While media coverage of Iran’s restrictions on passage through the Hormuz Straits focuses on fuel prices, partial closure is also disrupting crucial fertiliser and other supplies, risking catastrophe for billions worldwide.

Jomo Kwame Sundaram

Hormuz is not just a chokepoint on a shipping lane for oil and gas; it has strategic implications for fertiliser, helium, and other energy-intensive exports as well as for food and other imports to the region.

Higher energy costs affect most transportation and farming requirements, such as tilling and harvesting, as well as fertiliser supplies.

Wars, especially protracted ones, have lasting effects, including for agrifood systems. Without earlier investments, output elsewhere cannot be easily increased.

Alternative fertiliser supply sources are not readily available, especially as agro-ecological options have rarely been seriously pursued despite their proven viability.

As with renewable energy generation to reduce the need for petroleum imports, it is unclear whether the looming food crisis will accelerate the needed and feasible agro-ecological transition for enhanced food security.

Disrupted food supplies
Shipping delays and port congestion disrupt food supplies, trade and availability.

K Kuhaneetha Bai

Many states have recently tried to improve their food security, expanding strategic reserves, investing in food agriculture and alternative supply routes.

Such measures have improved resilience but cannot address a prolonged blockade of the Persian Gulf. About 70% of the food for Saudi Arabia, Iraq and the Gulf emirates passes through Hormuz.

Replacing disrupted food imports for about 100 million people would require moving almost 100 million kilograms (kg) of food into the region daily by other means.

Supplying food to the Gulf region under blockade would require an unprecedented operation, possibly through contested airspace.

In 2024, the UN World Food Programme delivered about 7 million kg of food daily to 81 million people in 71 countries.

Weather-driven food shortages and price spikes triggered political instability in 2008 and 2010-11. With food systems worldwide increasingly vulnerable to climate shocks, food insecurity threatens regimes everywhere.

Fertilisers
Farmers worldwide need stable supplies of fertilisers and fuel.

The Iran war threatens to disrupt these supplies, so crucial to agricultural production. Staple crops like wheat, rice and maize rely heavily on fertilisers.

Iran, Qatar, Saudi Arabia, the Emirates and Bahrain all ship petroleum products through Hormuz, including a fifth of the world’s liquefied natural gas (LNG).

As LNG is key to producing many fertilisers, Gulf exports have become more significant, especially after the war cut Ukraine’s exports, and China and Russia reduced theirs as well.

In 2024, the Middle East accounted for almost 30% of major fertiliser exports, including nitrogen, phosphate and potash.

The Gulf alone exported 23% of the world’s ammonia and 34% of its urea, while 30-40% of the world’s nitrogen fertiliser exports pass through Hormuz!

In mid-2025, Kpler estimated that a Hormuz closure could reduce fertiliser supplies by 33%, with sulphur-based ones falling by 44% and urea by 30%.

Reduced nitrogen-based fertiliser exports would hurt major food exporters such as Brazil, the US, Thailand, and India, all heavily reliant on fertiliser imports. However, the impact of shortages may be delayed until imported stocks run out.

As the war drags on, farmers may cut fertiliser use by planting less or switching to crops requiring less. Poorer harvests would, in turn, adversely affect later investment, planting and fertiliser use.

Who suffers most?
The economic consequences of the unprovoked US-Israeli assault on Iran and Tehran’s responses are spreading fast and catastrophically, especially for the most vulnerable.

Iran’s new leadership mistrusts Washington and will keep Hormuz closed – choking fuel, food, and fertiliser flows through it – to secure the guarantees it needs to reduce its vulnerability.

As attacks on Iran continued, Tehran stepped up targeted attacks on infrastructure in the Gulf kingdoms hosting US military facilities. US-led efforts have provided little relief to its allies.

The worldwide impact is uneven, with the poorest taking the brunt. Asia and Africa have been hard hit by heavy reliance on oil, gas, and fertiliser imports.

Rich nations’ aid cuts to increase military spending have worsened poverty and hunger for millions, many of whom are also victims of war and aggression.

Unlike the rich, many migrant workers in the Gulf who cannot leave will struggle to make ends meet and send money home to their families.

And as the world’s attention has turned to the Gulf, Israel has worsened conditions in Gaza while taking over southern Lebanon and increasing Yemen’s pain.

Concerned about retribution in November’s mid-term elections, the White House is keen on a ceasefire.

But it has not offered terms acceptable to Iran, which remains suspicious of the US commitment to its own promises, let alone the rule of law.

Hence, the Iranian leadership is unlikely to agree to a ceasefire without credible guarantees for its future security from renewed Israeli and US aggression.

The Iran war has highlighted, yet again, the collateral damage of war and the food system’s vulnerability. Meanwhile, the suffering of the more vulnerable is ignored by the greater powers, who pay little heed to their plight.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

In mid-1971, US President Nixon ended the dollar’s gold peg at $35 per ounce, triggering de-dollarisation. The 2025 gold and silver rush followed private speculators trying to profit from central banks hedging against perceived new risks.

