MARIÂNGELA BERQUÓ enfoca a Geopolítica: COVID-19 , Capitalism & Geopolitical shift of Power

Capitalism, as Thomas Piketty’s Capital in the Twenty-First Century shows, relentlessly worsens wealth and income inequalities. That inherent tendency is only occasionally stopped or reversed when masses of people rise up against it. That happened, for example, in western Europe and the U.S. during the 1930s Great Depression. It prompted social democracy in Europe and the New Deal in the United States.

So far in capitalism’s history, however, stoppages or reversals around the world proved temporary.

The last half-century witnessed a neoliberal reaction that rolled back both European social democracy and the New Deal. Capitalism has always managed to resume its tendential movement toward greater inequality.

Among the consequences of a system with such a tendency, many are awful. We are living through one now as the COVID-19 pandemic, inadequately contained by the U.S.A., Brasil, India, and the worst of European capitalist system, savages people of middle and lower incomes and wealth markedly more than the rich.

The rich buy better health care and diets, second homes away from crowded cities, better connections to get government bailouts, and so on. Many of the poor are homeless or live in slums and precarious households. Tasteless advice to “shelter at home” is, for them, absurd. Low-income people are often crowded into the kinds of dense housing and dense working conditions that facilitate infection. Poor residents of low-cost nursing homes die disproportionally, as do prison inmates (mostly poor).

Pandemic capitalism distributes death in inverse proportion to wealth and income.

Social distancing has destroyed especially low-wage service sector jobs. Rarely did top executives lose their positions, and when they did, they found others. The result is a widened gap between high salaries for some and low or no wages for many. Unemployment invites employers to lower wages for the still employed because they can. Pandemic capitalism has provoked a massive increase in money-creation by central banks. That money fuels rising stock markets and thereby enriches the rich who own most shares. The coincidence of rising stock markets and mass unemployment plus falling wages only adds momentum to worsening inequality.

Unequal economic distributions (of income and wealth) finance unequal political outcomes. Whenever a small minority enjoys concentrated wealth within a society committed to universal suffrage, the rich quickly understand their vulnerability. The non-wealthy majority can use universal suffrage to prevail politically. The majority’s political power could then undo the results of the economy including its unequal distribution of income and wealth. The rich corrupt politics with their money to prevent exactly that outcome. Capitalists spend part of their wealth to preserve (and enlarge) all of their wealth. The rich and those eager to join them at all costs.

Let’s take the example of the United States of America, the greatest capitalist of all. Ih the US, the rich provide most of the donations that sustain candidates and parties, the funding for armies of lobbyists “advising” legislators, the bribes, and many issue-oriented public campaigns. The laws and regulations that flow from Washington, states, and cities reflect the needs and desires of the rich far more than those of the rest of us. The peculiar structure of U.S. property taxes offers an example. In the U.S., property is divided into two kinds: tangible and intangible. Tangible property includes land, buildings, business inventories, automobiles, etc. Intangible property is mostly stocks and bonds. Rich people hold most of their wealth in the form of intangible property. It is thus remarkable that in the U.S., only tangible property is subject to property tax. Intangible property is not subject to any property tax.

The kinds of property (tangible) that many people own get taxed, but the kinds of property (intangible) mostly owned by the richest minority do not get taxed. If you own a house rented to tenants, you pay a property tax to the municipality where the house is located. You also pay an income tax on the received rents to the federal government and likely also the state government where you live. You are thus taxed twice: once on the value of the property you own and once on the income you derive from that property. If you sell a $100,000 house and then buy $100,000 worth of shares, you will owe no property taxes to any level of government in the United States. You will only owe income tax on dividends paid to you on the shares you own. The form of property you own determines whether you pay property tax or not.

This property tax system is excellent for those rich enough to buy significant amounts of shares. The rich used their wealth to get tax laws written that way for them. The rest of us pay more in taxes because the rich pay less. Because the rich save money—since their intangible property is not taxed—they have that much more to buy the politicians who secure such a tax system for them. And that tax system worsens inequality of wealth and income.

Unequal economic distributions finance unequal cultural outcomes. For example, the goal of a unifying, democratizing public school system has always been subverted by economic inequality in the US, and in my country, Brasil, for the last 55 years. In general (with few exceptions), the better schools cost more to attend. The tutors needed to help struggling students are affordable for the rich but less so for everyone else. The children of the wealthy get the private schools, books, quiet rooms, computers, educational trips, extra art and music lessons, and virtually everything else needed for higher educational achievement.

