Credit: Connie France/AFP

By Inés M. Pousadela
MONTEVIDEO, Uruguay, Jul 3 2026 (IPS)

Right-wing candidate Keiko Fujimori has won Peru’s presidential runoff, narrowly defeating leftist Roberto Sánchez to become the country’s ninth president in a decade. She inherits a system so engineered for dysfunction that rather than making compromises, she may decide the concentration of power is her only means of survival. The constitution that created this trap was written by her father.

A system built to fail

Keiko, daughter of authoritarian former president Alberto Fujimori, has finally succeeded in her fourth consecutive runoff, having lost in 2011, 2016 and 2021. She won with a margin of roughly a quarter of a percentage point over a candidate who is a close ally of jailed former president Pedro Castillo. Both sides alleged fraud, filed claims and sent their supporters onto the streets.

Peru is often described as a democracy without parties. The party system disintegrated in the 1990s and was never rebuilt. In its place came a sequence of improvised candidacies and personal electoral vehicles that rise and fall with their founders. For the first-round vote on 12 April, the largest ballot paper in Peru’s history listed 35 candidates. Fujimori came first with just 17.19 per cent. Ultimately, most Peruvians didn’t vote for either candidate who made the runoff. A president elected on that basis has a mandate so weak that rivals can dispute it from day one, and they do.

Congressional seats scatter across dozens of parties, none of which dominates. But parties can combine to reach the two-thirds threshold needed to invoke a constitutional clause to impeach and remove a president on the grounds of ‘permanent moral incapacity’, a mechanism Peru’s constitution leaves deliberately vague. The Congress elected in 2021 removed three presidents in one term.

Authoritarian incentives

The constitutional mechanism that enables political instability is the reason Fujimori’s presidency could be dangerous. As she enters office with a razor-thin margin and no congressional majority, she faces an immediate strategic choice. She can seek compromise with her opponents, but this might signal that the threat of impeachment works, inviting it. Or she can move to concentrate power and weaken the institutions that constrain the executive, denying her opponents the tools they could use to remove her.

Everything points towards the second option. Most presidents recently removed by Congress were, at the time of their removal, attempting to govern within the rules, and the rules were weaponised against them. Pedro Castillo tried a different approach, dissolving Congress pre-emptively to forestall his impeachment. He was immediately arrested and removed. A politician who has watched this dynamic consume eight predecessors might conclude that the only way to survive is to change the game.

Keiko’s father ruled Peru from 1990 to 2000 as an elected president who progressively dismantled the institutions that constrained him. Two years into his first term, citing the simultaneous crises of hyperinflation and insurgency, he dissolved Congress and suspended the constitution. The emergency was real, but it was also an opportunity. Fujimori rewrote the constitution to entrench executive power, won re-election in 1995 and then won a fraud-tainted third term before being forced from office within months. His government became synonymous with grand corruption and human rights atrocities, including the forced sterilisation of over 272,000 mostly Indigenous women. After he was forced out in 2000, he was convicted of homicide and kidnapping, and imprisoned.

The constitution Alberto Fujimori wrote to entrench his power is still in force. The moral incapacity clause that the 1993 constitution retained – useful to Fujimori when he controlled Congress – has become the primary weapon congressional majorities have used to remove president after president. The most significant recent constitutional change, the reinstatement of a two-chamber Congress, may end up increasing congressional power. This is the system Keiko now has to deal with.

The costs of dysfunction

Peru’s dysfunction has long been sustained by a comforting fiction: that while politics is chaotic, the economy runs itself. Macro fundamentals have remained relatively stable. Inflation in 2025 ran at around 1.5 per cent, and the economy grew 3.4 per cent in 2024. But economic growth has roughly halved over a decade of turmoil. Poverty, at 27.6 per cent in 2024, remains above pre-pandemic levels. Homicides stand at 10.7 per 100,000 people, alongside an epidemic of extortion.

Freedoms are deteriorating and those who protest pay the highest price. In 2025, attempts to change the pension system triggered Gen Z-led protests that quickly expressed broader anger at corruption, insecurity and political dysfunction. Security forces responded with violence. In December 2024, the CIVICUS Monitor, which tracks civic space conditions globally, downgraded Peru to repressed status, its second-worst rating, citing years of escalating state violence and the systematic harassment of human rights defenders and journalists, who political figures routinely smear as terrorists and traitors.

In March 2025, Congress passed a law giving the Peruvian Agency for International Cooperation extensive powers to control, censor and persecute civil society organisations that receive foreign funding, threatening fines of up to US$720,000 and criminalising any use of foreign funds to support legal action against the Peruvian state. It is, in effect, a law against accountability.

Danger ahead

Keiko Fujimori ran a law-and-order campaign under the slogan ‘Fujimori returns, order returns’, casting the fight against organised crime as a sequel to her father’s 1990s war against insurgency and promising mass deployments of police and military forces. Her party championed a 2025 amnesty law shielding security forces and civilian armed groups from prosecution for disappearances, killings and torture during that conflict, in direct defiance of the Inter-American Court of Human Rights. Keiko has been evasive about her father’s atrocities and has recast human rights as a matter of access to basic services rather than accountability for past abuses. Her record offers no grounds for optimism about civic space or democratic norms.

Keiko’s father justified breaking the rules that constrained him by pointing to insurgency and economic collapse. Keiko faces no insurgency and no hyperinflation, so if she moves to concentrate power, she will have to find her own justification, perhaps in a crime wave, a security emergency or a conspiracy of her enemies. The Fujimorist playbook could come back with a vengeance.

Inés M. Pousadela is CIVICUS Head of Research and Analysis, co-director and writer for CIVICUS Lens and co-author of the State of Civil Society Report. She is also a Professor of Comparative Politics at Universidad ORT Uruguay.

For interviews or more information, please contact research@civicus.org

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The report - Military Escalation in the Middle East: Cushioning the Global Shock – reveals that low- and middle-income countries have partially protected their populations from soaring oil prices through fossil fuel subsidies, price caps, tax rebates and demand-management measures. Credit: UNDP

By UN Development Programme
NEW YORK, Jul 1 2026 (IPS)

Developing countries’ efforts to tackle the ongoing effects of conflict in the Middle East carry a high price that leaves little room for critical investments in education, health and other development priorities, according to a new report by the UN Development Programme (UNDP) released today.

The report – Military Escalation in the Middle East: Cushioning the Global Shock – reveals that low- and middle-income countries have partially protected their populations from soaring oil prices through fossil fuel subsidies, price caps, tax rebates and demand-management measures.

Fossil fuel subsidies, which had been on a downward trend globally, are on track to reach US$1.1 trillion in 2026 – US$ 410 billion more than in 2025, assuming the current average oil price settles at US$88.6 per barrel.

This projection climbs to as much as US$1.43 trillion in a ‘severe’ scenario where oil prices climb to an average of US$110 per barrel.

The UNDP report warns that while fossil fuel subsidies provide temporary relief, they ultimately undermine climate and development goals, locking countries into high-carbon pathways and limiting future investment.

“The global spillover of the Middle East conflict is profound and potentially long-lasting. Developing countries, many already struggling with debt, have temporarily managed to protect people from the worst of the energy shock,” said UNDP Administrator Alexander De Croo. “These countries are doing everything they can, but there is a hidden cost. To deal with today’s crisis, governments are postponing tomorrow’s investments. Money that should be building schools, hospitals, and clean energy systems is being used simply to keep economies afloat. Without international support, these countries won’t escape the shock. They are absorbing it at the expense of future growth.”

Close to half of the world’s poorest countries are already either ‘in’ or at ‘high risk’ of debt distress, and debt continues to crowd out development spending at an increasing rate, according to the report.

This year, it is estimated that the median developing economy will spend 9.53 percent of total government revenue on interest payments alone – double the share of a decade ago and the highest level seen in 25 years.

Averaged over the three-year period 2024 to 2026, 55 developing economies are estimated to pay more than 10 percent of revenue in interest payments, compared to 32 countries a decade ago.

“No country should have to sacrifice its future development to manage a crisis it did not create,” said De Croo. “First, we must unlock multilateral liquidity in ways that are easy to access for low and middle-income countries. Second, we must accelerate investment in renewable energy. Every clean energy investment reduces exposure to future shocks. The crisis has made one thing clear: energy security and the energy transition are no longer separate agendas. They are one and the same.”

The report is being launched in the context of the Hamburg Sustainability Conference (HSC) taking place this week. The HSC is an annual high-level meeting that aims to foster new partnerships and collective action by global policymakers, private sector leaders, academia experts, and civil society representatives. The annual event is a joint initiative of the German Federal Ministry for Economic Cooperation and Development (BMZ), the United Nations Development Programme (UNDP), the Free and Hanseatic City of Hamburg and the Michael Otto Foundation.

Full report
The full report is available online at https://www.undp.org/publications/military-escalation-middle-east-cushioning-global-shock

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Excerpt:

The UN Peacebuilding Commission Celebrates 20 Years of UN Peacebuilding Architecture. Credit: UN Photo/Eskinder Debebe

By Oritro Karim
UNITED NATIONS, Jul 1 2026 (IPS)

From June 22 to 26, the United Nations (UN) commemorated its first annual Peacebuilding Week, marking the 20th anniversary of the UN Peacebuilding Commission’s inaugural session. Featuring discussions among world leaders, policymakers, civil society, and advocates, the event explored how collaboration among governments, international organizations, and the private sector can enhance the visibility and effectiveness of peacebuilding efforts worldwide.

The goals of the Peacebuilding Week are particularly critical today, as increasing geopolitical tensions fracture international cooperation and severe financing shortfalls deplete resources, hindering relief efforts for civilians trapped in conflict. Despite a historic surge in active armed conflicts worldwide recorded over the past two years, peacebuilding and relief funding suffered a severe 40 percent decline between 2024 and 2025, leaving millions of people around the globe in a state of extreme insecurity.

“Peace does not occur automatically. It is built through persistent diplomacy, collective action and political will,” said Annalena Baerbock, President of the UN General Assembly. “Wars that never happen because of peacebuilding, conflict-prevention or sustainable-development efforts rarely make headlines. Yet, like everything else, peacebuilding is only possible when properly resourced.”

On June 26, the Peacebuilding Impact Hub—part of the Peacebuilding and Peace Support Office (PBPSO) within the UN Departments of Political and Peacebuilding Affairs and Peace Operations (DPPA-DPO)—launched its inaugural Peacebuilding Overview, titled Investing in Peace When the World Pays for War. This report analyzes data gathered from governments, civil society, scholars, and UN field operations across numerous, diverse contexts.

By addressing the root causes of conflict and encouraging the implementation of digital technologies—alongside active participation from youth and the private sector—the report aims to forge new paths for peacebuilding that are resilient, inclusive, and globally supported. Aiming to identify structural gaps in data sharing that prevent vital information from being shared internationally and from being fully utilized by policymakers and the public, the report was launched alongside a side event titled Building Peace in a Changing World.