Jomo Kwame Sundaram

Many believe OPEC was allowed to raise oil prices from 1972, on condition petroleum purchases would be settled in dollars. ‘Petrodollars’ were thus believed to be the ‘black gold’ underlying the dollar system’s survival after 1971.

Although still the dominant world reserve currency, the dollar’s role has gradually declined over the decades. Trump 2.0’s rhetoric and actions appear to have accelerated de-dollarisation.

Trump’s 2 April 2025 ‘Liberation Day’ tariffs announcement triggered even greater uncertainty and volatility in foreign exchange and other markets worldwide.

Greater policy unpredictability has caused governments and investors to explore new options. Authorities worldwide are considering and developing alternatives to the dollar system.

Besides higher inflation, Trump’s threats and actions, particularly his tariffs, sanctions and wars, have pushed investors to sell dollar assets and seek alternatives.

Various factors have significantly accelerated de-dollarisation. In the first half of 2025, the dollar fell by over 10%, its sharpest fall since the 1973 oil crisis.

K Kuhaneetha Bai

Geopolitical economy commentator Ben Norton highlighted an April 2025 note by the Deutsche Bank foreign exchange research head, noting:

“We are witnessing a simultaneous collapse in the price of all US assets [including stocks, foreign exchange, and bonds] … we are entering uncharted territory in the global financial system…

“The market is rapidly de-dollarising. In a typical crisis environment, the market would be hoarding dollar liquidity…The market has lost faith in US assets. They are actively selling down their US assets.

“US administration policy is encouraging a trend toward de-dollarisation to safeguard international investors from a weaponisation of dollar liquidity.”

Western confiscations
The weaponisation of central banks by the US, Europe, and their allies has caused other central banks to seek ‘safety’ by switching from dollar assets to gold.

Increased weaponisation of the dollar and Western confiscation of others’ assets under various pretexts have accelerated this trend.

Billions of dollars’ worth of Venezuelan central bank gold, held at the Bank of England, was confiscated by the UK government during the 2019 Washington-instigated Caracas coup attempt.

After the coup failed, the Bank of England refused to return the gold to Venezuela. Trust in Western governments and central banks thus continued to erode.

Similarly, the US Fed and European Central Bank confiscated over $300 billion worth of Russian dollar-, euro- and sterling-denominated assets after it invaded Ukraine.

European authorities have since pledged to transfer these Russian assets to Ukraine rather than return them to their owners.

Western confiscations of the central bank reserves of Iran, Venezuela, Afghanistan, Russia and others have alarmed authorities and publics worldwide.

Central banks’ reserve managers have increasingly viewed gold as safe despite greater volatility. Besides serving as a hedge, the precious metal also offered lucrative speculative gains.

Mitigating risk
Many monetary authorities have reversed their earlier accumulation of dollar-denominated US Treasury bills and bonds in their official reserves.

While US government debt has continued growing, inflationary pressures have mounted, albeit episodically. Gold and silver holdings are believed to help hedge against inflation and fiat currency debasement.

Gold holdings in central bank reserves increased significantly after the 2008-09 global, actually Western, financial crisis, followed by the Western turn to ‘quantitative easing’.

For the first time in three decades, central banks’ total gold holdings in their international reserves exceeded their US Treasury bond holdings in 2025.

About 36,200 tons, or a fifth of all gold holdings, is now held by central banks, rising rapidly over two years from 15% at the end of 2023!

Meanwhile, rising gold prices drew more speculative investments for profit. But such price spikes are not sustainable indefinitely.

Once gold was seen as overpriced, investors turned to other precious metals, notably silver, and other financial assets.

BRICS’ golden hedge?
After Lord Jim O’Neill identified Brazil, Russia, India and China as significant new financial powers outside the Western sphere of influence, BRICS was formed in 2009 by adding South Africa.

BRICS now has ten members and ten partners. Together, they account for 44% of world income, measured by purchasing power parity, and 56% of its people.

Russia, China, and India have been among the largest recent buyers of gold. Other major purchasers include Uzbekistan and Thailand, both BRICS partners.

Trump 2.0 has generated significant apprehension internationally. Without BRICS’ help, his weaponisation of economic policies and agreements has accelerated de-dollarisation.

Although Trump accuses the BRICS of conspiring to accelerate de-dollarisation, their precious metal purchases make sense as a hedge for their reserves.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

US Secretary of State Marco Rubio’s Munich speech last month seemed to seduce the European elite behind President Trump, against the ‘Rest’, especially the resource-rich Global South.

Jomo Kwame Sundaram

Billed as the world’s leading forum for international security, the conference programme made clear whose interests and security were prioritised.

In its first year, Trump 2.0 bombed ten nations, besides threatening aggression against four other Latin American nations, but none were represented at Munich!

The Munich conference shed all pretence of objectivity and diplomacy on Iran, applauding Israeli-led military intervention to overthrow the Islamic Republic.

German Chancellor Friedrich Merz emphasised the world’s return to great power competition after the post-Cold War ‘unipolar moment’, making his loyalty clear.

At Davos in January, Canadian Prime Minister Mark Carney noted that Trump 2.0’s geopolitical “rupture” had forced many to abandon earlier illusions.

