialist democratic organization, will become apparent in the coming period. The growth of mass suffering, and now a pandemic, in the midst of unprecedented superabundance and advances in science and technology, has also shown the very possibility of internationalized revolutionary movement and democratic socialist planning across the world.

However, building revolutionary political platform to utilize the monumental experience of the past struggles to building the basis for a better society is more urgent now than ever. Without this, various mass movements, even if global and widespread, against capitalism, will not lead to a new, better society; but can actually help capitalism to reorganize, or lead to rise of counterrevolution and barbarism..