At the event, Paul Fargues, one of the report’s authors and a Political Affairs Officer for the UN Department for Political and Peacebuilding Affairs (DPPA), told reporters that the world is currently at a “crossroads, where conflict is on the rise, good governance is declining, and civic space is shrinking.” He noted that this is compounded by severe budget cuts and disproportionate investment in military expenditure rather than civilian protection and prevention efforts, making humanitarian relief operations increasingly difficult.

According to the report, over the last two decades, the world has invested only one dollar in peacebuilding efforts for every 100 dollars spent on military expenditure. Fargues added that the world’s most vulnerable populations are projected to suffer the most, particularly in dire contexts where aid constitutes more than 60 percent of all external funding and acts as a vital lifeline. Additionally, the DDPA found that roughly two-thirds of the countries whose economies are most dependent on UN aid are also the ones most adversely affected by the funding cuts.

Fargues argued that some of the central obstacles in advancing peacebuilding efforts today are the persistent structural gaps in the dissemination of evidence and data, which is critically underdeveloped when compared to the development and humanitarian sectors.

“Peacebuilding has no underlying framework to create shared data practices, to generate insights at the global level to enhance evidence-based decision-making, or simply to communicate its value to broader non-technical audiences,” Fargues said. “Peacebuilders and those who support them must do a better job at measuring, proving, and communicating this. Given the incredibly challenging contexts, producing more robust data and evidence of impact is a bare minimum.”

Katherina Ahrendts, the Director-General for Global Order, United Nations and Humanitarian Assistance of the Federal Foreign Office of Germany, stated that although the case for investing in protection and prevention efforts is clear, political and financial contributions lag significantly behind. According to figures from the International Monetary Fund (IMF), for every dollar invested in preventive macroeconomic policies, up to 103 dollars could be generated in returns. DPPA also estimated that with adequate investment in prevention and protection measures, humanitarian needs could be reduced by approximately USD 3.6 billion annually.

Despite these potential gains, the economic case for peacebuilding efforts has not sufficiently influenced global investment priorities.“We are indeed at a critical moment when violent conflict is increasing while budgets are under strain and multilateralism as a whole is increasingly challenged,” said Ahrendts. “From a domestic policy standpoint, we need a much stronger business case, more compelling narratives, and better evidence. We need to showcase that peacebuilding is a smart, strategic, and cost-effective instrument that prevents much higher costs later on.”

“This means framing peacebuilding not only as a moral imperative, but as a matter of security, stability, mutual interests and sound investments. In particular, we need to make clear that peacebuilding and investment are an integral component of an effective security strategy,” she added.

Ana Escobar, the UN Representative for Peace Direct, an organization that empowers local peacebuilding efforts and supports community-driven approaches, remarked that peacebuilding must be grounded in a community-based approach and tailored to match the specific needs of vulnerable communities. Peace Direct defines meaningful impact as seeing communities become safer and more resilient long after external support has ceased.

Rather than implementing a pre-established peacebuilding agenda, Peace Direct works with local peacebuilders and community leaders to define what success looks like to them and identify the changes that they want to see. “That means asking different questions,” Escobar said. “Are communities resolving disputes without violence, and how do we measure that? Do women, youth, and marginalized groups have greater influence in decision-making? Is trust increasing between communities and institutions?”

“Peacebuilding is most effective when power, resources, and evidence flow in the same direction, towards the communities that live with conflict every day…. For local peacebuilders, prevention means that children go to school instead of joining armed groups, farmers return to their lands, markets reopen, women move safely, families remain together. Those are the returns communities measure every day,” added Escobar.

Dr. Cedric De Coning, a Senior Researcher in the Peace, Conflict and Development Research Group at the Norwegian Institute of International Affairs (NUPI), underscored the importance of adaptive peacebuilding. This approach calls for the continuous monitoring of data and updating of peacebuilding measures, acknowledging that a community’s dynamics are constantly shifting. Rather than framing peacebuilding as a rigid structure being “built”, Dr. De Coning argues that it is more of a continuous process that is “nurtured”.

“What adaptive peacebuilding says is that we cannot know that beforehand; it has to emerge from people affected by conflict or people in societies struggling to achieve peace themselves,” said Dr. De Coning.

“As peacebuilders, we have to accompany these societies, and we have to learn together with them constantly and adapt our understanding of what it is that we can support. But we should be careful not to measure peace as something that only makes sense for donor-funded projects…. Peace is something much broader, and we need to measure that broader social transformation: how societies are experiencing peace, how they are living the things they look at, is what we need to look at rather than measuring projects to please donors.”

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Leadership of the Global South has gradually declined since the 1980s. Many hope BRICS+ will fill the vacuum, but its purpose and membership suggest such hopes may be misplaced. A repurposed Non-Aligned Movement (NAM) offers the best way forward.

Jomo Kwame Sundaram

In 1964, developing countries formed the G77 caucus and created the UN Conference for Trade and Development (UNCTAD) within the UN system.

In 1974, the UN General Assembly called for a New International Economic Order (NIEO) after President Nixon ended the 1944 Bretton Woods international monetary system in 1971.

In 1979, the US Fed responded to Western stagflation by sharply raising interest rates. This triggered fiscal and sovereign debt crises in Latin America and Africa, forcing many to seek IMF emergency funds to cope.

Meanwhile, the Thatcher-Reagan-inspired counter-revolution against Keynesian and development economics led to ‘neoliberal’ Washington Consensus policy reforms, deepening economic contraction.

At New York’s Plaza Hotel, the US got its G7 caucus of the world’s 7 largest allied economies to address its overvalued dollar by requiring the currencies of Japan and Germany to appreciate sharply.

Nurina Malek

With its legitimacy at stake following the East Asian, Russian, and other financial crises of 1997-99, G7 finance ministers agreed in 1999 to create a more inclusive G20 grouping of finance ministers of the world’s 20 largest economies.

Soon after the 2008 global (actually Western) financial crisis began, the first G20 leaders’ summit convened in the White House in November 2008.

Making BRICS
‘BRICs’ was coined in late 2001 by then-Goldman Sachs Global Economic Research head Jim O’Neill, referring to Brazil, Russia, India, and China.

Ostensibly to include Africa, the BRICs invited South Africa to join, creating BRICS as a coalition of the five more independent large ‘emerging market’ economies.

Also serving as a caucus within the G20, BRICS has tried to improve international monetary and financial relations. It has since admitted more nations into an expanded BRICS+ with two tiers of affiliation.

To be sure, neither BRICS nor BRICS+ was ever intended to represent the even more diverse interests of the entire Global South. Understandably, it serves its ‘financially significant’ developing economy members.

BRICS and the South
The BRICS promise a world less dominated by the rich and powerful nations of the Global North, mainly in the West.

The world has been dominated by the US since the end of WW2, and especially after the first Cold War. Despite occasional dissent, the US’s European NATO allies seem happy playing second fiddle.

Many developing countries have long felt that existing arrangements do not serve their best interests. The BRICS seem to offer some ‘voice’ and alternative bases for international economic cooperation.

BRICS has undoubtedly strengthened the Global South’s voice and developed new arrangements to support developing country interests, especially to finance development.

The BRICS have also advocated on specific international issues for the Global South. All five BRICS countries have also led developing-country groupings on specific issues with varying degrees of success.

Unsurprisingly, many developing countries appreciate the BRICS role in such matters, with some choosing to publicly align with and even affiliate with it.

However, the BRICS expansion into BRICS+ is unlikely to resolve many problems faced by developing nations due to international power asymmetries and imbalances.

Potential and problems
The diversity of the Global South complicates any grouping’s claim to represent it.

BRICS+ brings together countries with very different political and economic systems, priorities and aspirations, including development goals and interests.

This diversity enhances BRICS’ broad appeal but also makes it difficult to ensure it becomes an effective platform consistently advocating all developing nations’ interests.

This challenge becomes more apparent when the interests and ambitions of weaker developing countries are compared with those of the major BRICS+ powers.

Many vulnerable nations are preoccupied with food security, structural change, deindustrialisation, environmental sustainability, planetary heating, and financialization.

Meanwhile, BRICS members seek to pursue their own strategic interests, garner finance and investments, boost their exports and increase their influence internationally.

Such objectives are not inherently contradictory, but rarely fully aligned. This makes it more difficult to pursue shared interests, advocate collectively, and sustain cooperation.

BRICS+ membership by invitation also limits its effective accountability to the Global South. It is unrealistic to expect BRICS+ to consistently advocate for the full range of concerns of all developing countries, especially the poorest and least influential.

The Global South should undoubtedly try to benefit from the economic weight and voice of BRICS+. But it can best advance its shared interests with its own voice and organised strength via a revived NAM, repurposed for peace, development and justice.

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As of now, geopolitics overtook trade policy uncertainty as the primary concern for countries. Credit: Unsplash / Sajimon Sahadevan

By Maximilian Malawista
UNITED NATIONS, Jun 25 2026 (IPS)

Amidst increased geopolitical tensions, the risk of volatile energy markets, trade corridors, and regional stability in the Middle East has garnered more attention than trade policy in terms of its power to alter the global economy, according to new findings from the United Nations Conference on Trade and Development (UNCTAD).

In their report on trade and development, “Global Economy Faces a Geopolitical Challenge”, UNCTAD says that a protracted escalation “raises the likelihood of deeper disruptions in global trade and finance, potentially, foreshadowing a cascading crisis”.

Credit: UN Conference on Trade and Development (Trade and Development Foresights 2026)

Daily crude oil prices in the Middle East since the beginning of the conflict have risen from around USD 60-70, to a fluctuating rate between a high of over USD 110-. With oil prices surging more than 60 percent, and gas doubling in price, many markets have been left in an inflating scenario as higher energy prices increase macroeconomic pressure and overall slow and contract the economy.

The increase per barrel is largely due to a constriction of supply, where most Gulf economies can barely output oil due to a lack of transport ability through the strait of Hormuz. The International Monetary Fund (IMF) records a spike in the price of Brent crude rising over USD 100 per barrel and remaining at elevated levels, with European gas also jumping roughly “60 percent amid disruptions to LNG exports”.

The numbers are impacted by an estimated loss of capacity of 10 million barrels per day of oil and “about 500 million cubic meters per day of natural gas”. This is roughly 10 percent of global oil production, and roughly 5 percent of global natural gas production for every single day.

The IMF records the following:

Daily Traffic through the Strait of Hormuz (in number of vessels) between 26 February and 6 April 2026. Credit: IMF

Oil being an inelastic good means that consumers won’t be able to curb their spending. Rather, they have to pay more for as long as the conflict lasts as fuels are needed for many essential routine tasks, from driving your car, to taking your vitamins, to growing your food, and having your Amazon packages shipped.

In their April 2026 Regional Economic Outlook Update for the Middle East and Central Asia, the IMF details that a continued conflict will likely for every 10 percent rise in the average oil price lead to a loss of about 0.5 percent of GDP and an inflation increase of around 1 percent in Gulf economies, ultimately affecting global markets heavily.

As the report notes, “Longer trade disruptions or greater damage to oil production capacity raises the possibility of higher and more sustained oil prices and a larger risk premium than is currently embedded in oil futures prices”.