Dangerous new trends have been emerging, hardly any ‘order’. Trump insists US supremacy must be even more dominant, isolating rather than confronting rivals.

K Kuhaneetha Bai

Trump’s predecessors’ ‘rules-based order’ had offered a legal and diplomatic fig leaf to subordinate other states to US supremacy.

Now, Washington repudiates the very framework it demanded others accept, instead of the ostensibly universal but sometimes inconvenient ‘rule of law’.

Instead of diplomatic and commercial negotiations, economic and military threats prevail. Without velvet gloves of soft power, the mailed fists of military force and economic weaponry are exposed.

Reuniting the West
Rubio welcomed this “new era in geopolitics”, urging better transatlantic relations while reiterating Trump 2.0’s demands for Europe to pay more, albeit more gently.

After the end of the Cold War, Samuel Huntington’s Clash of Civilizations urged defending the ‘Judaeo-Christian’ West against the ‘Rest’, including Catholic Latin America.

In Munich, Cuban-American Rubio reinvented himself as a White Christian European, warning his European audience that the West is under threat.

For Rubio, “the West had been expanding” to “settle new continents, build vast empires extending out across the globe” over the last five centuries.

His history obscured Western imperialism’s dispossession, exploitation and slaughter of indigenous peoples worldwide, especially in the Global South.

Praising the superiority of European civilisation and values, he lamented setbacks to these “great Western empires” due to “godless communist” and “anti-colonial” uprisings after the Second World War.

Rather than progress inspired by the 1776 US Declaration and War of Independence, for Rubio, national self-determination was a civilisational setback.

“We in America have no interest in being polite and orderly caretakers of the West’s managed decline”. For Rubio, no more ‘liberal’ human rights, freedom and democracy rhetoric.

He did not hesitate to invoke racist, white supremacist mythology and crusader ideology to demand stronger militaries to defend Western civilisation.

The renewed Western alliance will share their common civilisational identity, bound by “Christian faith, culture, heritage, language, ancestry”.

Ethno-chauvinistic beliefs about race, religion and culture are the new bases for solidarity and authority. ‘Defending Christians’ became the pretext for the US 2025 Christmas Day bombing of Nigeria.

Another Western century?
Rubio appealed for pan-European Western unity against multilateralism and other threats, calling for increased military spending and immigration controls.

He urged Europe to “take back control” of ‘Western’ industries and supply chains. After all, NATO allies have joined the US in seizing foreign assets at will.

Vassal-like and desperate for reassurance after a year of Trump’s blatant contempt and threats, the audience welcomed his speech with a standing ovation.

Fearing Washington might negotiate with Moscow over Ukraine without them, European leaders have intensified demands for all-out war against Russia.

Rubio is working to secure critical minerals supplies against “extortion from other powers”, including Europe, through opaque bilateral agreements secured with threats.

Trump 2.0 is making military threats for profit, including post-war ownership, mining and other rights. For many, NATO’s US-Europe divide is not over peace, but rather sharing Ukraine war costs and spoils.

While funding for European welfare states and other ‘social’ purposes continues to fall, military budgets continue to spike, as demanded by Trump.

Meanwhile, Merz has invoked military Keynesianism to justify Germany’s largest-ever military budget since the Cold War, aimed at strengthening NATO.

Ostensibly to strengthen national security, the Trump administration has cut social programmes. Instead, US military spending is being prioritised.

Meanwhile, the US Congress has shown support by approving a larger War Department budget than the Pentagon requested.

Armaments contracts have mainly benefited established companies, while the ‘tech bros’ increasingly supply newer weapons and related systems using artificial intelligence.

Following Trump, the European elites are strengthening their already powerful militaries and securing commercial deals for their own advantage, rather than defending the peaceful multilateral cooperation they once advocated.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

As US President Donald Trump pushes the world to war, arms spending has been rising worldwide. Wars secure more budgetary allocations, mainly benefiting the US-dominated military-industrial complex.

Jomo Kwame Sundaram

In 2024, the US accounted for over 36% of the world’s military spending of $2.7 trillion! This exceeded the total expenditure of the next nine biggest spenders – China, Russia, Germany, India, UK, Saudi Arabia, Ukraine, France, and Japan!

China’s military budget for 2025 was $250-300 billion. Most others are US allies who have pledged to increase war spending from under 2% of GDP to 5%!

The US and its allies will be even further ahead despite pushing friends and foes to spend more. Fortune magazine projects that US spending will exceed that of the next 35 highest-spending countries combined!

Despite its huge economic costs, the hike is being justified as helping to achieve ‘peace through strength’. After all, bombing ten nations in Trump 2.0’s first year did not incur any significant American military casualties.

Borrowing for war
Early this year, Dean Baker warned that President Trump was planning to increase annual military spending by $600 billion. Just under 2% of GDP, the spending increase would be massive.

K Kuhaneetha Bai

As Trump is more committed to cutting taxes than the US federal public debt, the “$600 billion increase in annual taxes would come to $6 trillion, roughly $45,000 per household” over the next decade.

The independent Committee for a Responsible Federal Budget projects federal debt for military spending will increase by $5.8 trillion over the next decade!

