Immigration control and racism in the workers movement the length of time varies according to the agreement with the country of origin -an immigrant can obtain a permanent resident's permit. In principle, this means unlimited stay. Permanent immigrants have the same social entitlements as the Swiss. In the official terminology they are treated as indigenous.
Of Switzerland's total population of 6.5 million, a little over one million
Of a total of three million available jobs, 700,000 of are immigrants.
them are held by immigrants. In other words, one resident in six and one worker in four has a foreign passport, while seven immigrants out of ten
Switzerland, along with Sweden, has the highest proportion are working.
of immigrants in employment in Europe — that is, it most efficiently exploits immigrants.
Apart from this very skillful political and economic utilisation of immigration by the Swiss bourgeoise, country has a number of special features; the large numbers involved, the long history of discriminatory legislation against immigrants, the inand their organisations to defend immigrant ability of Swiss workers workers and the deep and long-standing imprint of the nationalist movement led by the extreme right.
Urs FAUCHER
Having been an exporter of labour in the last century, Switzerland had, in the period preceding the First World War, a foreign population comparable to today's, representing 15 per cent of the country's
Throughout this century, inhabitants.
the intake of immigrant workers has followed exactly the course of the economic
After a rapid decline beginning in cycle.
the 1920s with the lowest point being in
1940 (immigrants were then 5 per cent of the total population), the percentage of immigrants rose steadily to reach 15 per cent in the 1970s.
Leaving aside the very small number of foreign capitalists living off their fortunes deposited in Swiss banks or dodging taxes in their own country, the great bulk of immigrants are working class.
In their workers,
Swiss recruiting employers have been past masters in the art of exploiting regional inequalities in international economic development so as to get a destitute workforce, willing to
After the Second work for low wages.
World War they particularly went after
Italian workers, who still represent the largest group of immigrants 412,000 people, of whom 285,000 were working in 1983). Apart from French and German immigration there is also Spanish
(100,000 people of whom 87,000 work), and
Yugoslav
Turkish.
Portuguese,
The fact that Switzerland includes four different linguistic regions could have been a favourable condition for the development of an internationalist consciousness in the working class.
The bourgeoisie clearly had no such inclination. While building a network of capitalist interests on a world scale (1), since the end of the First World War, the bourgeoisie has instituted legislation that not only denies immigrant workers most of the rights accorded to Swiss democratic
International Viewpoint 30 July 1984 the situation of immigrants in this workers, but also imposes a strict control of their numbers and on their actions.
On the economic level, the bourgeoisie has been able to use this legislation skilfully to manipulate the immigrant workforce to suit the needs of the business
On the political level, immigration has been used to paralyse the Swiss workers movement through exacerbating divisions between immigrants and indigenous workers. Draconian immigration laws
The immigration laws date from 1931. They were adopted after a federal refercharacteristics:
Only the right to stay not the right to work is regularised in Switzer-
Democratic rights for immigrants are dependent on length of stay in the country. In a sense it is a legislation based on mistrust of newly arrived immigrants. Political rights are denied them. (3)
- The code is built around the political objective of keeping the country from being overwhelmed by foreigners (in German, Ueberfremdung), which gives a lever to the nationalist and xenophobic movements.
The application of these principles means immigrants live and work under different legal conditions that divide and isolate them, undermining their capacity for collective defence. Five different immigrant statutes exist.
Short term immigrants. Such immigrants have the right to legal residence in Switzerland. They must, however, renew their permits every year. These permits can be withdrawn for political or
Seasonal immigrants. These immigrants, working mainly in the building industry, in hotels and in agriculture, cannot stay longer than nine months in the
Their work contract is also terminated once a year. As a rule, they cannot change the canton they live in nor the industry they work in. Legally they are not regarded as residents of Switzerland, and their families are not allowed to join them. They live in housing belonging employer and have no other function but to work. Only a minority of 'seasonal' workers have been able after several seasons of work in Switzerland to acquire permanent residence (7,000 or 8,000 out of a total of 100,000). have to leave the country every day. They work in the border regions and live in a neighbouring country. renewable permits are issued for a threemonth maximum period
Added to these five categories, as in all systems of immigration control, is that of 'clandestine' immigrants who have no rights, and add up to tens of thousands of
Since 1962, the Swiss government has set quotas for immigrant workers. Since 1973 this has become very restrictive for 'short term' immigrants. Only a few hundred in this category are admitted into each canton. This quota system is much less restrictive for "seasonal workers, whilst border' workers are not affected at all.