However, for developing countries higher energy prices hit a lot harder to consumers in developing countries, which in this case don’t have the same money to spare. The IMF warns that “Low-income countries and other fragile and conflict-affected states in the MENAP region are especially vulnerable to higher energy, fertilizer, and food prices”.

Due to the conflict, estimates stand that vulnerable economies, mostly least developed countries (16.1 billion) and small island developing states (4.3 billion), could incur a USD 20 billion a year increase in spending, representing a huge composition of their GDP expenditure.

Among least-developed nations, Mauritania is recorded to have their bill increase by 7.3 percent, The Gambia 6.3 percent, Burkina Faso 5.0 percent, Liberia and Zambia 4.3 percent, with 17 other least developed countries also estimating to increase their spending by at least 0.5 percent in terms of GDP points.

Similarly for small-island developing states, Vanuatu is recorded to have an increase of 5.8 percent, Maldives 5.2 percent, Tonga 4.4 percent, Mauritius 4.2 percent, and Fiji 3.2 percent, with 18 other small developing states recording an increase of at least 0.6%.

UNCTAD also expects this conflict to take away capital investment into developing nations, as these assets are perceived as riskier. The UNCTAD report states that “the start of the Middle East conflict triggered a sell-off of developing countries’ assets, with equity markets of emerging markets sliding by more than 12 per cent between 28 February and 29 March.” Likely such effects will trigger a compacting of issues, contributing to an economic downturn that could take years to recover from depending on the length of the conflict.

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June 27-28 is the 16th Social Business Day, observed in Savar (Dhaka) Bangladesh. In June 2024 at the Western Sydney University’s graduation ceremony where I was conferred Emeritus Professor status, I urged the new business graduates to:

• purge the world of the… obnoxious Friedmanite idea that is destroying our planet and tearing our communities apart;
• look instead to the “Social Business Model” of Bangladesh’s Nobel Laureate Muhammad Yunus; and
• work on the right side of history; stand up for justice and liberation; spread the “moral violence” for peace; and put people and the planet before profit.

Anis Chowdhury

In his 1970 article for The New York Times, Nobel Laureate Milton Friedman wrote, “the social responsibility of business is to increase its profits”. He further argued, “There are no ‘social’ values, no ‘social’ responsibilities in any sense other than the shared values and responsibilities of individuals. Society is a collection of individuals and of the various groups they voluntarily form”.

This Friedmanite world view has been at the core of the neo-liberal counter revolution led by Ronald Reagan and Margarette Thatcher in the 1980s. In his inaugural speech, Reagan famously declared, “government is not the solution to our problem; government is the problem”, and ushered in an era driven by unrestrained individual pursuits of profit.

Promoting unrestrained individualism, Thatcher questioned, “who is society?” Then she dismissed, “There is no such thing! There are individual men and women and there are families…”.

“Greed” became the all-consuming passion at the height of unrestrained individual pursuit of profit as captured famously in the 1987 movie, Wall Street. The lead character, Gordon Gekko (played by Michael Douglas) addressing the shareholders said:

“The point is, ladies and gentlemen, that greed – for lack of a better word – is good.
Greed is right.
Greed works.
Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.
Greed, in all of its forms – greed for life, for money, for love, knowledge – has marked the upward surge of mankind”.

Has it?

Has greed, in all forms, marked the upward surge of mankind?

Yes, global income and wealth increased manifold since the 1980s; but so did global inequality. The wealth and income gaps between the wealthiest and the poorest have widened. The richest 1.5% own almost 48% of the world’s wealth, according to the UBS Global Wealth Report 2025, while the poorest 40% own only 0.5%.

The World Inequality Report 2026 reveals an even starker wealth gap. The wealthiest 0.001%, comprising around 56,000 multi-millionaires, now hold three times more wealth than the bottom half of the world population. Their share has grown steadily from 3.7% in 1995 to 6.1% in 2025. According to the UBS Global Wealth Report 2025, as of 2023, the world’s 26 richest billionaires owned a shocking US$2.872 trillion in wealth, which is greater than many nations’ total goods and services (GDP).

Cheerleaders of unrestrained greed may dismiss these facts and say “so what? Global abject poverty has also declined”. In fact, economist and historian Deirdre McCloskey, the author of Bourgeois Dignity: Why Economists Can’t Explain the Modern World, floated the idea of “Great Enrichment” asserting that real per capita incomes in the developed world have surged by a factor of 10 to 30 (or roughly 2,900%) since 1800. She argues this historic explosion of wealth fundamentally benefited the poor and working classes. For her, the concerns about inequality are a result of insatiable envy.

Some others have described the phenomenon of rising inequality amidst the wealth boom as “inclusive” because the process has lifted millions from abject poverty. According to them, rapid globalization has given rise to a new global wealth middle class. They see this as progress!

They also decry “the perception that billionaires make money for themselves at the expense of the wider population”, and attribute billionaires’ fortunes to successful investments, while highlight philanthropy and patronage of the arts, culture and sports by billionaires.

But the cheerleaders ignore billionaires’ tax evasion and tax avoidance, and the fact that societies should not rely on the generosity of the rich.

The cheerleaders are also climate deniers. They ignore the overwhelming scientific evidence linking rising inequality and the climate crisis. The world’s wealthiest 10% has caused two thirds of global warming since 1990, according to a new study published in Nature. It also reports that the top 1% of the wealthiest individuals globally contributed 26 times the global average to increases in monthly 1-in-100-year heat extremes globally and 17 times more to Amazon droughts.

It’s time for change

It is time for a paradigm shift from profit to people and the planet. Social business, a concept first introduced by Nobel Peace Prize Laureate Muhammad Yunus, offers a path forward. In his 2009 book, Creating a World Without Poverty: Social Business and the Future of Capitalism, Professor Yunus defines a social business as “A business:

• Created and designed to address social problems
• A non-loss, non-dividend company, i.e.
1. It is financially self-sustainable and
2. Profits realised by the business are reinvested in the business itself (or used to start other social businesses), with the aim of increasing social impact, for example expanding the company’s reach, improving the products or services or subsidising the social mission.”

In short, a social business is oriented to social value creation. It is designed to address specific social or environmental problems such as hunger, poverty, unemployment, pollution, and climate adaptation and mitigation. In many ways, it is a hybrid between a traditional business and a non-profit organisation. Like a traditional business, a social business generates revenue and is financially self-sufficient rather than relying on philanthropy. However, like a non-profit organisation, the primary goal of a social business is NOT profit, but social or environmental impacts.

But, not a magic bullet

Social business is not a panacea for all evils or social-environmental problems. More fundamentally, systemic or structural social and environmental issues should not be treated as market opportunities. The framing of social problems as technical or managerial issues that can be solved with “business” solutions can obscure underlying structural causes like systemic discrimination and power imbalances which must be addressed through deep reforms, backed by political will.

There also is a risk of “impact-washing”, much like “greenwashing”. That is, weak regulatory standards can allow companies to cherry-pick metrics, exaggerate their societal benefits, or use their social status as “moral licensing” to justify otherwise dubious business practices.

Therefore, the “euphoria” of celebration must not distract us from the urgent need to develop proper monitoring and accountability frameworks for social business so that “greed” does not infest it.

Anis Chowdhury, Emeritus Professor, Western Sydney University (Australia). He held senior UN positions in Bangkok and New York and served as Special Assistant to the Chief Advisor for Finance (with the status and rank of State Minister) in the Professor Yunus-led Interim Government. Anis has written extensively on macroeconomic issues, sustainable development, international financial architecture and political economy. E-mail: anis.z.chowdhury@gmail.com; a.chowdhury@westernsydney.edu.au

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A local farmer harvests sorghum produced from seeds donated by the Food and Agriculture Organization (FAO) through the “Improving Seeds” project. Credit: FAO/Fred Noy

By Maximilian Malawista
UNITED NATIONS, Jun 23 2026 (IPS)

Armed conflict, economic shocks, and climate pressures are driving worsening food insecurity across many of the world’s most vulnerable regions, according to the latest Hunger Hotspots report outlook for June-November 2026, jointly released by the World Food Programme (WFP) and the Food and Agriculture Organization (FAO).

The report analyzes 13 hunger hotspots where acute food insecurity is expected to worsen through 2026, with Yemen, Palestine, Sudan, South Sudan, Somalia, Nigeria and Haiti among the areas of highest concern. Conflict remains the primary driver of food insecurity in 12 of the 13 hotspots identified in the report.

The report found that in the past five years conflict levels have doubled, with one in six people worldwide being exposed to armed violence in 2025. It identified 117.3 million people as being forcibly displaced as of 2025, severely overwhelming host communities and deepening food insecurity.

The report also warns that famine risks are persisting in multiple locations. Sudan was identified as facing one of the world’s most severe food crises, while famine risks were also identified in Yemen, Gaza, South Sudan, and Somalia. The report also elevated Nigeria and Somalia to the highest point of concern due to deterioration of projections that large parts of their populations could face catastrophic levels of food insecurity through the outlook period. Nigeria is projected to have the largest number of people facing high levels of acute food insecurity among all the identified hotspots, at approximately 34.8 million people affected.

Beyond conflict the main driver of food insecurity, economic and supply chain pressures are compounding, developing new vulnerabilities. At the report’s launch on June 18, representatives from WFP and FAO warned that disruptions to global trade routes can further worsen food insecurity. According to FAO officials, nearly one-quarter of global oil supplies and one-third of the global fertilizer trade pass through the Strait of Hormuz, meaning disruptions can hike fuel prices, transportation and insurance costs, and fertilizer. The FAO says these cascading effects can increase cost of humanitarian operations, raise food prices, and delay delivery of assistance to those who are already undergoing acute food insecurity. For households with already extremely low purchasing power, and humanitarian organizations with a continuously stressed budget, an increase in these factors can have severe consequences.

WFP and FAO warn the climate risks are also mounting, mentioning El Nino’s capabilities of producing uneven rainfall patterns, which could disrupt local agricultural production across multiple vulnerable regions.

While this happens, humanitarian organizations are being further constricted with fewer resources to respond with. According to WFP and FAO, funding to humanitarian groups declined by an estimated 59 percent between 2022 and 2025, which are levels seen last in 2016-2017. During the same period, the share of the population facing high levels of acute food insecurity has doubled, meaning with less than half the funding, humanitarian groups have to deal with double the amount of people in need, as compared to funding and food insecurity levels in 2016-2017. This combination of shrinking aid and rising food insecurity forces humanitarian groups to scale back assistance, despite growing needs.

Responding to a question from Inter Press Service regarding supply chain disruptions, and risk prevention, Rein Paulsen, FAO Director of the Office of Emergencies and Resilience argued that strengthening local food production is part of the solution, also adding that an investment of USD 17.7 million resulted in “the production of some 515 million US dollars’ worth of food in Sudan.” He added that in some contexts, millet production has helped hundreds of thousands of households, despite conflict and disruptions to supply chains. “Greater emphasis on local production is part of the answer,” Paulsen said.

According to FAO figures cited by Paulsen, the millet production program generated roughly USD 29 worth of food production for every dollar invested. The WFP and FAO have stressed that many modern famines are preventable and foreseeable, warning that sustained funding, humanitarian access and early intervention remain critical to preventing food insecurity from escalating into catastrophe.