Unequal economic distributions finance unequal “natural” outcomes. The U.S., Brasil and Europe now display two differently priced foods. Rich people can afford “organic” while the rest of the population worry but still buy “conventional” food for budget reasons. Countless studies indicate the dangers of herbicides, pesticides, chemical fertilizers, food processing methods, and additives. Nonetheless, the two-price food system delivers the better, safer food more to the rich than to everyone else. Likewise, the rich buy the safer automobiles, more safely equip their homes, and clean and filter the water they drink and the air they breathe. No wonder the rich live years longer on average than other people. Inequality is often fatal, not just during pandemics.

In ancient Greece, Plato and Aristotle worried about and discussed the threat to community, to social cohesion, posed by inequalities of wealth and income. They criticized markets as institutions because, in their view, markets facilitated and aggravated income and wealth inequalities. But modern capitalism sanctifies markets and has thus conveniently forgotten Plato’s and Aristotle’s cautions and warnings about markets and inequality.

The thousands of years since Plato and Aristotle have seen countless critiques, reforms, and revolutions directed against wealth and income inequalities. Why did so many heroic efforts at equality fail?

The answer concerns the economic system, and how it organizes the people who work to produce and distribute the goods and services societies depend on. If its economic organization splits participants into a small rich minority and a large non-rich majority, the former will likely be determined to reproduce that organization over time. Slavery (master versus slave) did; feudalism (lord versus serf) did; and capitalism (employer versus employee) does. Inequality in the economy is a root cause contributing to society-wide inequalities.

We might then infer that an alternative economic system based on a democratically organized community producing goods and services—not split into a dominant minority and a subordinate majority—might finally end social inequality.

Is it utopic? I am no Thomas More and his treat De optimo reipublicae statu, deque nova insula Utopia is still the reference of the “impossible”. However, as his Utopia is placed in the “New World” and Thomas More links his Raphael's main character travels with Américo Vespucci’s's real life voyages of discovery, and suggests that Raphael is one of the 24 men Vespucci, in his Four Voyages of 1507, says he left for six months at Cabo Frio, in my country, Brasil, before travelling farther to find the island of Utopia, where he spends five years observing the customs of the natives, I, as Brazilian, can at least hope that that Utopia might exist, or might be created – perhaps in my very homeland someday in the future when my people will have learned from the horrible Bolsonaro’s experience. I know it’s far-fetched, but allow me to dream, a little bit, as this dreadful year 2020 is ending, but the COVID-19 is still alive and kicking in.

Ironically, the COVID-19 has been a blessing for the very country that spread it world wide, China. The new coronavirus pandemic has created an opportunity for Beijing to strengthen its burgeoning relations with Iraq’s semi-autonomous oil and gas-rich Kurdish region of northern Iraq (KRI) through medical aid.

On March 8, the Chinese government sent 200,000 face masks to KRI to help the Kurdish Regional Government's (KRG) efforts to stem the spread of the virus in the region.

In the following weeks, Beijing delivered several other large batches of medical aid containing different types of personal protective equipment (PPE), medical devices and COVID-19 testing kits to the KRI.

The aid shipments were highly publicised and widely celebrated in the KRI. On April 20, for example, China's Consul General to Erbil Ni Ruchi and KRG Health Minister Saman Barzinji held an hourlong news conference to announce the arrival of a new shipment of aid.

Speaking in front of Chinese cargo planes at the Erbil International Airport, Ruchi said China was going to be "a friend of the people of the Kurdistan region during hard times". At the height of the crisis, the Chinese Consul General also appeared on local TV channels in KRI, offering advice to the Kurdish people on how to take the necessary measures to contain the virus.

China also sent a medical team to the Kurdish region to help the KRG. During their four-day visit, Chinese doctors visited local hospitals and held panels to share their experience in treating coronavirus infections with their Kurdish counterparts.

Chinese companies also chipped in to help the Kurdish region during the COVID-19 crisis. On April 1, China Oil HBP group, a Beijing-based oil and gas resource development company, donated 30,000 masks and 5,400 COVID-19 testing kits to the KRG.

Sino-Kurdish relations are relatively new despite the overwhelming influence communist China's founding father Mao Zedong's political thoughts had on the Kurdish freedom movement.

China only started to become a real diplomatic and trade partner to Iraqi Kurds after the overthrow of Saddam Hussein's government in 2003.

Jalal al-Talabani, then leader of the Patriotic Union of Kurdistan (PUK) who would later become president of Iraq, paid an informal visit to China in early August 2003. Subsequently, delegations from the PUK and the Kurdistan Democratic Party (KDP) visited China. These visits were promptly reciprocated by senior Chinese officials.

In December 2014, when the ISIL (ISIS) group was at the peak of its strength in Iraq, China showed its support for the Kurdish people and the regional government by opening a consulate general in Erbil. China chose to send delegates to the region at such a dangerous time because it believed the economic gains it would make as a result of the move outweighed the risks. At the time, the KRG had already taken control of the oil-rich province of Kirkuk and built a link to connect the oilfields there to its newly built pipeline to Turkey, raising its oil production to 400,000 barrels per day.