The quota policy, alongside the economic recession has led to a stabilisation of the permanent immigrant population, whilst the number of immigrant workers not resident in Switzerland varies according to economic fluctuations - annually, conjuncturally and in different industries.
Stabilisation of the pattern of immigration has meant a predominance of permanent immigrants over 'short-term1. Switzerland invests more capital abroad per head of the population than any other country. 2. Under the Swiss constitution any proposition that obtains the necessary signatories can be put forward for a referendum. With 50,000 signatures, you can force the Federal government to submit parliamentary decisions to popular vote. This is called a referendum With 100,000 signatures to the text of a particular proposition, it is possible to get a popular vote making changes in the Federal constitution.
two Cantons Jura and Neuchatel -where immigrants of long-standing have the right to participate in local elections - they are barred from standing as candidates.
21
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ers' and a relative growth in the number and third generation immiggrants born in Switzerland (see Table I).
### CATEGORIES OF IMMIGRANTS
(in thousands)
In order to maximise profits from the post-war boom, employers from 1945 onwards relied on an extensive increase in production.
The domestic labour shortage nearly wrecked this project, bringing on wage rises even without any trade-union struggle. These twin perils could be avoided thanks to the employment of immigrant labour, available in massive numbers from neighbouring countries and ready to work for low wages.
Production and profits rose spectacularly. In contrast, the average wage rise and the beginning of the 1960s, immigration played the classic role of a reserve
Since this situation continued uninterrupted in Swizterland until the mid1970s, immigrant workers began to acquire, little by little, a structural role in economic life. In industry as well as in construction and catering (hotels) they occupied a very important position, turing industry they dominate production jobs. Swiss workers themselves have 'emigrated' towards employment in the One of the 'foreigners' at work (DR)
088 22 tertiary sector, taking up technical and supervisory positions in industry.
The majority of immigrants employed in industry have a skill and a 'long term'
But the system of several categories of immigrants still means that many thousands of immigrants with precarious status (border, seasonal, shortstay, clandestine) continue to play the role of a reserve army within the industries in to which they are channelled.
The Swiss ruling class deliberately use the immigration laws to avoid pressure rationalisation in certain backward regions and industries. The price for this is clearly paid by all the workers concerned, whether they be Swiss or immi-
A few examples will suffice to prove this. In Tessino, where 36 per cent of industrial jobs are occupied by 'border' immigrants, the 1978 wage levels were 16 per cent less than the national average and 23.2 per cent less than the average wage in industry. In construction, catering where the majority of wages are lower than in other branches of industry, and the hours of work much longer (47, 54, sometimes 60 hours per
IMMIGRANT WORKERS
Manufacturing
But the ruling class derive a further imfrom immigration. The children of immigrants provide Swiss capitalism with a reservoir of unskilled labour for the future. The authorities refusal to make up for the linguistic handicaps that penalise immigrants' children in the school system, keeps a large number of them from getting proper training.
In 1983 the percentage of young immigrants (between 16 and 19 years old) without an education (that is, 42.3 per cent of immigrant youth) is double the average for Swiss youth (21.6 Immigration and the unions
The main advantage of the immigration laws for the Swiss bourgeoisie however became clear in the economic recession of 1974. Immigration during that period cushioned the effects of the econ-
The number of jobs plummeted, without this showing up in the unemployment figures.
Between 1973 and 1977 the economically active population declined by 280,000, of whom only 73,000 were indigenous workers, the rest being immi-
Three quarters of the job loss therefore hit immigrants. The conclusion that make it possible to send unemployed immigrants back to their countries of origin help to export unemployment.