Trump has long promised to cut US public debt, which is already equivalent to 120% of annual output, and not to increase the deficit! But this would require massive tax increases, impossible to raise with tariffs alone.

Worse, federal government debt, which Trump promised to cut, will rise. Meanwhile, 94% of his Big Beautiful Bill (BBB) tax cuts benefit the top 60%, with only 1% trickling down to the poorest fifth.

The top fifth nominally gets 69%, but only the top 5% will actually pay less! The bottom 95% will pay more tax, with low-income households paying relatively more for tariffs!

Trump’s Department of Government Efficiency (DOGE), led by Elon Musk, was supposed to cut federal government fraud, waste, and debt, but instead cut US growth in 2025’s last quarter.

While the BBB cut $186 billion of food aid for poorer Americans, rising war spending will mainly benefit US military-industrial complex cronies.

US consumers will pay more
Increased tariff rates would have to be impossibly high. And these would need to be even higher if exemptions are granted. Imports would fall sharply with such high tariffs.

Trump claimed additional tariff revenue would cover half a trillion dollars of additional military spending. He has long claimed other countries pay for tariffs.

With deindustrialisation over the past half-century, consumers have been buying more imports, paying for most tariff revenue.

Imports would fall sharply with such high tariffs. As many imports are intermediate goods used in manufacturing, high tariffs would hurt the industries Trump is claiming to promote.

High tariffs will raise consumer prices sharply. Cost-of-living increases would be unaffordable to many, including in Trump’s political base.

Before the 20 February Supreme Court decision declaring them unconstitutional, the tariffs were only expected to raise $300 billion in the first year.

Revenue was expected to fall as consumers bought more domestically produced goods instead of imports.

As many intermediate goods for manufacturing are imported, higher tariffs would hurt the very industries Trump claims to be helping. Thus, high tariffs will sharply raise consumer prices for both imports and US-made substitutes.

Also, massively increasing military spending will divert resources, including labour, away from more productive uses.

Military industrial cronies
US military contracts mainly went to five corporate groups even before Trump 2.0. While projects are worth more, beneficiaries are fewer, reflecting lobbying efforts.

More government military spending is unlikely to increase jobs in the long run, as jobs have decreased drastically since the 1980s due to greater automation.

Military contractors pass the costs of R&D and capital expenditures onto taxpayers, freeing revenue to pay for cash dividends and stock buybacks.

In 2024, the Pentagon’s leading contractor, Lockheed Martin paid out $7 billion for stock buybacks and dividends.

Although Trump once offered to work with China and Russia to cut the trio’s military spending by half, it was difficult to take his offer seriously given his other pronouncements and actions.

US military spending will continue to rise, driven by the same interests and impulses behind the recent massive hikes.

Military expenditure needs wars to secure yet more allocations for buying more military equipment, to the beat of war drums.

The actual political and business relationships are complex and ever-changing. As Walter Scott observed in 1808:

Oh, what a tangled web we weave,
When first we practice to deceive

IPS UN Bureau

Follow @IPSNewsUNBureau
  

President Donald Trump has shaken up the world economy and the rule of international law in the first year of his second term – ostensibly to make America great again, particularly by reviving US manufacturing jobs.

Jomo Kwame Sundaram

Tariffs
Trump’s 2nd April 2025 Liberation Day tariffs were ostensibly his primary means for generating manufacturing employment.

When the US Supreme Court overruled him on 20 February, he responded by imposing a 10% tariff on all imports, raised to 15% the next day!

The tariffs are a blunt means for reviving US manufacturing jobs. The policy assumes US manufacturing jobs have been mainly lost due to what the White House deems ‘unfair’ competition from cheap imports.

Undoubtedly, US and other transnational corporations have relocated production and generally sourced imports from abroad to reduce import costs.

Imposing tariffs on imported goods to raise their prices is supposed to induce manufacturers to relocate production and jobs to the US.

Higher tariffs were imposed on countries with larger goods trade surpluses with the US. This ignores the services trade balance, generally more favourable to the US.

Tariff threats are now among the Trump administration’s choice weapons or means of economic coercion, including sanctions, to advance and secure its interests.

K Kuhaneetha Bai

But only $264 billion was collected during Trump 2.0’s first year, much higher than before, but still less than 1% of US federal debt.

Tariff revenue peaked in October 2025 at $31.35 billion, well below expectations, months before the Supreme Court decision.

The Kiel Institute for the World Economy found only 4% of tariffs ‘absorbed’ by foreign exporters losing some export earnings. US importers paid the 96% balance of $264 billion in tariffs, weakening the impact of Trump’s business tax cuts.

But Trump’s tariffs have not reduced the US trade deficit, not even for manufactures; this rose to $1 trillion in 2025, as $3.15 trillion in imports exceeded $2.15 trillion in exports.

Although mortgage and loan interest rates have not fallen, inflation continues. The additional tariff revenue would not even have covered the extra military budget Trump has promised.

Congress could have reclaimed its tariff authority, though the current Trump-dominated House of Representatives has not tried.