Last year, China visibly increased its efforts to strengthen ties with the region.

In April 2019, Li Jun from Communist Party of China's (CPC) Central Committee paid a visit to Erbil and officially invited KRI President Nechirvan Barzani to Beijing. Li told Barzani that China's President Xi Jinping "recognises the vital role the Kurdistan Region played in combating terrorism and defeating the so-called Islamic State".

A few months later, in August, the Chinese Consul to Erbil, Ruchi, launched the official Facebook page of the consulate with a video message. In the Kurdish language message, Ruchi said the Chinese government is eager to develop its relations with the KRG, highlighting the two peoples' historic "friendship" that dates back to the ancient Silk Road.

In October 2019, a delegation from the Chawy Kurd Center for Political Development, a Kurdish political education NGO, visited China on the invitation of the Chinese government to promote Sino-Kurdish ties. The same month, the centre published "China's Governance", a two-volume book authored by President Xi in which he highlights his thoughts on governance, economic development, and leadership.

Also in October, the KRC's first Chinese language department was opened at Erbil's Salahadin University. Subsequently, in November 2019, a Chinese cultural and commercial centre was established in the region for the first time.

Despite these efforts, China's relationship with the KRG remained limited and superficial until recently. The COVID-19 crisis, however, finally provided China with the opportunity to deepen and expand its relationship with the region and emerge as a strong strategic partner that could offer crucial help in times of need.

Indeed, during the coronavirus crisis, Beijing's image and prominence in the Kurdish region have improved significantly. Common Kurds who previously viewed China solely as an exporter of cheap but poor quality goods and products started to perceive Beijing as a global power that could provide the region with much needed economic and structural support. Moreover, more and more Kurds started to acknowledge China as an effective and powerful actor in the Middle Eastern political arena that could influence the KRG's future international prospects.

China has a lot to gain from strengthening its ties with Erbil. If Beijing succeeds in becoming a prominent player in the KRG, it can not only make significant trade gains, but also use it as leverage against Turkey.

In recent years, Turkey has become a sanctuary for political organisations and NGOs that are working to end the persecution of the Turkic Uighur minority in China. The Turkish government has also been vocal on the issue, calling on international organisations and other states to sanction China for its human rights abuses against Uighurs and other minorities.

China can try to use its growing influence over the Iraqi Kurdish region to silence Turkey through engagement with Kurdish organisations and groups defending Kurdish rights in Turkey. Although there is no indication of such cooperation yet, Beijing's investment in cultivating stronger political, economic, and cultural ties with the Kurds could pay off in the long run.

China's rapid move into Iraqi Kurdish region could well be an opportunity for the KRG, but it presents a problem for Washington.

The United States has been the primary provider of financial, security, military and political support to Kurds in Iraq since 1991. However, recent events significantly damaged the relationship between Erbil and Washington.

In 2017, after Iraqi Kurds overwhelmingly voted for independence in a referendum rejected by the central Iraqi government as "unconstitutional", US President Donald Trump failed to support the Iraqi Kurds. Consequently, Iraqi forces and Shia armed groups known as Popular Mobilization Forces drove Kurds out of Kirkuk. And some two years later, the Trump administration disappointed Kurds in Iraq once again by abandoning their brethren as they were facing an existential threat in Syria. All this led to Kurds viewing the US as an increasingly untrustworthy ally, and starting to look for other supporters.

Today, China appears to be capitalising on Washington's fading popularity in the Iraqi Kurdish region. Eventually, Beijing's multipronged outreach strategy that is clearly already increasing economic, cultural and political ties between KRI and China, could allow it to claim the role of primary global power in the region.

The Iraqi Kurdish region is one of the US's most successful state-building projects to date, despite its failures and shortcomings in the rest of Iraq. Moreover, the KRI, with its vast natural and human resources, has immense geopolitical importance for the US and its allies. Washington, which is already at loggerheads with China on many issues, cannot afford to lose the KRG to Beijing.

But the coronavirus crisis that allowed China to make significant inroads into the KRG also offers the same opportunity to the US.

Erbil still needs significant financial and medical assistance to manage the ongoing public health emergency. The Kurdish enclave is in dire straits due to the decline in oil prices and Baghdad's decision to cut its share of the national budget.

Washington can easily improve its image in the KRG by sending medical help and helping Erbil and Baghdad reach an acceptable financial agreement.

Today, Washington may well think Iraqi Kurdish region is not one of its priorities. But if it does not take swift action to assure Iraqi Kurds that the US still has their back, China can easily take its place as the primary benefactor - and decision-maker - in the region.

The Llistening Post July 2020