The comparison of trends in immigration with that of the gross national product in 1973 shows a striking parallel. But for the period of economic recovery after the crisis of 1974, this comparison shows also that the ruling class has used the combination of economic fluctuations with the policy of immigrant quotas as a lever for reconverting from an economy of extensive growth to one intensive growth. The rationalisation of Swiss capitalism in the course of the economic crisis permitted a rise in the GNP after 1977, while the foreign resident population stabilised at the 1965
However, it is unlikely that the ruling class will be able to repeat their 1974 success. Immigration today plays a structural role in the economy, and any move toward rationalisation and restructuring affects both Swiss and immigrant workers. The country is now experiencing real unemployment (1.2 per cent of the active population, 4 per cent in Biel or Basle [Basel].) which is not going to be entirely absorbed as it was in 1974 by the departure of unemployed immigrants.
The ease with which the bourgeoisie has been able to manipulate immigration for their profit is not due to their strength, but flows above all from the total inability of the workers movement to respond to the bosses' manoeuvres with a resolute policy of working-class unity.
In hundreds of decisions taken from the 1950s onwards, workers organisations in Switzerland have opposed immigration. The inflow of foreign workers
International Viewpoint 30 July 1984
was perceived simply as a manoeuvre by the employers. Because of fear of 'communist vermin', no effort was made to integrate these new members into the
The Union Syndicale Suisse (Swiss Federation of Trade Unions - USS), the main union confederation in Switzerland, dominated by the Socialists, was in 1958 the first organisation to statutory limitation on immigrant labour and for prioritised protection of the indigenous workers. This approach directly influenced the policy of the unions.
After the Second World War signed, with the employers, the "social peace' accords in which 'both partners' agreed to renounce all forms of strikes
In this framework, wage for the workers entirely on the pressures of supply and demand in the labour market. recourse to foreign labour enabled the employers to resist such pressures.
unto leade shipe, there ment, bed the
alternative but to try to put this pressure back on through any means which came
For years they did not hesitate to whip up nationalistic and xenophobic feeling to achieve their ends.
Gradually coming to realise that immigration was going to continue and that immigrant workers were an important base of recruitment, the union leaderships did modify their position during the 1970s. Nowadays, they say that stabilising the number of immigrants is an essential corollary to increasing their
In practice, however the union leaderships are pressing the government number of "short-term' or 'seasonal' workers and introduce a for "border' By comparison, they raise fewer and less hard-hitting demands for improving immigrants' rights.
Certainly, the unions and the reformare making some efforts at recruitment of immigrants, but the policy of social peace, the dismal record of the unions which flow from it, and their terrible position on immigration do not attract immigrants.
The result is that the unions and the reformist parties have no real impact on the policy which the bourgeoisie conducts against immigrants. left helpless in the face of agitation from nationalist or far-right organisations.
The anti-foreign movement was born in 1961 in Winterthur. It is most widely known as the 'national action against the foreign takeover. They apply a strictly legal strategy, using institutional methods such as petitions, legal propositions and referendums. Their method consists of accusing the government of not applying the law of 1931 which had the objective of fighting overpopulation by
On the electoral front, the anti-foreign movement has registered varying but modest support. However, the propositions they make to reduce the number of International Viewpoint 30 July 1984 immigrants and restrict their rights always have a mass impact. none of their referendum propositions have been approved by the majority, they have all got high votes and the bourgeoisie has been able to take advantage of this for fifteen years to step up their policy of dividing the working class.
In the last few years, the nationalist and racist currents have had the wind in their sails. Their electoral results have im-
In 1982 they managed to bring about the defeat of a referendum proposition for a new law on immigrants, even though in fact it would have done little or nothing to improve the immigrants'
At the moment they participating, alongside the rest of the right, in a hate campaign for the restricting of the right of political asylum. They are also getting signatures for a new antiimmigrant proposition. This has a good chance of getting adopted because appears moderate. Its application, however, would consolidate the legal division between Swiss and immigrants.