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A two-year-old girl suffering from malnutrition is fed by her mother at their shelter in Cox’s Bazar, Bangladesh. Credit: UNICEF/Ilvy Njiokiktjien

By Oritro Karim
UNITED NATIONS, Jun 22 2026 (IPS)

Nearly nine years after the violent persecution of the Rohingya minority population in Myanmar and the following mass exodus of refugees, over 1.2 million Rohingya currently reside in neighbouring Bangladesh, where they face immense challenges. With the United Nations (UN) recording significant shortfalls in global humanitarian funding, alongside Bangladesh’s diminishing ability to support these populations, experts warn of a deepening humanitarian crisis.

Described by the UN as “the most persecuted minority in the world,” Rohingya refugees experience a state of statelessness, where they are not legally recognized as citizens by any country and lack legal rights. The vast majority of Rohingya refugees in Bangladesh reside in the densely populated camps of Cox’s Bazar, where they face widespread insecurity and systemic gaps in access to basic services, such as healthcare, education, food, and clean water.

Since early 2024, the UN has recorded an influx of over 150,000 Rohingya refugees into Bangladesh, placing immense pressure on the already overcrowded camps. Domestic resources in Bangladesh are also severely strained as the nation struggles to support these displaced populations while simultaneously sustaining its own citizens.

“Bangladesh has shown extraordinary generosity in hosting this highly vulnerable population, and we are deeply grateful to our donors who have continued to stay the course. Their sustained support remains a lifeline for refugees,” said Rania Dagash-Kamara, Assistant Executive Director for Partnerships and Innovation at the UN World Food Programme (WFP).

“But humanitarian assistance is not the end goal. Rohingya refugees want to return home to Myanmar when they can do so safely, voluntarily, and with dignity. We must continue to help create these conditions; we cannot let this crisis be forgotten,” she added.

According to the Office of the United Nations High Commissioner for Refugees (UNHCR), from 2017 to the end of 2025, the international community has contributed approximately USD 5.42 billion to humanitarian responses to the Rohingya crisis, allowing Bangladesh to sustain its refugee camps and expand access to education, health, and protection services. In May this year, UNHCR, in collaboration with the Government of Bangladesh, launched an appeal for USD 710.5 million to address the most urgent needs of Rohingya refugees and host communities.

Despite the vast and increasing scale of needs, this appeal marks a 26 percent decline compared to 2025, reflecting the UN’s strategy of prioritizing response efforts for the most vulnerable populations and acute needs. Humanitarian funds have largely been exhausted—a direct result of rampant insecurity, further displacement from conflict within Myanmar, and major budget cuts from historically large donors like the U.S.

These shortfalls have significantly compromised humanitarian responses, leaving thousands out of reach of essential services. This is particularly dire for the Rohingya refugees in Bangladesh, as the vast majority are largely dependent on shrinking humanitarian aid for survival. According to UNHCR, in 2025 roughly 35 percent of households relied entirely on humanitarian food assistance, 42 percent earned income through temporary and unstable means, and 23 percent earned income through cash-for-work-based humanitarian programs.

With Rohingya refugees in Bangladesh lacking any form of sustainable income, UN experts project that they could lose “precious gains” in the coming months and years if a safe, voluntary, and dignified return to Myanmar is not established. Limited economic opportunities and reduced humanitarian aid have devastated Rohingya households, leaving many to embark on dangerous voyages in search of better conditions in the region.

2025 marked the deadliest year on record for these voyages, with UNHCR recording nearly 900 Rohingya refugees missing or dead in the Andaman Sea and Bay of Bengal. Over 6,500 Rohingya refugees attempted these voyages that year, with roughly one in seven reported missing or dead–the highest mortality rate for any refugee or migrant sea journeys in the world. The first half of 2026 marked a continuation of this trend, with over 2,800 Rohingya undertaking these dangerous voyages, with over half of them being women and children.

Additionally, persistent cuts to humanitarian funding have significantly strained food rations across the camps in Bangladesh, leaving hundreds of thousands facing acute food insecurity. In April, WFP introduced a tiered, needs-based food assistance approach for Rohingya refugees in Bangladesh, distributing as much as UD 12 per person per month for extremely food-insecure households in Cox’s Bazar, with less insecure households receiving anywhere from $7 to $10.

WFP stated that even at the lowest transfer value, the minimum allotment is sufficient to meet basic food needs. Additionally, the agency cited that this approach was not driven by declining funding but rather by the need for prioritization and equity.

“This alignment reflects our continued commitment to the entire Rohingya community. We will still provide food assistance for everyone in the camps but will target the highest levels of support for those who need it most,” said Simone Parchment, WFP Country Director.

Local representatives and the Rohingya community in Bangladesh have expressed dissatisfaction with this tiered approach, expressing concern that lowered rations at this pivotal time could have deadly consequences for the population and spur further insecurity. Mohammad Mizanur Rahman, Bangladesh’s Refugee Relief and Repatriation Commissioner, told reporters in April that “law and order will be deteriorated”, as the Rohingya attempt to flee the camps in search of food and work opportunities.

Additionally, UNHCR states that reduced humanitarian funding will disproportionately affect women and girls, disabled persons, and older refugees in the Cox’s Bazar camps. An overwhelming lack of critical protection services has led to a rise in rates of gender-based violence, armed group violence, exploitation, and kidnappings.

Furthermore, due to the collapse of healthcare responses for refugees in Cox’s Bazar, alongside persistent overcrowding and a lack of access to clean water, these populations are at a heightened risk of contracting infectious diseases. According to the International Rescue Committee (IRC), as of April 28, there has been a major measles outbreak, which has devastated Rohingya refugee camps and spread across 58 of Bangladesh’s 64 districts.

The IRC has reported over 34,600 suspected cases, including 200 confirmed deaths. Strained health systems and shrinking aid have left thousands of refugee children in the camps without access to routine vaccinations and urgent medical interventions.

“This outbreak is a direct consequence of years of strain on the health system in Bangladesh and caused by lack of resources to meet the needs of local communities and a growing refugee population,” said Hasina Rahman, IRC Bangladesh Director and Asia Deputy Director.

“It is critical that the international community scales up funding for the humanitarian response in Bangladesh to enable the sustained investment in primary healthcare, immunization infrastructure and community health workers.”

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US President Trump’s policies are supposed to make America great again (MAGA), which means different things to various parties. Some of its consequences are inadvertent, including undermining dollar dominance and inducing stagflation worldwide.

Jomo Kwame Sundaram

The US held 70% of the world’s gold reserves at the time, with gold priced at $35 per ounce. Other central banks bought and held US Treasury bonds and similar dollar assets as liquidity reserves.

This effectively made the US dollar the primary means of payment in the post-war international monetary system. The exchange rates of other national currencies were all set against the dollar.

As other economies recovered post-war, the US current account and trade surplus declined. Until 1971, the International Monetary Fund (IMF) occasionally adjusted fixed exchange rates for ‘structural’ balance-of-payments deficits or surpluses.

Exorbitant privilege
This dollar-based international monetary system gave the US what France’s Gaullist leadership called an ‘exorbitant [economic] privilege’.

Under the Bretton Woods arrangements, the US would never face balance-of-payments problems, as it paid for imports with its own currency, which it could print at will.

Nurina Malek

Foreign central banks soon became accustomed to holding US Treasury bonds as official reserves, effectively funding the large and growing federal debt.

Such foreign central bank demand kept the dollar strong in foreign exchange markets. Persistent capital inflows into the US have kept the dollar overvalued.

The strong dollar has boosted domestic consumption of imports, depressed exports, widened trade deficits, and kept consumer price inflation in check.

In 1960, Robert Triffin warned the US Congress about the inevitable problems that arise when a national currency is also used as an international reserve currency.

He urged the US Federal Reserve Bank (Fed) to consider the dollar’s international role when making domestic monetary policy.

In August 1971, President Richard Nixon unilaterally ended the US Bretton Woods commitment to redeem dollars with gold. Thus, the dollar clearly became a fiat currency, with exchange rates shaped by market confidence.

Protection through diversification
After the 2009 Great Recession, Western central banks kept nominal interest rates low for over a decade through coordinated ‘quantitative easing’ (QE).

Low interest rates were maintained for over a decade through the 2020-21 Covid-19 recession before the Fed raised interest rates from 2022, ostensibly to address inflationary pressures.

Borrowers worldwide were thus induced to take on more debt. Governments, corporations, and households borrowed more, increasing accumulated debt.

International payment obligations are increasingly being settled by other means. Gradually, dollar-based arrangements are co-existing with euro- and renminbi-based arrangements and BRICS-initiated alternatives.

Thus, US indebtedness and stagnation have been growing with inflationary pressures. Unsurprisingly, other monetary authorities’ previous preference for holding US Treasury bills as official reserves has declined.

Instead, official reserves have been increasingly diversified to include more gold holdings ostensibly to help hedge against inflation and currency debasement.

About 36,200 tonnes, a fifth of all gold holdings, are now held by central banks, up from 15% at the end of 2023. By 2025, non-US central bank gold holdings exceeded their US Treasury bonds for the first time this century!

Trump 2.0
Criticism of the dollar system has resurfaced from time to time, especially as Washington weaponises more financial instruments and arrangements.

The second Trump administration has threatened major US federal government creditors, including China and longtime allies such as Japan and the Gulf monarchies.

As loyal allies are bullied, many are quietly moving away from prevailing dollar-based international monetary and financial arrangements, which have long been preferred for convenience.

After bombing ten nations in the first year of Trump 2.0, US military spending has been rising rapidly, especially with the Iran war and many of its consequences likely to be protracted despite the promise of a ceasefire.

With international confidence in the US consistently undermined by unexpected unilateral White House initiatives, governments are trying to reduce their vulnerabilities, especially by diversifying their reserve assets.

But unlike early in his first term, Trump now welcomes a weaker dollar as “great”. His ongoing efforts to lower Fed interest rates also reflect successive US presidents’ refusal to address ever-larger federal fiscal deficits over the decades.

With inflation rising, market premiums over Fed interest rates are pushing up commercial rates. These hurt the real economy, employment, and banks, many struggling with rising defaults.

All this exacerbates financial ‘market corrections’ in the US and beyond. Trump-induced international disruptions are worsening instability and slowing economies worldwide.

Trump’s policies have slowed the world economy, including the US. With efforts to address the Hormuz crisis undermined by Israel, his legacy will now surely include having induced the first major stagflation in almost half a century.

IPS UN Bureau

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The World Bank considers corruption a major obstacle to eradicating global poverty. The Bank officially has a zero-tolerance policy against fraud and corruption in its projects. Concerned with widespread corruption in Bangladesh, the Bank and the Government agreed on the Governance-oriented Country Assistance Strategy (GCAS) in 2006 and the Bank’s subsequent Country Partnership Strategy (CPS) ostensibly has been more selective on governance and anti-corruption (GAC) issues. Ironically, however, the Bank’s funding enables corruption. The Bank’s recent decision to advance a US$350 million loan allegedly for enhancing energy security is a glaring example.

