On Approaching the Pandemic-induced Pandemonium in World Stock Markets!
As the number of COVID-19 affected countries reaches 124 and death toll crossing 5400, governments all over the world have stepped up their efforts to contain the pandemic by curtailing cross-border trading, freezing economic transactions, banning travels, closing educational and research institutions, postponing major sporting events, business conferences, peoples’ gatherings and above all quarantining staff and people.
Imperialist countries now being the epicentre of this global pandemic, since the beginning of March 2020, stock markets the world over are experiencing the biggest crash since October 1987—much greater than that of 2008 global meltdown. Consequently, within two weeks of March 2020, the stock exchange crashes across the Americas, Europe, and Asia-Pacific have wiped out around $14 trillion (almost the same as the GDP of pre COVID-19 China) from world stock markets, even as the volatility is still continuing.
The Indian situation is still more serious. While the world economy in general has been going through some kind of a “boom”, India under Modi has been going through a well-defined multi-dimensional stagnation from 2014 onward. Since the ascendance of Modi.2, the situation worsened further as manifested in a constant shrinkage of the employment oriented productive sphere of the economy leading to the biggest downturn in 50 years coupled with unparalleled inequality and corruption.
While the productive economy was thus collapsing , on account of the unhindered propping up of financial parasitism and crony-capitalism by Modi regime, the Sensex that stood around 37000 in mid-2019 shot up to 42273 as on January 20, 2020 thereby ballooning the speculative bubble to its farthest limits. Corporate media and Sanghi intellectuals went on eulogising the sky-rocketing stock indices as indicators of India advancing towards the $5 trillion economy.
Today, however, being integrated with the COVID-19 battered world economy, by the morning of March 13, 2020, the Sensex has plunged by more than 30 percent to reach 29687 recording its biggest fall in history, though finally reaching around 34000 through intra-day recoveries later in the afternoon. The erosion of asset values from Indian stock market on account of this plunge including the biggest single-day loss of Rs. 11 lakh crore on March 13 is now estimated at around Rs.15 lakh crore.
Of course, COVID-19 is the immediate cause for the bursting of the bubble. However, an objective analysis will make it amply clear that this historic bubble-burst has been deeply rooted in the quarter century of neoliberal accumulation euphemistically called corporatisation (or financialisation). Its disastrous foundation can be traced to the series of pro-corporate initiatives including the so called “quantitative easing” that pumped trillions of dollars into the coffers of financial speculators by all neoliberal regimes aimed at ballooning the financial market since the world economic crisis of 2008. COVID-19 and the pandemonium created by ruling regimes everywhere now have again exposed the extreme vulnerability of this system based on parasitic speculation.
Even as the far-right and neo-fascist regimes in all continents are engaged in shifting the burden of this crisis on to the backs of the working class and oppressed peoples of the world in manifold ways, the corporate-saffron fascist Modi regime is also working overtime to save the corporate-speculators whose unhindered speculation itself is the root cause of Indian market crash. As a manifestation, when world crude oil price is at its historic low of around $30 a barrel (in mid-2014 when Modi ascended to the throne, the same was $115 a barrel!), Modi has again raised excise duty on petrol and diesel, thereby facilitating Aramco like foreign and Ambani like domestic oil speculators to continue with their corporate loot. Along with this, in the process of enabling the speculative barons to gobble up the national wealth, as YES bank fiasco has unraveled, Modi government is unleashing the speculative virus on the entire banking system.
The intention is to bail out the financial elite whose profit rates have gone down and to compensate them for losses on account of bubble burst, disruption in trade and supply chains. The outcome will be further sucking out of whatever remains in the arteries of toiling millions by the financial corporate class leading to unprecedented wealth concentration and inequality coupled with intensified pauperisation and loss of purchasing power for the vast majority. The fascist regime will manage the consequent political and social tensions by an intensification of its Hindu Rashtra project and through incessant attacks on democratic rights of workers and all oppressed including dalits, adivasis, women and minorities. It is up to the progressive-democratic forces in solidarity with the people to rise to the occasion to challenge this neoliberal logic based on proper clarity of thought and action.
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James PJ is with Kabeer Katlat.March 14 at 5:26 PM