The influence of the immigrant organisations is limited. It is estimated that only 10 per cent of the immigrants are affiliated to an organisation. Spanish and nationally coordinated and impact on the political scene. Spanish and Italian CPs play a key role but they are only interested in ensuring The fight for unity
Before the 1974 recession immigrant organisations intervened actively in Swiss political life against the right wing. Nowadays, they relate mainly to their own countries, although immigrants continue an active role in trade-union struggles that have taken place. In 1980 association of immigrants called Free Italian Colonies launched a national petition to demand civil for immigrants and at the beginning of the year they started a petition in support of the proposition put forward by the USS for introducing the 40-hour week.
The impact of this activity is obviously limited by the weakness of the current for unity between indigenous and immigrant workers. Such a current does, however, exist and has not been deterred
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from its project, despite the difficulties which its activities entail. Workers Party (SAP/PSO), Swiss section of the Fourth International, has played an active role in it since its foundation.
In the first half of the 1970s, efforts were concentrated in the fight against the far right. Many immigrants participated actively and mobilised alongside the left. This movement however had strictly no impact on the official labour movement The latter was pursuing a collaborationist policy leading in 1970 to a joint campaign with the employers and the government 'against xenophobia' the mid-1970s, decided that the time had come to go on the offensive. They launched a referendum under the slogan 'Stick together'. In fact, this proposition took on the language of the official labour movement. They proposed to fight for the demand for equal rights for Swiss citizens and immigrants, the abolition of the seasonal worker status and against the draconian measures to limit further immigration.
This proposal gained real support in the labour movement and drove the USS to at last support the demand for the abolition of the status of 'seasonal work-
All the parties of the left including the SAP/PSO and several other unions called for a yes vote when the referendum was held in April 1981. The result was a
Only one seventh of the electorate voted in favour. moralised many Swiss and immigrant activists. The collaborationist union leadership, the government, the major parties of the right and the left, as well as the extreme right saw their respective posti-
The fight for unity has not ended there, and the SAP/PSO attaches great importance to it, unlike the other left parties that have a tendency to disregard an area of such poor electoral interest.
The SAP/PSO has always demanded equal social and political rights for all those who live and work in the country. It has raised calls for political asylum and denounced the de-facto collusion between ruling class strategy and the vermin of the fascist right. At the same time, the SAP/PSO has sought to convince Swiss and immigrant workers that they wrong to seek refuge in quotas, with the surveillance they entail over a section of the working class.
The SAP/PSO currently has twin objectives. Firstly, a current for working class unity has to be built by demonstrating, on the basis of facts, that the need to break the policy of 'social peace' goes hand in hand with the need to achieve solidarity and equality between Swiss and immigrant workers. of such an understanding, linking up systematically, the immigrant organisations workers rights in this country.
This will be a long and relatively unspectacular struggle, but it is essential for the future of the Swiss labour move-
this industry, since the inventories had been wiped out and current sales were running above current production.
In fact, automobile production rose from 550,000 vehicles in June 1982 to
An economic upturn coupled with a financial crisis
700,000 in May 1984, an increase of more than 25%. The upturn was still stronger in the building industry. The number of buildings under construction went from 900,000 in June 1982 to 1.8 million in June 1983, and to 2 million in May 1984, amounting to an increase of more than 100% in two years. Overall industrial production increased by
The year 1983 was marked by an upturn in the world capitalist econ
It began in the United States, and then over 1983 and the tirst quarter of 1984, it spread to Canada, Japan, West Germany, Great Britain, some of the minor imperialist powers in Europe, the semi-industrialized countries in Southeast Asia, as well as Brazil.
be felt also now in Italy and France.
countries, however, have been left out of the upward movement.
Ernest MANDEL
The essential reason for this upturn is a buoyancy of demand in the United
The North American domestic market, the largest sector of the world market, has attracted a growing mass of foreign commodities, thereby stimulating a new thrust of economic activity in the countries cited above. (See Table I.) The new rise of the economy in these coun tries, thus, has been brought about by the expansion of their exports to the United
States and not by the expansion of their own internal markets.