Anis Chowdhury

The Interim Government’s White Paper on the state of the economy documented the extent of collusion and corruption in the energy sector. It noted the authoritarian kleptocratic government’s inflated demand forecast, disregarding professional projections. Thus, the installed capacity hugely exceeds actual demand. Against the peak summer demand of approximately 17,000 MW, the installed capacity is nearly 32,000 MW (or 30,000 MW considering aging infrastructure). According to the White paper, this artificially “increased capacity was driven by unscrupulous motivations” to benefit the regime’s cronies who formed a monopoly cartel in the power sector.

A series of dodgy moves facilitated unprecedented misappropriation of public money in the sector. The first was the awarding of contracts to 17 private rental plants through ‘negotiation’ in 2010, circumventing the Public Procurement Rules. The second was the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010, which protected energy contracts from competitive bidding and legal challenges. Such indemnity is a license for corruption, facilitating unchecked project approvals and non-transparent often dollar-denominated Power Purchase Agreements.

These agreements enabled the purchase of electricity from furnace-oil-based plants at prices 40-50% above market rates and from gas-fired plants at prices 45% above market rates, according to the Interim Government’s review committee. Initially established for a four-year period to address an emergency supply situation, the arrangement has been extended multiple times, allowing the cronies to be paid an exorbitant excess capacity charge.

The estimated total excess capacity/rental payment to the private sector from 2010-11 to 2023-24 was approximately US$2.93 billion. In the 2024-25 fiscal year alone the capacity charge was approximately US$3.42 billion, while nearly 63% of installed electricity generation capacity remained idle. According to the review committee, an estimated excess generation capacity of roughly 7,700 to 9,500 MW is causing an additional annual expenditure of US$900 million to US$1.5 billion in capacity payments.

The White Paper estimated that the rental power plants made as high as 35% profit against a standard 15%! The private sector power companies received payments from the government as rent for power plants under the guise of power purchase agreements, where corruption, rather than electricity supply, was the main objective.

Most of the operational private power plants in Bangladesh are owned/controlled by a group of five cronies. They control country’s power sector to loot vast amounts of money. While the kleptocratic regime beat the drum of “self-sufficiency” in electricity, its cronies were pillaging the state coffer.

While the cronies enjoyed excess profits through extraordinary corrupt practices, consumers paid the price. Electricity prices were increased 12 times at the wholesale level and 14 times at the retail level over 15 years during the kleptocratic regime, ostensibly to reduce losses and subsidy requirements. But neither losses nor subsidies declined.

The review committee recommended that contracts containing evidence of corruption should be cancelled immediately. It also recommended renegotiation of high-cost and unequal power purchase agreements to revise and convert them to a “take-and-pay” model following Pakistan’s example.

Instead of taking these recommended measures, the current government has chosen the path of the kleptocratic regime’s looting model. The decision to hike the electricity price will protect the fatty pockets of cronies at the expense of the common people.

The World Bank’s role

The Bank has been a prime advocate of privatisation of Bangladesh’s energy sector, citing widespread corruption and inefficiency of the publicly-owned power sector. It pushed for “unbundling” vertically integrated state monopolies, facilitating Independent Power Producers (IPPs), and mobilising private capital through financial guarantees – a strategy that supposedly should improve energy security and at the same time ease public fiscal burden.

The Bank has been providing loans ostensibly to help Bangladesh improve its energy security. But that has made the country heavily reliant on imported Liquefied Natural Gas (LNG) and fossil fuels and has locked Bangladesh into steep capacity payments, draining foreign exchange reserves. Thus, the Bank’s loans allegedly for ensuring energy sector security have created a vicious circle of debt burden and plunder of public coffer through hefty capacity payments.

Instead of further advancing loans of US$350 million, the Bank should have told the government to implement the recommendations of the Interim Government’s review committee; i.e., cancel the unscrupulous agreements with IPPs and stop fiscal bleeding through unfair capacity payments. The savings from the capacity charges would have been more than enough to pay for the imports of LNG without incurring additional debt burden.

The Bank’s anti-corruption record

Why does the Bank advance loans to the sector riddled with widespread corruption? The Bank’s anti-corruption record is at best disappointing globally. The Bank once took a firm anti-corruption stance in Bangladesh when it pulled out of the Padma Bridge project alleging corruption. But it scrambled to recover its lost ground when other lenders with strategic interests came forward to fill the gap.

Evaluating the Bank’s engagement in Bangladesh during 2011-2020, the World Bank’s own Independent Evaluation Group concluded, “Despite a trend of deterioration in the country’s institutional quality and economic management, the Bank Group significantly increased financing to Bangladesh over the review period, making Bangladesh one of the largest borrowers”.

As a lending agency, the Bank’s existence depends on debtor countries’ borrowings, regardless of its lofty ideals, such as poverty reduction. A fundamental flaw in the international aid system: “the donors are more desperate to give than the recipients are to receive”. Therefore, the Bank takes a “pragmatic” approach, and tolerates corruption.

Then why did the Bank declare zero-tolerance policy against corruption? Perhaps this is because it has to satisfy the public anti-corruption sentiment in creditor nations; their citizens do not want to see their tax dollars being misappropriated.

Renowned political economist, Robert Wade conceptualises this as gesturing to appease creditor governments while acting to the contrary to appease borrower governments. Thus, the Bank’s “organised hypocrisy” enables corruption in poor borrower countries.

Anis Chowdhury, Emeritus Professor, Western Sydney University (Australia). He held senior UN positions in Bangkok and New York and served as Special Assistant to the Chief Advisor for Finance (with the status and rank of State Minister) in the Professor Yunus-led Interim Government. Anis has written extensively on macroeconomic issues, sustainable development, international financial architecture and political economy. E-mail: anis.z.chowdhury@gmail.com; a.chowdhury@westernsydney.edu.au

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The Federal Reserve Bank’s turn to ‘reserve management’ exposes the limited policy options still available as the US seeks to protect itself against international stagflation stemming from President Trump’s policies.

Jomo Kwame Sundaram

Reserve management
Successive US administrations have long refused to address the roots of the worsening fiscal and debt problems.

As the US Treasury borrows ever more to continue funding federal government spending with less tax revenue, the accumulated public debt of $39 trillion now costs over a trillion dollars a year to service, even more than 2025 defence spending!

Total Fed losses since 2022 exceed $245 billion! But how does a central bank, that literally creates its own money, lose money?

The losses are blamed on the Fed paying banks over 4% interest on reserves after 2008. However, most Treasury bonds the Fed bought to fund the COVID crisis response yield only 1–2%!

This massive ‘negative carry trade’ is booked as a ‘deferred asset’. Such creative accounting implies the US is technically insolvent. But this is not a problem as long as Wall Street shapes its own narrative.

Nurina Malek

After over a decade of ‘quantitative easing’ (QE), which created money on a large scale, the Fed claimed it was reducing its balance sheet from 2022 to 2025 to curb inflation.

Risk diversification
Finance ministries and central banks worldwide increasingly worry about their vulnerability.

The US decision to freeze about $300 billion of Russian assets held in Western financial institutions is supported by its Western allies. Such actions have triggered broader concerns.

Threatened by the prospect of a softening bond market, the Fed turn to reserve management, which implies it has exhausted other options, including printing money.

Increasingly weaponised in recent years, the dollar is no longer trusted as a neutral reserve asset. Hence, central banks have been diversifying their heavily dollar-denominated reserve assets to reduce vulnerability.

Physical gold has been quietly acquired to change reserve portfolios. Over the past three years, non-US central banks have bought over 1,000 tons of gold annually.

Horns of dilemma
New Fed Chair Kevin Warsh has announced that reducing interest rates and shrinking the Fed’s balance sheet are his policy priorities. Both seem responsible and sensible.

Lowering rates benefits borrowers. But a smaller balance sheet implies less market intervention, requiring greater fiscal discipline and monetary credibility, both of which are desired by markets.

But Warsh’s two goals cannot be realised together in today’s US economy. Over $10 trillion in bonds are maturing and need refinancing over the coming year, as the Treasury borrows ever more to finance its faster-growing fiscal deficit.

The Fed balance sheet cannot be reduced while keeping rates low. The new Fed Chair will also have to choose between printing money and letting the bond market collapse. All his predecessors have chosen to print money.

In 2012, Jerome Powell was sceptical of QE, arguing it would never be enough. But by 2020, Fed chair Powell printed more dollars than ever before.

The Fed has long been expected to buy up Treasury bonds that private interests did not purchase. Increasing the money supply has kept the banking system liquid and depreciated the dollar, as desired by Trump 2.0.

As private investors and foreign central banks lose interest in US Treasury bonds, demand is at its weakest in decades.

Who will buy new US debt if the Fed does not buy Treasury bonds while rates remain low? Outgoing Fed chair Powell came to the rescue.

As ‘reserve management’ requires less market demand, he has given the dollar system an unexpected new lease of life without lowering interest rates, as Trump demanded.

However, the policy change will do little to reverse contractionary and inflationary pressures on the world economy, worsened by Trump’s various policies.

Oil accelerant
The Hormuz oil shock could accelerate this otherwise gradual transition. The slow energy transition away from fossil fuels has increased vulnerability.

In the last half-century, oil price hikes have raised energy costs, exacerbating inflation worldwide. In 1973, the OPEC embargo quadrupled petroleum prices overnight.

Over the following year, the gold price almost doubled. The 1979 Iranian revolution more than doubled crude oil prices, which in turn pushed gold prices even higher.

The conventional central bank response of raising rates to fight inflation could worsen stagflation, as inflation rises while economic growth slows.

Raising interest rates may check some sources of inflation, while increasing borrowing costs, squeezing investment and consumption, and hiking the costs of Treasury debt.

Interest payments on accumulated federal debt will exceed a trillion in 2026. As old debt issued during QE is refinanced at higher rates, fiscal and debt problems will accelerate.

Therefore, the Fed’s turn to reserve management is not merely a minor technical change in balance-sheet bookkeeping. It is trying to address worsening public finances as policy options run out.

IPS UN Bureau

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Budget shortfalls could force the organization to move closer to the communities that it's meant to serve.

By JB Bae
FORT COLLINS, Colorado USA, May 25 2026 (IPS)

The $1.2 billion renovation of the Palais des Nations was intended to reaffirm Geneva’s centrality to the multilateral system. Instead, the city’s international quarter is emptying.

The World Health Organization (WHO) has cut hundreds of positions. The U.N. Children’s Fund (UNICEF) is relocating core administrative roles to Rome and Budapest. Other agencies are scaling back or relocating operations. The United States, which funds roughly a quarter of the U.N.’s regular budget, now owes approximately $2.2 billion, about 95% of all unpaid contributions to the organization.

Many will read this as a harbinger of the decline, or perhaps even the demise, of the U.N. system. Yet the crisis in Geneva may be creating the conditions for a more resilient multilateralism.

Critics claim that American taxpayers subsidized a U.N. bureaucracy hostile to their interests, one lacking accountability and captured by priorities divorced from its founding purposes. There is some truth to this. However, these arguments have marginalized those who wish to refound the U.N. system, rather than dismantling multilateralism wholesale.