But with the November midterm elections looming, Forbes reported that the president’s disapproval rating rose to 55% in mid-February, as fewer are confident his administration prioritises curbing inflation.

Financialisation
The US federal debt, around $39 trillion, now requires over $1 trillion in annual debt servicing from the $7 trillion annual budget.

Growing by $1.5-2.0 trillion annually, this unrepayable debt is being ‘rolled over’ for ever-shorter maturities. Hedge funds now hold 27% of US Treasuries, while foreigners, who held half in 2015, now have only 30%.

Treasury bond repurchase – or repo – agreements provide about $4 trillion in financing daily for derivatives speculation. Another financial crash can wipe out many more trillions of often dubious ‘value’.

While the US economy, productive employment, and research funding diminish, various bubbles of unrepayable debt are growing rapidly. Worse, so-called stablecoins and cryptocurrencies have infiltrated financial markets.

Meanwhile, some US mortgage delinquency rates have reached levels worse than in 2007-08. By the end of 2025, financial news agencies were publishing ominous reports of financial vulnerabilities.

Hundreds of billions of promised investments, coerced from other nations using tariff and other threats, will be invested in US financial asset markets but little of this will create manufacturing jobs.

Manufacturing comeback
Trump has promised to make the US a manufacturing superpower once again, leading the world in technology, computing power and military weaponry. But China leads in many – if not most – areas of recent technological advancement.

Dean Baker found the US labour market weakening over Trump 2.0’s first year. Overall, and manufacturing jobs growth both declined from Biden’s last year.

US manufacturing jobs have long been threatened by transnational corporate globalisation and labour-saving technical change, especially automation.

US policy in recent decades has left the private sector responsible for ensuring US industrial technology leadership and progress. Meanwhile, problems, such as poor infrastructure, remain unaddressed.

Trump’s tariffs may also inadvertently reduce US jobs. Many industrial processes require imported parts, with the tariffs proving disruptive.

Trump’s policies have not created enough manufacturing jobs. The president fired his Labor Department’s statistics head in mid-2025 for not reporting enough job growth.

Nonetheless, it reported only 584,000 net new jobs for all of 2025, compared to 1.6 million in 2024, for the US labour force of 165 million!

The Wall Street Journal noted, “The manufacturing boom President Trump promised … is going in reverse”.

The Trump administration could still use the Supreme Court’s ruling to change its strategy to make America great again by drawing better lessons from US economic history and adopting a more pragmatic approach. But so far, it seems unlikely to do so.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Opinions have been divided over the annual UN climate conferences. While some see COP30 in Belém, Brazil, as confirming their irrelevance, others see it as a turning point in the struggle for climate justice.

Jomo Kwame Sundaram

As the world accelerates toward catastrophic warming, ecological systems are collapsing, and millions across the Global South face increasingly life-threatening situations.

Rising sea levels, extreme heat, droughts and flooding are undermining food security, displacing communities, and exacerbating inequality and living conditions.

The economic costs of climate disasters are accelerating. Social and human costs continue to rise, with lives, livelihoods and ecosystems destroyed.

Fiscal austerity and indebtedness are making things worse. Instead, governments increase military spending and subsidise fossil fuels, accelerating planetary warming.

Business interest in ‘green transitions’ focuses on new profit-making opportunities. As renewable energy grows, energy supplies increase as fossil fuels are slowly replaced.

COP of Truth?
In his opening speech to the thirtieth Conference of Parties (COP30) in Belém, host President Luiz Inácio Lula da Silva promised it would be the ‘COP of Truth’.

K Kuhaneetha Bai

Although not officially present, the US continued to frustrate the climate talks by urging petrostates to resist efforts to reduce reliance on fossil fuels.

The COP30 Climate Change Performance Index exposed governments’ weak commitments to combating planetary warming over the past 21 years.

Its report analysed the policies of 63 countries responsible for 90% of the world’s greenhouse gas (GHG) emissions.

The top three spots were kept empty to emphasise that no country has shown sufficient ambition to do so.

For 2025, Saudi Arabia took last place, with the US, Russia and Iran not far behind. Trump’s latest policies have set the US further back.

Meanwhile, the White House threatened sanctions and tariffs against governments that support a global tax on GHG emissions by international shipping.

Just transition?
COP30 in Belém continued to fail to achieve what is urgently needed: binding GHG emission cuts, phasing out fossil fuels, meaningfully compensating for past losses and damages, or better financing for climate adaptation.

COP30 adopted the Belém Mechanism for Just Global Transition – a new UNFCCC arrangement to overcome the fragmentation and inadequacy of such efforts worldwide.

However, the mechanism lacks both finances and plans to protect those harmed by decarbonisation initiatives. Nor are there resources for ‘green industrialisation’.

Climate justice is still misrepresented as threatening livelihoods rather than as key to survival. The climate justice movement must convince the public that it is key to social progress.

Climate finance setback
Lula appealed again for increased climate financing for the Global South following the dismal record since the 2009 Copenhagen COP.

Brazil also launched the Tropical Forests Forever Fund (TFFF) to incentivise countries conserving their forests. Although it failed to raise its target of $25 billion, 53 countries endorsed the TFFF, with pledges in Belém totalling $6.6 billion.