The peculiar character of this world economic upturn is, therefore, reflected by a growing deficit in the US balance of
Such a deficit could send the rate of the dollar plummeting if it were not for the constant inflow of new money capital to the United States. But there is only one way to keep the money coming in. That is to maintain the high American interest rates, which in fact include a high
TABLE I: Evolution of industrial production in 1984 (except Argentina)
compared to the corresponding month of the previous year (in %)
%
Month
Country
Argentina last quarter
4.0
1983
March 1984
6.2
Australia
February 1984
3.3
Belgium
2.0
February 1984
Brazil (1)
March 1984
10.3
Canada
April 1984
7.5
South Korea
4.7
March 1984
France
March 1984
3.1
West Germany
13.0
January 1984
Mexico (2)
March 1984
6.3
Netherlands
4.2
January 1984
Italy
9.0
March 1984
Sweden
March 1984
2.3
Great Britain
7.5
April 1984
Taiwan
12.0
April 1984
Japan
14.4
April 1984
USA
The Neue Zuercher Zeitung gives a 3.9%
1.
rate of increase for the first quarter 1984.
Compared to January 1982.
2.
The Economist,
June 16, 1984,
Source:
countries of south-east except for the three
Far Eastern Economic
Review, June 7,
Asia,
1984.
24
It is beginning to
A series of so-called third world insurance premium against a devaluation of the dollar.
Such a rise in US interest rates has different immediate effects on the various capitalist national economies, depending on two factors. The first is whether they are heavily indebted or not. In the case of the third world, whose debts are essentially in dollars, with half at a variable interest rate, every increase of 1% in the interest rate imposes additional charges of 3.5 billion dollars. The second factor is whether or not the coun try in question can expand its exports to the US rapidly. This depends on their relative competitivity, the elasticity of American demand for the specific produets they export, the excess productive capacity that they have at the start of the upturn, and so on.
process explains why not only Argentina, Mexico, and the poorer semi-colonial countries are being drained, but French president Mitterrand, the king of Spain, and Greek premier Papandreou are moaning and groaning too. On the other hand, not only Japan, West Germany and Sweden are rejoicing, but South Korea, Taiwan, Singapore and even India are profiting from this conjunction between upturn and international financial crisis.
At first glance, the economic upturn in brought on a corresponding movement in Canada, seems to have assumed a quasitechnical or automatic form. For several decades, the two lead industries in the economy of the imperialist countries have been auto and building, and the subcontracting sectors linked to these two
In these two industries fluctuations in production have been greater - five times larger in terms of percentages - than in industry as a whole. Drops in production of the order of 30% to 50% in these industries lead to falls in overall industrial production of the order of 5% to 10%.
Over the 1980-82 recession, US automobile production fell from the level of 7 million vehicles a year at the beginning of 1981 to 4.5 million, at the annual rate of production in March 1982. There was, therefore, room for a strong upturn in
13% in 1983. In the first quarter of 1984, it was growing at an annual rate of 15%.
However, if you take a closer look, you see that this "technical" aspect of the upturn is hardly sufficient to explain
First of all, the "renewal of inventories" lagged behind the upturn. It only in the third quarter of 1983. Moreover, the upturn has gone ahead of reduction in unemployment, while real wages have been stagnating or declining Clearly, therefore, there has been a swelling of overall demand not rooted in increased sales (and production) of consumer goods and intermediate products.
investment has also been The role of military spending
The source of this upturn is, thus, clear - increased public spending, essentially military spending It is Washington's yearly budget deficit of 200 billion dollars that is at the root of the American upturn. Everything else flows from that.
According to Marxist economic theory - as well as neoliberal economic theory, by the way - a vigorous economic upturn stimulated by military spending should fuel inflation. This is in fact what has happened. The yearly inflation rate in the US now stands at 5.5%, as against 3.5% in West Germany and 4% in Japan and Switzerland. When you recall that the average rate of inflation in the US in the 1950s was less than 2%, you can see that Reagan has by no means overcome
However, this surge of inflation has been cushioned up until now by two factors. The first is the great excess productive capacity in the US at the start of the upturn (more than a third of installed capacity was unutilized toward the middle of 1982). The second is the massive influx of foreign money-capital. This financial inflow has made it possible to wipe out the deficit in the US's trade deficit, thereby preventing a deficit in the balance of payments, which would have touched off a process of mushrooming inflation.