The erosion of U.S. funding may be doing what decades of reform efforts could not: forcing a realignment of the U.N.’s structure with its mission. Numerous proposals, secretary-general initiatives, and expert panels have failed to produce meaningful change.

The U.N.’s own 2021 Integration Review, drawing on input from over 200 staff members across the organization, found that institutional insulation undermined impact, calling for more decentralized decision-making and reforms responsive to field realities. Member states had pressed for the same for decades.

Meanwhile, Geneva came to embody the distance between those running the institution and the constituencies they were meant to serve. The compensation structure tells part of the story. Bureaucrats enjoyed tax-free salaries, exceptionally generous pension arrangements, housing allowances pegged to one of the world’s most expensive cities, business-class travel, and education grants that cover most of the cost of elite international-school tuition in Geneva, where annual fees often reach $45,000 per child per year.

One study of United Nations High Commissioner for Refugees (UNHCR) operations found spending of roughly $600 per refugee annually (around $800-850 in today’s dollars). U.N. reimbursements for a single child’s school fees in Geneva, in other words, could support dozens of refugees for a year. These arrangements are not reserved for senior leadership. They define the terms of employment for the typical international civil servant.

These terms apply to a substantial workforce. Switzerland hosts roughly forty international organizations that employ more than 25,000 people, most concentrated in the Lake Geneva region. The World Health Organization, the largest, employs roughly 2,400 people at its Geneva headquarters and operated on a biennial budget of $5.3 billion for 2026-27 before recent cuts. The International Labour Organization (ILO), UNHCR, the World Trade Organization (WTO), and others maintain significant presences in Geneva.

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When the U.N. Secretary-General’s office issued a memo in April 2025 directing Geneva and New York to identify posts for relocation to lower-cost duty stations, the Geneva staff union’s response was telling: its official statement declared the union “alarmed,” hundreds of staff demonstrated on International Workers’ Day to protect their Geneva postings, and unions defended housing subsidies, education grants, and tax exemptions as essential. These numbers and reactions reflect the insulation of much of Geneva from the realities the institution nominally exists to address.

Yet the crisis is strengthening the position of those within the system who have long called for change. The U.N. Children’s Fund (UNICEF)’s consolidation of regional functions to Bangkok, the expansion of U.N. agency operations in Nairobi, and shifting administrative functions to lower-cost duty stations all reflect a shift toward where the work actually is. Technology and the remote collaboration it enables make justifying the Geneva-centric model even more difficult. What once required flights to Geneva can now happen across multiple continents simultaneously.

Simply relocating institutions to less costly settings, however, risks reproducing Geneva’s pathologies — insulated professional communities, compensation structures detached from local conditions, and organizational cultures oriented more toward one another than toward the populations they serve. More than simply moving offices, structural reform requires confronting how these institutions are staffed, incentivized, and embedded in the political contexts in which they operate.

A more promising direction is aligning institutions with the political support and capacity of host nations. This goes beyond decentralization and proximity to need, toward placing authority where capacity and political will already exist. Former aid recipients that have become donors and regional powers in their own right — Poland, Chile, and South Korea among them — are natural candidates for anchoring this kind of multilateralism. Having navigated conflict, development, refugee flows, and political transition themselves, they bring the political legitimacy and operational credibility that Geneva-centered bureaucracies cannot replicate.

The substance of the changes also matters for the legitimacy of the international order. A multilateral system whose centers of decision-making remain in Geneva, New York, and a handful of donor capitals is vulnerable to the accusation that it represents a historical moment that has long passed. Institutions whose operational weight sits closer to the communities they serve, staffed by professionals embedded in supportive settings, are harder to displace. What survives will be better able to compete for relevance in a more contested world order.

Geneva will survive this crisis as a conference center for highest-stakes diplomacy and backroom dialogues that only physical proximity can enable. But what emerges beyond Geneva, in the field offices of agencies closer to the populations they serve and potentially in the hands of actors with the legitimacy and experience to carry multilateralism forward, may prove closer to what the system was always intended to be.

Many of the structural problems that have long plagued the U.N. will remain. The shifts now under way will not solve them. But they change where influence accumulates, and who shapes the decisions that matter. This new multilateralism may prove more resilient, more legitimate, and harder to hold captive to the politics of any single donor.

JB Bae is an assistant professor of political science at Colorado State University. His research addresses issues in international security and foreign policy, with a focus on East Asia. He received his PhD from UCLA.

The views expressed by authors on Responsible Statecraft do not necessarily reflect those of the Quincy Institute or its associates.

Source: Responsible Statecraft

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UN Secretary-General Antonio Guterres. Credit: UN Photo/Sourav Sarker

By Thalif Deen
UNITED NATIONS, May 25 2026 (IPS)

The United Nations has had a longstanding tradition, described by some as a “privilege”, where most senior staffers are entitled to highly-expensive First Class or Business Class seats on trips worldwide.

But with the world body facing a severe cash crisis –and demands by the Trump administration calling for drastic cost-cutting—another privilege is likely to end up on the chopping block.

https://www.un.org/sg/en/content/senior-management-group

Speaking off-the-record, a former UN official told Inter Press Service: “On the rare occasion I travelled with the UN for work, I was always shocked by the enormous amounts paid for air tickets. I find it interesting to see that it took the UN a deep financial crisis to invite the staff to a ”voluntary” downgrade”

Setting the record straight, UN Spokesperson Stephane Dujarric told IPS: “To be clear, a Secretary-General is the only person in the UN cleared for first class travel, and since about the start of the year, this Secretary-General no longer sits in the first class cabin.”

As part of the Organization’s ongoing efforts to reduce travel costs, and in response to the General Assembly’s call to strengthen measures to promote voluntary downgrades from business or first-class travel entitlements, the UN’s Human Resources Services Division (HRSD), in collaboration with the Travel and Transportation Section (TTS), in the Department of Operational Support (DOS), has launched the Voluntary Downgrade Pilot which introduced a set of new incentives to encourage voluntary downgrade for official air travels by United Nations travelers.

“The initiative is designed to encourage United Nations travelers to voluntarily downgrade from business class to premium economy, or equivalent cabins, by offering eligible travelers, a series of additional incentives aimed at maintaining comfort and convenience, while generating cost savings for the Organization,” says a circular released 18 May.

Meanwhile, in the latest figures released in one published report, the UN spent approximately $319 million on staff travel in one recent reporting year, covering roughly 98,000 trips.

Of those trips:

• About 12,000 flights were business class
• Only 51 flights were first class

The report also noted that the Secretary-General has recommended curbing first-class travel for senior officials.

Current UN travel rules state that:

• Most staff up to D-2 level normally travel economy, though some long-haul exceptions permit a higher class.
• Under-Secretaries-General (USGs) and Assistant Secretaries-General (ASGs) are entitled to “the class immediately below first class,” which in practice is generally business class on most airlines.

So, while the UN’s total annual travel spending has been in the range of hundreds of millions of dollars, the portion specifically attributable to senior officials flying business or first class is likely only a fraction of that total — probably in the tens of millions rather than hundreds of millions annually, based on the relatively small number of first-class tickets reported. The UN has steadily tightened rules on premium travel over the years, according to the report.

In addition to the existing entitlements for travelers, such as reimbursement for advance seat selection, in-flight meals and beverages, and one additional checked bag, the new incentives, according to the staff circular include:

Rest Periods (subject to supervisory approval)

• One additional day of rest upon arrival at the duty station, with up to one day of additional Daily Subsistence Allowance (DSA), if arriving early.
• The option to remain at the official business location for one extra day prior to return, with DSA, if this reduces overall ticket cost.
• One additional calendar day of rest upon return to duty station (no DSA).

Reimbursement of costs for

• Lounge access at departure and connection points for both outbound and inbound travel (where applicable).
• Purchase of “extra space seating” including “couch style” in economy class, if offered by the airline.

The circular appeals to staffers to consider the above incentives when planning official travel, ”and should you opt for voluntary downgrade, you may select any combination, provided that the total cost is less than the entitled business class fare, keeping in mind, any additional rest periods selected under the pilot will remain subject to the approval of your first reporting officer.”

How to get started

• Explore details on iSeek: New incentives for travelers: Voluntary downgrade pilot launches | iSeek
• Check out how-to guides on how to opt in;
• Contact your local HR, Travel, or Admin Office for further information and support.

“We encourage all staff to take advantage of these options and contribute to more cost-effective travel practices across the Organization”.

HRSD in the Office of Support Operations (OSO) and TTS in the Facilities and Commercial Acitivites Service (FCAS) within the Division of Administration (DOA), are part of the Department of Operationsl Support (DOS).

Read about DOS on iSeek or our website and follow us on LinkedIn and X.

IPS UN Bureau Report

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Credit: Bibbi Abruzzini/Forus - Rabat, Morocco

By Silla Ristimäki, Miguel Santibañez, Emeline Siale Ilolahia and Aoi Horiuchi
HELSINKI, Finland / SANTIAGO, Chile / SUVA, Fiji / TOKYO, Japan, May 20 2026 (IPS)

Just four years of the Agenda 2030 for Sustainable Development remain. What comes after 2030 is already a political battleground.

The next global development framework is being shaped now: through quiet agenda-setting, shifting alliances, financing choices, contested norms, and decisions about who gets to participate and who is pushed to the margins. That matters because the world that will shape what comes next is not the world that adopted the Sustainable Development Goals (SDGs) in 2015.

The context is harsher, more fractured and less generous. Geopolitical fragmentation is deepening. Armed conflicts are distorting priorities. Climate impacts are accelerating. Development finance is under growing strain. Civic space is shrinking. Public trust in multilateralism is weaker. And too often, the rights, equality and accountability commitments that gave the SDGs their normative force are treated as negotiable.

“We step into the next decade against the background of climate chaos, growing inequality and increasing poverty. The scaffolding for positive change shall be to infuse democratic values in the blood stream of all our governments from the Right to the Left,” says Dr. Moses Isooba, executive director of the Uganda National NGO Forum and Vice-Chair of Forus.

The post-2030 debate must confront the political and structural weaknesses that limited implementation the first time around.

As a civil society network, we have been here from the very beginning. We have secured the adoption of the SDGs with the Beyond 2015 campaign, pushed for innovation and ambition, challenged power, brought forward the voices of communities, and held systems accountable. That role evolves and as we now look “beyond 2030”, we remain present, engaged, and determined to influence what comes next.

One message comes through clearly: the next agenda will only be credible if we are clear about three things — what must be defended, what must be demanded, and what must be declined.

What must be defended

Some foundations of the current framework remain essential and must not be traded away for the sake of political convenience.

The first is universality. One of the most important achievements of the SDGs was to establish that sustainable development is not only a concern for lower income countries, but a universal responsibility. Policies, consumption patterns and economic models that drive inequality, exclusion and ecological harm must be addressed in all regions. High-income countries must not only finance development but also reform their own adverse policies. If the next framework weakens the recognition that sustainable development must integrate social justice, equality, environmental sustainability, peace and human rights, it will not move us forward. It will mark a retreat.