Belém also offered new suggestions for climate finance, in its ‘Baku to Belém (B2B) Roadmap to 1.3T’ (USD1.3 trillion), and the report of the COP30 Circle of Finance Ministers (CoFM).

The CoFM involved 35 finance ministers representing three-fifths of the world’s population and its GHG emissions.

The COP30 promise to “at least triple” finance for developing countries’ climate adaptation by 2035 was again blocked by the Global North. LDC requests for grant financing were also ignored yet again.

Promoting voluntarism
Brazilian COP30 chair Corrêa do Lago proposed various compromises to encourage those disappointed by UN processes to take climate action.

His proposed ‘voluntary roadmap’ to transition from fossil fuels will be discussed at the Colombia/Netherlands-led ‘coalition of the willing’ conference in April 2026.

The chair’s other voluntary roadmap for forest conservation followed the COP30 agreement’s failure to condemn deforestation with stronger language.

The adoption of the 59 compromise indicators for the Global Goal on Adaptation was delayed by poorer African countries’ inability to afford immediate implementation. The compromise was a two-year delay, referred to as the ‘Belém-Addis vision’.

Belém as turning point
For the first time, the US was officially absent from the Belém COP. With over 56,000 delegates registered, attendance was second only to Dubai, with more than 1,600 business lobbyists present.

COPs make slow progress by painstakingly extending the consensus for climate action. Belém may shift the COPs’ focus from negotiations to initiatives, a precedent which can be abused or advanced.

Belém’s Mutirão Decision (Action Agenda) focuses on delivery, drawing from the ‘whole of society’. Its 30 measurable Key Objectives were based on the 2023 Global Stocktake.

While Belém’s outcomes fell short of most expectations, many acknowledge Brazil did its best under trying circumstances. Nonetheless, climate justice is being denied by the continuing procrastination of powerful vested interests.

Although not quite the ‘COP of Truth’, inclusion and implementation that Lula promised, Belém reversed the backward slide of recent COPs, which the Global South must build upon before it is too late.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

The new US National Security Strategy (NSS) repositions the superpower’s role in the world. Hence, foreign policy will be mainly driven by considerations of ‘making America great again’ (MAGA).

Jomo Kwame Sundaram

Quietly released on December 4, it is certainly not an easily forgettable update of long-established positions, cloaked in obscure bureaucratic and diplomatic parlance.

Mainly drafted under the leadership of ‘neo-con’ Secretary of State and National Security Adviser Marco Rubio, it is already seen as the most significant document of Trump 2.0.

It asserts, “The days of the United States propping up the entire world order like Atlas are over.” Instead, foreign policy should now prioritise advancing US interests.

New priorities
The NSS implies the US will no longer be the world’s policeman. Instead, it will exercise power selectively, prioritising transactional rather than strategic considerations.

It emphasises economic strength as key to national security, rebuilding industrial capacity, securing supply chains and ensuring the US never relies on others for critical materials.

K Kuhaneetha Bai

The NSS is ostensibly based on MAGA considerations involving immigration control, hemispheric dominance, and cultural ethno-chauvinism.

Mainstream commentators complain it lacks the supposedly enlightened values underlying foreign policy in the US-dominated world order after the Second World War.

They complain the new NSS is narrow in focus, redefining interests, and sharing power. Its stance and tone are said to be more 19th-century than 21st-century.

Besides pragmatic imperatives, mixed messages may be due to unsatisfactory compromises among rival factions in Trump’s administration.

MAGA foreign policy
Long-term observers see the NSS as unprecedented and blatantly ideological.

White supremacist ideology influences not only national cultural politics but also foreign policy. The NSS unapologetically promotes Judaeo-Christian chauvinism despite the constitutional separation of church from state.

MAGA’s ‘America First’ priority is evident throughout. Border security is crucial as immigration is deemed the primary national security concern.

For Samuel Huntington, immigration threatens the US by making it less WASP (White Anglo-Saxon Protestant).

The NSS blames social and economic breakdown on immigration. Inflows into the Western Hemisphere, not just the US, must be urgently stopped by all available means.

Ironically, the US has long been a nation of immigrants, with relatively more immigrants than any European country. Its non-white numbers are almost equal to whites.

Trump’s neocolonial interpretation of the 1823 Monroe Doctrine emphasises the Americas as the new foreign policy priority.

Foreign rivals must not be allowed to acquire strategic assets, ports, mines, or infrastructure in Latin America and the Caribbean, mainly to keep China out.

Trump’s NSS prioritises the Western Hemisphere, with Asia second. Africa receives three paragraphs, primarily for its minerals.

Europe is downgraded to third, due to its ostensible immigration-induced civilizational decline. Surprisingly, the NSS urges halting North Atlantic Treaty Organisation (NATO) expansion.

China near peer!
The NSS policy on China is widely viewed as unexpectedly restrained. China remains a priority, but is no longer its primary antagonist; it is now a peer competitor.

Now, the US must rebalance its economic relationship with China based on mutually beneficial reciprocity, fairness, and the resurgence of US manufacturing.