The rise in US interest rates is linked both to the budget deficit and to a deliberate policy of the Federal Reserve Bank of maintaining a high rate of exchange for the dollar. The fact that the budget deficit has persisted in the midst
International Viewpoint 30 July 1984
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ECONOMY.
of an upturn means that the demand for new money-capital is coming both from capitalist firms and the public authorities. It is, therefore, tending to exceed supply. As a result, interest rates are rising. Given the resumption of inflation and the American trade-balance deficit, foreign capitalists will only place their moneycapital in the US if the interest rate is such as to guarantee them against an anticipated fall in the exchange rate of the dollar. (1)
With nominal interest rates at 13% and inflation at 5.5%, the real interest rate is 7.5%, which is an usurous rate. This affair clears up if you consider that the capitalists are counting on at least a 10% drop in the rate of the dollar, even though no one knows exactly when that will happen and at what level the drop Street.
It threatto go down.
mining products from the analysis - is still more pronounced. In fact, the US is losing its place as the world's biggest exporter of manufactured goods, being overtaken by
Japan and West Germany.
The American upturn and the overvaluation of the dollar have thus been the locomotives pulling the rest of the world capitalist economy out of the recession, although at very different tempos, extents and timing in the various countries (see Table II). But these forces can only do that insofar as they are not neutralized by rising costs for American industry's principal competitors. So, we get a double paradox. It is Reagan, and not Francois Mitterrand, Felipe Gonzalez,
Bettino Craxi, Margaret Thatcher, Nakasone or Helmut Kohl, who is applying a neo-Keynesian policy in the capitalist world today to stimulate an upturn.
policy only benefits Japan, Canada, West
Germany and the rest of capitalist Europe insofar as Reagan is the only one to apply
TABLE II
Differences in
Price of electric export prices between 1979 machines for export in US and 1982 calculated from a dollars in the base in US last quarter of dollars
1982
(100 = 1979)
USA
+ 31.3 %
126
0.8 %
90
Japan
West
Germany
- 12.9 %
83
Source: Lloyds Bank Review, April 1984.
Obviously, the overvaluation of the dollar must not be exaggerated.
deterioration of the United States's position on the world market for manufactured products is, in the last analysis, the result of a long-term structural evolution, of an erosion or wiping out of the lead in productivity of American industry, even in the most advanced sectors.
This is shown clearly by the following
TABLE III: US share of world exports
1970
1980
71%
62%
Aircraft
Computers
42%
36%
Construction, public works, and mining
39 % machinery
39 %
Scientific, medical and
29% control equipment
32 %
Tractors and agri-
31% cultural machinery
32%
Pumps and com-
21%
29 % pressors
Telecommunications
19 %
13 % material
Medical and pharma-
18 %
16% ceutical products
13%
Machine tools
17 %
Source: Foreign Policy, No 53, Winter 1983/
1984.
overvalued dollar.
These coun demand is high.
slight upward against the dollar.
Table IV attests.
with caution.
division of labor.
Sometimes, what is production was general movement.
of the less than to
1.
change in the value of the dollar on the level of interest rates in the United States," see an ar
Manufacturers
Hanover written by the ticle
Investment Corp. of New York that appeared under that title [retranslated from the French] in the February 1984 issue of the magazine
Euromoney.
2.
We have dealt with the problem of the of semi-industrialized dependent emergence countries in an article in Quatrieme Internationale, No 13, April 1984.