The second is civic space. Civil society participation is one of the conditions that makes accountability, inclusion and implementation possible yet it is increasingly constrained by financial pressures, exclusion from global decision-making processes and erosion of fundamental rights. A future agenda which prioritises resources and protection for civil society supports the building of stable, sustainable societies.

The third is local leadership. Communities and local civil society actors remain closest to the realities that global frameworks claim to address, yet they are still structurally under-resourced and under-represented. Localisation beyond the “buzzword” can bring essential resources for problem diagnosis and planning, increasing effectiveness and legitimacy for sustainable development and peacebuilding.

And finally, what must be defended is multilateralism itself, not as an abstract ideal, but as the shared political space where common commitments can still be built.

“Safeguarding the structures created to advance peace, cooperation and rights sustains global hope and possibilities to address common global challenges. This is in the interests of us all, future generations and the planet.” Silla Ristimäki, Adviser at Fingo. “This is why ambitious reform of the UN cannot be separated from the post-Agenda 2030 discussion.”

What must be demanded

Defending core principles is not enough. Negotiations about the future must also correct what the Agenda 2030 left unresolved.

At the centre of this is financing. A credible post-2030 framework cannot rest on the same unequal financial architecture that has constrained implementation for years. Debt burdens, unequal fiscal space, volatile aid flows and weak commitments have all narrowed the room for governments and communities to act. Financing reforms must include debt restructuring and relief, fairer lending terms, increased concessional finance, stronger domestic resource mobilisation, tax justice, policy coherence and predictable support for civil society.

“Many countries are spending more on debt than education or health. We need to reform the current unjust international financial architecture,” says Aoi Horiuchi, Senior Advocacy Officer at JANIC, the civil society network for international cooperation in Japan.

Accountability must also be stronger. Voluntary reporting and soft review mechanisms have not been enough. A future agenda must be backed by mandatory, transparent and regular review, with independent oversight and a formal role for civil society and local actors in tracking progress and exposing implementation gaps.

And participation must mean more than consultation after decisions are already taking shape. Civil society needs a formalised, meaningful and safe role in both negotiating and implementing the future framework, especially for local actors and groups continuing to face structural or political exclusion.

“Meaningful change comes from meaningful participation. That’s why we need to defend civic space,” says Horiuchi.

What must be declined

Some directions already visible in early discussions must be rejected outright.

A thinner agenda that lowers ambition in the name of consensus must be declined. So must any attempt to weaken universality, rights, gender equality, civic freedoms or climate ambition for political expediency.

The continuation of a financial status quo that deepens inequality while speaking the language of partnership must also be declined. So must accountability arrangements that remain symbolic, selective or performative.

And tokenistic participation must be named for what it is. A process that brings civil society into the room for appearance’s sake while excluding it from agenda-setting, decision-making and follow-through is managed exclusion.

Finally, as development governance evolves, the expanding role of private and philanthropic actors must not come without public-interest safeguards, democratic oversight and accountability. Public goals cannot be left to unaccountable power.

We must get out of silos, create spaces of dialogue, of co-responsibility and raise the question of whether the post-2030 framework will be more honest about power, more serious about accountability, more capable of confronting structural inequality, and more open to those whose lives and rights are most at stake.

Our answer is here:
Defend what must not be lost.
Demand what must be corrected.
Decline what would weaken the future.

IPS UN Bureau

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The Republic of Korea (Korea), Vietnam and Bangladesh are on three different rungs of the development ladder. While Korea is a member of the rich nations’ club, i.e., the Organisation for Economic Cooperation and Development (OECD), Bangladesh is still a least developed country (LDC); and Vietnam is in the middle.

Anis Chowdhury

But relative policy independence vis-à-vis donors, among other factors, played a crucial role in separating their development trajectory. Development succeeded in countries that maintained policy independence despite their heavy aid dependence.

Aid dependence and policy independence

Being among the world’s poorest countries, all three had to depend heavily on foreign aid. For example, foreign aid financed around 74% of Korea’s imports on average during 1953-1960, and proceeds from the sales of aid goods (e.g., food aid under the PL480 programme of the US, packaged as “Food for Peace”) constituted on average 38.4% of government revenue.

US aid to Korea was “huge”, contributing about 80% of foreign aid during 1945-1975. Korea received nearly as much economic aid from the US as ALL of Africa during 1946-1978. Excluding military aid, the US economic at its peak was 21% of Korea’s GDP, and financed about 50% of government expenditure.

Source: The World Bank

Yet, the Korean government maintained considerable policy independence regarding the use of aid funds. While the US aid agency insisted on providing non-project assistance for macroeconomic stabilisation rather than growth, the Korean government used non-project aid to rebuild the manufacturing sector for accelerating growth, and demanded more project assistance. The policy conflict was negotiated and coordinated by the Combined Economic Board (CEB, established in 1952). Although CEB was jointly chaired by the representatives of the US aid mission in Korea and the Korean government, Korea prevailed.

The Korean government also maintained its policy independence from the World Bank (WB). For example, when in 1967 the WB rejected Korea’s funding request for the Seoul-Busan expressway, connecting the nation’s capital to its main sea-port, Korea completed the 428km expressway with domestic finance and resources in 1970 as other multilateral and bilateral donors also refused to finance it following the WB’s rejection.

The WB and donors believed the expressway was an excessively grandiose project for a country so poor. Proving them wrong, the expressway not only spurred economic activities along the corridor of two major population centres, its construction was a critical learning opportunity for the Koreans. With the gained capacity, Korean construction companies were able to win major infrastructure projects in the Middle-East, which was a critical source of foreign exchange. Korea is now regarded as a leader in infrastructure construction.

The WB also was very critical of Korea’s Heavy and Chemical Industry (HCI) drive (1973-1979). Ignoring the WB, Korea pushed ahead, and proved the WB and other critics wrong. By the early 1980s, HCI became the nation’s leading export industries. The HCI drive was greatly successful in boosting investment, leading to the rapid growth of the manufacturing sector and its structure change. The manufacturing sector grew 16.2% per annum from 1971 to 1980, much higher than the GDP growth of 9.1% during the same period, while the share of HCIs in manufacturing value added rose to 58.3% in 1980.

No wonder, Korea broke away from the poverty trap in the early 1970s, leaving its “poor cousins” – Bangladesh and Vietnam – behind to become a full member of the OECD in little over two decades in 1996.

Vietnam’s story is not so different from that of Korea. Since initiating reforms in 1986, Vietnam quickly became WB’s one of the top loan recipient countries. But the WB’s influence over Vietnam’s development path has been limited, as the government has always refused to adopt policies imposed by foreign organisations. With strong enough institutions Vietnam achieved “ownership” of public policies.

Here is an interesting story of Vietnam’s determination to pursue its own development strategies. When in 1997, the WB approached Vietnam with an offer of US$300 million in credit in exchange for structural adjustment, à la the Washington Consensus model, including faster privatisation and financial liberalisation, the Vietnamese government declined. The WB returned with a higher offer in 1998, and Vietnam declined again. When the WB came again in 1999 with an even higher offer, the government issued a stern rebuke. The minister of planning and investment, Tran Xua Gia, told WB representatives, “You cannot buy reforms with money . . . no one is going to bombard Vietnam into acting.”

By then the Vietnamese government knew from the experience of Indonesia the risks of yielding too much sovereignty to international markets and institutions. The International Monetary Fund (IMF) had to wind up its last programme in 2004 as Vietnam refused the IMF’s demand for an independent audit of its central bank and disagreed over privatisations of state-owned enterprises.

Vietnam charted its own path of reforms – Đổi Mới, learning from successes and failures of neighbouring East Asian countries, including China as well as its former patron and role model, former Soviet Union.

Vietnam posted remarkable macroeconomic performances following the launch of Đổi Mới, with GDP growing at close to 8% per annum. Since the beginning of the 2000s, it also recorded Asia’s highest rate of growth in exports, half of which were made up of manufactured products, prompting The Economist to hail Vietnam as “Asia’s other miracle”.

Starting in 1975 with a per capita GDP of about US$85 after successfully defeating the US that waged a devastating war on Vietnam for more than two decades, Vietnam became a lower middle-income country in 2009. “Desperately seeking model countries”, unsurprisingly the first country Robert Zoellick visited after becoming President of the WB in 2009 was Vietnam, a country governed by its Communist Party, constructing a ‘socialist-oriented market economy’. One could almost say, “Vietnam is more important for the WB than the WB is for Vietnam”!

Poor Bangladesh lacks self confidence

Bangladesh, in search of development, joined the club of LDCs in 1975 when its GDP per capita was US$230, and still remains a LDC after more than five decades maximising LDC related facilities. Bangladesh is scheduled to graduate out of the LDC category in November this year; but it is asking for a deferment, lacking self-confidence.

On the other hand, self-confident Vietnam with its per capita GDP of only US$82 in 1975 decided not to join the LDC club, despite having to face the challenges of reconstruction and reunification in the most difficult global economic situation – stagflation. It received aid (mostly from the former Soviet Union); but did not blindly follow either its former patron USSR’s reform package or that of the WB/IMF. Its former enemy, the US, which pressured the WB to halt all funding, made a U-turn in the early 1990s, and signed the US-Vietnam Bilateral Trade Agreement in 2000.

Korea could have also joined the LDC club in 1971 when the UN created the LDC category for the world’s poorest countries; but it did not. Heavily dependent on US foreign aid for food, fuel and other raw materials, Korea was not seen as a promising place for major investments until the late 1960s. So, the State took the lead to break the vicious circle of low income and low investment.

Of course, Bangladesh is no longer a “basket case”; it is now a lower middle-income country. It also showed some courage to stand on its own feet when the WB declined to finance the Padma Bridge project, citing corruption.

However, Bangladesh could have done better had it not surrendered its policy independence to the donors, as the experiences of RoK and Vietnam demonstrate. Like successful marriages, there are many factors for successful development. Failure in any one of those essential elements can be damning according to Leo Tolstoy’s Anna Karenina principle, even if it has all the other ingredients of success.

Anis Chowdhury, Emeritus Professor, Western Sydney University (Australia). He held senior UN positions in Bangkok and New York and served as Special Assistant to the Chief Advisor for Finance (with the status and rank of State Minister) in the Professor Yunus-led Interim Government. Anis has written extensively on East and Southeast Asian economies, including The Newly Industrialising Economies of East Asia (Routledge) and The Political Economy of East Asia (Oxford University Press). E-mail: anis.z.chowdhury@gmail.com

IPS UN Bureau

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Bangladesh remains one of the most corrupt countries in the world. Its corruption perception index (CPI) score, 24, is 18 points below the global average score of 42, and 21 points lower than the Asia-Pacific region’s average of 45. One of the main sources of corruption is over-priced aid-funded projects as they lack competitive bidding. Projects funded through Government-to-Government deals drive up costs by more than 400% compared to more transparent alternatives, and around 35% of project costs are lost to corruption and inefficiency.

