Apr 20, 2020
Translated from Lutte Ouvrière (Workers’ Struggle), the newspaper of the revolutionary workers’ group active in France.
The deepening crisis takes many forms for third world countries. Prices of raw materials are falling. The wealthy are moving their investments out of these countries. Cash stopped flowing in. Interest rates are rising for governments to borrow money.
World oil prices have fallen by half since the year began. This creates a disaster for oil producing countries, whose revenues from selling crude oil often make up the biggest part of their government budgets. Africa’s most populous country is Nigeria, which gets half its revenue from oil.
The price of sugar dropped by a third in just over a month. The price of coffee fell by almost that much since December. The price of copper dropped by almost a fifth since January. All countries that live by exporting raw materials—minerals or agricultural—are on their knees.
At the same time, the big bourgeoisie and the big banks move masses of their capital out to the imperialist countries, which they consider safer. Every time an economic crisis spreads worldwide, they do the same. But this time capital is fleeing the underdeveloped countries even faster than during the 2008 crisis.
These countries’ currencies are collapsing. The South African rand and the Brazilian real have lost 30% of their value against the dollar, and the Mexican peso lost 25%.
The credit rating agencies recognized these collapses by downgrading South Africa, Angola, Nigeria and Mexico. This only adds fuel to the fire. Now these governments have to pay more to borrow, at the same time that their revenues have melted away. Eighty-five countries have asked for help from the IMF—twice as many as in 2008.
These countries are often called “emerging.” It is more accurate to say they are sinking. Their populations are too, stricken twice by the pandemic and by the madness of capitalism.