25
TABLE IV: Imports of manufactured products by the USA
1973
1977
Total in billions of dollars
42.5
74.7
In % (1)
From Europe
36.0
28.5
21.5
24.5
From Japan
1982
1981
1983
1980
145.2
163.0
124.2
142.1
27.0
25.0
24.3
29.7
25.4
24.6
27.4
25.6
"bad debts" of some Latin American countries to this bank played only a minor part in the lack of cover that appeared. It was, in fact, caused by illconsidered loans to the following sorts of
Speculators in the energy sector, such as Nucorp Energy, which went bankrupt, leaving Continental
From Canada 24.7 24.5
From Third World countries 12.5 18.8 1. In 1966 the respective shares were: 43% for Europe, 23.4% for Canada, 20.8% for Japan, and 10.6% for the Third World countries. Source: OECD and the Trade Department of the US, statistics summarised by Le Monde, June gan with the recession of 1980 for the world capitalist economy as a whole, you have to first see what these cycles upturns, in 1976-1979 and in 19831984, propelled by a considerable new expansion of indebtedness - government debt, business debt and consumer debt. But the direction of the lending has profoundly changed. In 1975-79, the expansion of credit went mainly to governments and big businesses in third world countries (including the OPEC countries), as well as in the bureaucratized workers
In the period 1980-1984, and this will probably continue in 1985, the expansion of credit has gone mainly to the nationals" and "national" trusts in these
This lending obviously has come from the banks in the imperialist countries. They continue to be the only ones that have large reserves of money-capital, or, which amounts to the same thing, the only ones who extend credit for large-scale financing operations. (3)
It was not, therefore, because the countries of the so-called third world had big needs for capital in 1974-79 that billions of dollars were lent to them in
Their capital needs are always insatiable, as, by the way, are the states for additional credits in the currencies of the imperialist countries.
The reason for this lending was that the demand for new money-capital suddenly fell off in 1974-79 in the imperialist countries, as a result of the decline in investments. So, the big imperialist banks offered their excess capital, which moreover was swollen by petrodollars, to the third world and Eastern Bloc countries.
This inflow of credit obviously came into a context shaped by the model of accumulation chosen by the "national" bourgeoisies of the industrialized countries, which is export
But, precisely because of the crisis, the growth in these countries' exports could not keep pace with the rate of increase in their indebtedness.
As a result, like the rising interest rates in the US, the weight of indebtedness has grown serious, especially for Brazil, Mexico,
Nigeria, Indonesia, Yugoslavia and Rumania, which are
20.0 18.8 18.2 19.0
22.5 23.5 25.0 28.0 among the "big" debtors. Consequentthreat of these countries going bankrupt is beginning to loom.
The imperialist banks have begun to for regular debt rescheduling operations, with the weakest debtors one after the other being pushed into suspension of payments. tionably prolonged the 1980-1982 recession, by narrowing the "substitute markets" created during the preceding cycle.
However, little by little two substitute markets have emerged within the imperialist countries themselves. first is represented by increased military spending and a sharp rise in public debt in the West. The other is the growing indebtedness of a certain number of big imperialist firms, either to cover enormous losses or to finance large-scale speculative operations (4), notably mergers almost entirely financed by bank Imperialist firms in debt spiral
The growth in these debts has been quite as spectacular, if not more so, than the indebtedness of Posemi-industrialized Latin France's debt has risen in the space of a few years from 20 to 70 billion dollars. If the present rate of increase is maintained, it will soon overtake the debts of
The US public debt has reached the astronomical figure of 1.5 trillion dollars and threatens to go over 3 trillion dollars before the end of the decade, that is six times the total in 1960! The debts of big imperialist concerns have assumed proportions no less gargantuan. opinion became aware of this when it came to light that it was necessary to advance more than 6 billion dollars to the Continental Illinois Bank of Chicago in order to rescue it from a bankruptey that could have brought down the entire American credit system. For the first time, the US really came to the brink of a banking panic, much more so than at the time a Mexican debt moratorium was threatened in the fall of 1982.
It is interesting, moreover, to examine the origin of the near bankruptcy of the Continental Illinois Bank. contrary to a widespread myth, the with the tab of 200 million dollars, or equally speculative lending to the energy portfolio of the Penn Square Bank of Oklahoma City, which reached the figure
Big trusts operating at a loss (200 million dollars to the Dome Petroleum company of Canada; 200 million to International Harvester; 100 million to the Alfa group in Mexico; 40 million to Massey-Ferguson; 24 million to Branif Airlines). (6)