The US will continue to work with allies to limit China’s growth and technological progress. However, China is allowed to develop green technologies due to US disinterest.

Meanwhile, US hawks have ensured a military ‘overmatch’ for Taiwan. The NSS emphasises Taiwan’s centrality to Indo-Pacific security and world chip production.

The NSS warns China would gain access to the Second Island Chain if it captured Taiwan, reshaping regional power and threatening vital US trade routes.

With allied support, the US military will seek to contain China within the First Island Chain. However, Taiwan fears US support will wane after TSMC chip production moves to the US.

The NSS expects the ‘Quad’ of the US, Australia, Japan and India to enhance Indo-Pacific security. For Washington, only India can balance China in Asia, and is hence crucial to contain China in the long term.

Regional reordering
The NSS also downgrades the Middle East (ME). Conditions that once made the region important have changed.

The ME’s importance stemmed from its petroleum and Western guilt over Israel. Now, the US has become a significant oil and gas exporter.

Critically, the US strike on Iran in mid-2025 is believed to have set back Tehran’s nuclear programme.

The ME seems unlikely to continue to drive US strategic planning as it has over the last half-century. For the US, the region is now expected to be a major investor.

As US foreign policy is redefined, the world worries. The ME has been downgraded as Latin America has become the new frontline region.

Much has happened in less than a year of Trump 2.0, with little clear or consistent pattern of continuity or change from his first term. But policies have also been quickly reversed or revised.

While the NSS is undoubtedly important and indicative, it would be presumptuous to think it will actually determine policy over the next three years, or even in the very near future.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Although inequality among countries still accounts for a far greater share of income inequality worldwide than national-level inequalities, discussions of inequality continue to focus on the latter.

Jomo Kwame Sundaram

South Africa (SA) and Brazil, the previous G20 host, have long had the world’s highest national-level inequalities. However, their current governments have led progressive initiatives for the Global South.

Although due to take over the G20 presidency next year, US President Trump refused to participate in this year’s summit, inter alia, because of alleged SA oppression of its White minority.

Inequality growing faster
The G20 report utilises various measures to show the widening gap between the rich and the poor.

National-level inequality is widespread: 83% of countries, with 90% of the world’s population, have high Gini coefficients of income inequality above 40%.

While income inequality worldwide is very high, with a Gini coefficient of 61%, it has declined slightly since 2000, primarily due to China’s economic growth.

K Kuhaneetha Bai

Meanwhile, wealth concentration has continued. Wealth inequality is even greater than income inequality, with the richest 10% owning 74% of the world’s assets.

The average wealth of the richest 1% grew by $1.3 million from 2000, accounting for 41% of new wealth by 2024! Private wealth has risen sharply since 2000, while public assets have declined.

Besides income and wealth, the report reviews other inequalities, including health, education, employment, housing, environmental vulnerability, and even political voice.

Such inequalities, involving class, gender, ethnicity, and geography, often ‘intersect’. The promise of equal opportunity is rarely meaningful, as most enjoy limited social mobility options.

The report thus serves as the most comprehensive and accessible review of various dimensions of economic inequality available.

Harmful effects
The G20 report condemns ‘extreme inequality’ for its adverse economic, political, and social consequences.

Inadequate income typically means hunger, poor nutrition and healthcare. Economies underperform, unable to realise their actual potential.

Inequality, including power imbalances, influences resource allocation. Such disparities enhance the incomes of the rich, often at the expense of working people.

Natural resources typically enrich owners while undermining environmental sustainability and social well-being.

The report argues that economic inequality inevitably involves political disparities, as the rich are better able to buy influence.

New rules and policies favour the rich and powerful, increasing inequalities and undermining national and worldwide economic performance.

High inequality, due to rules favouring the wealthy, also undermines public trust in institutions. The declining influence of the middle class threatens both economic and political stability, especially in the West.

Drivers of inequality
The report argues that public policy can address inequalities by influencing how market incomes are initially distributed and how taxes and transfers redistribute them.

Market income distribution is determined by asset distribution (mediated by finance, skills, and social networks) and among labour, capital, and rents. Returns to shareholders are prioritised over other claims.

Increased inequality in recent decades is attributed to weakened equalising policies, or ‘equilibrating forces’, and stronger ‘disequilibrating forces’, including wealth inheritance.

New economic policies over recent decades have favoured the wealthy by weakening labour via market deregulation and restricting trade unions.

Tax systems have become less progressive with the shift from direct to indirect taxes, lowering taxes paid by large corporations and the wealthy. Fiscal austerity has exacerbated the situation, especially for the vulnerable.

Financial deregulation has also generated more instability, triggering crises, with ‘resolution’ usually favouring the influential.

Privatisation of public services has also favoured the well-connected, at the expense of the public, consumers, and labour.

International governance
International economic and legal institutions have also shaped inequality.

More international trade and capital mobility have lowered wages, increased income disparities and job insecurity, and weakened workers’ bargaining power.

Liberalising financial flows has favoured wealthy creditors over debtors, worsening financial volatility and sovereign debt crises.

International inequalities have adverse cross-border effects, especially for the environment and public health. Overconsumption and higher greenhouse gas emissions by the rich significantly worsen planetary heating.

International health inequalities have been worsened by stronger transnational intellectual property rights and increased profits at the expense of poorer countries.

International tax agreements have enabled the wealthy, including transnational corporations, to pay less than those less fortunate. Meanwhile, Oxfam reported that the top one per cent in the Global North drained the South at a rate of $30 million per hour.

Inaction despite consensus?
The report claims a new analytical consensus that inequality is detrimental to economic progress, and reducing inequality is better for the economy.

Inequality is attributed to policy choices reflecting moral choices and economic trade-offs. It argues that combating inequality is both desirable and feasible.

Recent research from the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) has criticised growing national inequalities.

However, there is no evidence of serious efforts by the G20, IMF, and OECD to reduce inequalities, especially inter-country, particularly between North and South.

IPS UN Bureau

Follow @IPSNewsUNBureau
  

Opposition to data centres (DCs) has been rapidly spreading internationally due to their fast-growing resource demands. DCs have been proliferating quickly, driven by the popularity of artificial intelligence (AI).

Jomo Kwame Sundaram

In October 2024, McKinsey projected that global energy demand by DCs would rise between 19% and 22% annually through 2030, reaching an annual demand between 171 and 219 gigawatts.

This greatly exceeds the “current demand of 60 GW”. “To avoid a [supply] deficit, at least twice the [DC] capacity built since 2000 would have to be built in less than a quarter of the time”!

As tech companies are not paying for the additional energy generation capacity, consumers and host governments are, whether they benefit from AI or not.

As DCs increasingly faced growing pushback in the North, developers have turned to developing countries, outsourcing problems to poorer nations with limited resources.

Understanding these energy- and water-guzzling facilities is necessary to better protect economies, societies, communities, and their environments.

Energy needs
With growing corporate and consumer demand for AI, DC growth will continue, and even occasionally accelerate.

K Kuhaneetha Bai

As demand for AI and DCs increases, supporting computers will require significantly more electricity. This will generate heat, needing the use of water and energy for cooling. Much energy used by DCs, from 38% to 50%, is for cooling.

Electricity generation, whether from fossil fuels or nuclear fission, requires more cooling than renewable energy sources such as photovoltaic solar panels or wind turbines.

A small-scale DC with 500 to 2,000 servers consumes one to five megawatts (MW). For tech giants, a ‘hyperscale’ DC, hosting tens of thousands of servers, consumes 20 to over 100MW, like a small city!

Data centres not cool
As the popular focus is on DCs’ enormous energy requirements, their massive water needs to cool equipment tend to be ignored, understated and overlooked.

Locating new DCs in developing countries will further heat local microclimates and the planetary atmosphere. Worse still, heat is more environmentally threatening in the tropics, where ambient temperatures are higher.

Establishing more DCs will inevitably crowd out existing and other possible uses of freshwater supplies, besides reducing local groundwater aquifers.

Unsurprisingly, DC investors rarely warn host governments about the amount of locally supplied energy and water required.

DCs require much freshwater to cool servers and routers. In 2023, Google alone used almost 23 billion litres to cool DCs. In cooling systems using evaporation, cold water is used to absorb severe heat, releasing steam into the atmosphere.

Closed-loop cooling systems absorb heat using piped-in water, while air-cooled chillers cool down hot water. Cooled water recirculated for cooling requires less water but more energy to chill hot water.

Investors expect subsidies
Like other prospective investors, DCs have relocated to areas where host governments have been more generous and less demanding.

Led by US President Trump’s powerful ‘tech bros’, many foreign investors have profited from subsidised energy, cheap land and water, and other special incentives.

Prospective host governments compete to offer tax and other incentives, such as subsidised energy and water, to attract foreign direct investment in DCs.

The US pressured Malaysia and Thailand to stop Chinese firms from using them as an “export-control backdoor” for its AI chips. Washington alleges that DCs outside China buy chips to train its AI for military purposes. So far, only Malaysia has complied.

This limits Chinese firms’ access to such chips. Washington claims that Chinese substitutes for US-made chips are inferior and seeks to protect US technology from China.

High-tech DC jobs?
Data centres are emerging everywhere, but not many jobs will be created. Advocates claim DCs will provide high-tech jobs.

DCs are largely self-operating, requiring minimal human intervention, except for maintenance, which they determine independently. Thus, job creation is minimised.

Construction and installation work will be temporary, with most managerial functions being performed remotely from headquarters. A Georgetown University report estimates only 27% of DC jobs are ‘technical’.

While the DC discourse mainly focuses on foreign investments, there is little discussion on growing national desires for data sovereignty.

Acceding to so many foreign requests will inevitably block national capacity ambitions to develop end-to-end DC capabilities and not just host them.

Thus far, there is limited interest in the ‘afterlife’ of DCs, such as what happens after they have outlived their purpose, or the disposal of waste materials.

Higher energy and water costs, subsidies, tax incentives and other problems caused by DCs are hardly offset by their modest employment and other benefits.

IPS UN Bureau

Follow @IPSNewsUNBureau