Anis Chowdhury

Complicity

Development partners – traditional and non-traditional – cannot deny their complicity. The most culpable is the World Bank, followed by the Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA). The shares of Bangladesh’s external debt liabilities to them are around 29%, 23% and 18%, respectively, totalling 70% of total external debt. Russia and China are Bangladesh’s main non-traditional development partners, with their respective shares of total external debt at 11% and 7%. All donors offered loans rampantly to the fascist regime to achieve their strategic and business interest, ignoring its extensive corruption and wide-spread human rights violations.

The World Bank briefly demonstrated its adherence to responsible lending principles when it cancelled $1.2 billion IDA credit for the Padma Bridge project in 2012, citing high-level corruption allegations. But its lending subsequently increased as if to expiate itself for the cancellation of the Padma Bridge loan. Mr. Hasan, one of the most corrupt ministers in the deposed Hasina Government, boasted, “once the World Bank cancelled its credit to finance Padma Bridge but now [in 2023] it has proposed to provide $2.25 billion”. To embarrass (or absolve?) the Bank, Sheikh Hasina presented a picture of the Padma Multipurpose Bridge to World Bank President David Malpass at the loan signing ceremony.

While Dhaka boasted that the Padma Bridge project was “entirely funded” by the government, China Exim Bank in fact provided $2.67 billion preferential buyer’s credit. The project costed approximately $3.6-$3.9 billion, nearly 3 times the initial estimate of $1.2 billion (the amount sought from the World Bank), largely due to corruption. The cost over-run triggered crises in both the forex and local currency markets, leading to the erosion of the country’s foreign exchange reserves.

The International Monetary Fund (IMF) provided the lifeline at the dying hours of Hasina’s kleptocratic regime when it approved $4.7 billion in January 2023 with some vague conditionality, such as raising revenues, implementing structural reforms to create a conducive environment to expand trade and foreign direct investment, deepening the financial sector, and developing human capital.

The IMF chose to turn a blind eye to widespread corruption, including the looting of banks by the regime’s cronies, gross violations of human rights and election engineering to hold on to power. Can the IMF absolve itself of responsibility for enabling the survival of the collapsing repressive and corrupt regime to commit human rights violations and abuses during the mass uprising against it a year and half later?

Old habits die hard

Corruption in Bangladesh has deep roots; corruption’s tentacles have reached almost the entire body polity of the country to become a ‘social culture’. Nevertheless, the Interim Government, led by Nobel Laureate Professor Yunus, took some bold reform initiatives to strengthen the Anti-Corruption Commission (ACC) and the integrity of the financial sector.

Thus, it is deeply disappointing that the newly elected government replaced the highly professional central bank governor with a failed business person with no background in banking or international macroeconomics within the first week of assuming power. A loan defaulter himself, the new governor immediately relaxed the loan rules. The government also amended the Interim Government’s Bank Resolution Ordinance to allow the return of the restructured banks to previous owners who looted these banks.

These changes, together with the new government’s rejection of the Interim Government’s ordinances concerning the ACC, the independence of judiciary and the human rights commission, are clear signs of the old habits’ refusal to die and the persistence of corruption.

Another old habit, i.e., addiction to loans (so-called aid), denies to die. As of April 2026, the External Relations Division (ERD) of the Ministry of Finance has been instructed to look for up to $3 billion from development partners. Interestingly, the ERD’s main activity is foreign fund searching through its ‘fund searching committee’ which meets periodically to review (code name for naming and shaming section chiefs) its monthly loan signing targets. Instead, the ERD should have been focusing on fostering and strengthening economic relations – trade and investment – as its name implies.

One direct damage of aid addiction is the lethargy in mobilising domestic resources – Bangladesh’s tax-GDP ratio (around 7%) is not only low compared with the averages for low-income countries (13.5%) and middle-income countries (18.9%), but has also been declining from its peak of around 9% in 2012 since its borrowing from development partners accelerated.

Of course, the other collateral damage is the persistence of corruption. IMF research finds that countries with “voracious” and “fractious” politics divert large amounts of public resources to unproductive transfers to powerful interest groups.

Development partners’ responsible roles

All development partners – multilateral and OECD DAC members – ostensibly are in favour of “good governance”, meaning against corruption. The World Bank “considers corruption a major obstacle… to promoting shared prosperity”. The IMF views corruption as “a major obstacle to economic growth, stability, and development”. The ADB “maintains a zero-tolerance stance against corruption, viewing it as a major obstacle to development, poverty reduction, and economic growth”.

Unfortunately, the evidence of their complicity presented above tells a different story from their avowed anti-corruption posture. This casts doubt on their role as development partners. Global evidence shows that donors do not systematically allocate aid to less corrupt countries.

The citizens of the country expect that development partners remain true to their declared anti-corruption stance and advance concessional loans provided the government commits to strict monitorable anti-corruption measures and deep structural reforms. In particular, urgently needed funds should be considered if:

• Ordinances of the Interim Government designed to strengthen anti-corruption measures, protect human rights and ensure judicial independence are ratified by the Parliament;
• amendments to the Bank Resolution Ordinance are repealed; and
• a professionally competent and experienced person with high integrity is appointed as central bank governor.

To achieve deep structural reform, the focus should be on strengthening domestic revenue mobilisation and reorientation away from the aid-dependent development model to a trade and investment led development model. Therefore, development partners should open up their markets, encourage investment in productive sectors and help develop Bangladesh’s productive capacity.

On the other hand, if they remain complicit and advance loans in a highly corruption-prone environment, any future pro-people government will have the right to declare such loans as “odious” and to refuse repayment obligation.

Anis Chowdhury, Emeritus Professor, Western Sydney University (Australia). He held senior UN positions in Bangkok and New York and served as Special Assistant to the Chief Advisor for Finance (with the status and rank of State Minister) in the Professor Yunus-led Interim Government. E-mail: anis.z.chowdhury@gmail.com

IPS UN Bureau

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The global economy, is at the precipice of “stagflation” – growth slowdown and higher inflation – due to the energy price shock following the illegal US-Israel war on Iran. The International Monetary Fund (IMF) has recently termed this as a “textbook negative supply shock”. For the first time since the 1970s, the prospect of stagflation seems real.

Anis Chowdhury

Prospects of global stagflation

The IMF simulated three possible macroeconomic scenarios depending on the duration of this conflict and the extent of damages to energy infrastructure in the region. These range from a marginal drop in this year’s forecast global growth rate – from 3.4% to 3.1% – to a moderate decline to 2.5% and a sharp decline to 2%. The projected spikes in “headline inflation” – covering all goods and services, including volatile items, e.g., energy and food – range from 4.4% to 5.8% in 2026.

The IMF rightly doubts whether inflation can be checked with monetary tightening without causing substantial increase in unemployment. But it does not offer any solutions; instead advises the central banks to remain ready “to act decisively to maintain price stability”.

The IMF’s overall policy advice is conservative. However, it acknowledges the need for monetary and fiscal policy to support economic activities if the if financial conditions tighten sharply and global activity deteriorates markedly.

Inflation phobia and policy over-reaction

Ben Bernanke and his co-researchers found that the recession in the 1970s did not result from the oil-price shocks “per se, but from the resulting tightening of monetary policy”. Bob Barsky and Lutz Kilian found “that the oil price increases were not nearly as essential a part of the causal mechanism generating the stagflation of the 1970s as is often thought”. Ed Nelson blamed central banks’ “faulty doctrine” for the 1970s stagflation.

So, it was not inflation that caused output to decline, but rather, inappropriate and draconian efforts to curb inflation that inevitably repressed growth, and produced world’s first stagflation. This may happen again if central bankers overreact and tighten the financial conditions to kill the current “textbook supply shock” inflation.

The problem is the central bankers’ dogmatic group-thinking despite contrary empirical evidence. For example, the fear of unhinged inflation expectations and wage-price spirals do not have any empirical basis as reported in IMF research and the Australia’s Reserve Bank.

Yet, the central bankers and the IMF favour monetary tightening fearing the risk of “unhinged” inflation expectations and wage-price spirals.

Revisiting the inflation target

The central bankers’ group-thinking bias insists on an inflation target of 2% – a figure “plucked out of the air”, yet became “global economic gospel”. Don Brash, the acclaimed former Governor of the Reserve Bank of New Zealand, who was the first central bank governor to adopt a 2% inflation target admitted that it was based on a chance remark by then New Zealand Finance Minister Roger Douglas “during the course of a television interview”. It became “the mantra, repeated endlessly” as Brash and his colleagues “devoted a huge amount of effort” to preaching his new gospel “to everybody who would listen – and some who were reluctant to listen”.

Olivier Blanchard, the IMF’s former Chief Economist, questioned the wisdom behind the 2% inflation target and argued for a higher, e.g., 4% target following the 2008-2009 global financial crisis. IMF research also advocated for a long-run inflation target of 4%. Such a moderately higher inflation should widen policy space.

Joe Gagnon and Chris Collins argued that “the case for raising the inflation target is stronger” than it is usually thought. Their research revealed that “the benefits [of a higher inflation target] clearly exceed the costs”.

Thus, one should not be surprised when The Financial Times says, “It is time to revisit the 2% inflation target”.

Rethinking inflation

Almost all central bankers see inflation as an outcome of excess demand, caused by either an increase in aggregate demand or a decrease in aggregate supply at a given price. Prices rise to eliminate the excess demand.

A common view is that higher prices lead to demand for higher wages which in turn cause higher prices, thus generating wage-price spirals. Therefore, central bankers focus on containing demand by raising interest rate regardless of the sources of inflation.

On the other hand, optimal policy-mix differ when inflation is seen as the result of a distributional conflict or disagreement. Guido Lorenzoni and Iv´an Werning analysed the impacts of supply shocks arising from “non-labour” inputs, such as energy under the different relative bargaining powers of labour and firms where the non-labour input price is perfectly flexible, and goods prices are more flexible than wages.

They found that the optimal policy response to a supply shock coming from the scarce non-labour input is to “run the economy hot”, i.e., to allow demand to exceed supply capacity and higher inflation. Their findings imply that it would be more efficient to reach the adjustment with the help of higher price inflation than through lower price inflation and deeper wage deflation by causing higher unemployment.

David Ratner and Jae Sim analysed the trade-off of anti-inflationary measures considering inflation as an outcome of distributional conflict. They found that restrictive anti-inflationary measures are more costly in terms of unemployment.

Interestingly, their finding corroborates the IMF’s observation that the aggregate supply curve has become flatter making restrictive anti-inflationary measures more costly in terms of higher unemployment. Unfortunately, the central bankers’ anti-inflation group bias dismisses the higher unemployment or growth declines due to restrictive policies as “short-term pains for long-term gains”.

Recent IMF research revealed permanent scars of recessions, including those arising from external shocks and macroeconomic policy mistakes; they all “lead to permanent losses in output and welfare”. The Lancet reported “substantial effects on suicide rates”. The Body Economic: Why Austerity Kills, investigated the human cost of austerity policies during economic crises to emphasise that health indicators can significantly deteriorate.

Optimal policy response

In light of the above, the central bankers should reconsider their hawkish anti-inflationary policy-setting.

The governments around the world are trying to ease fuel-price impacts by fiscal measures such as a temporary reduction of fuel excise duty, subsidies and price caps. The mainstream commentators, including the IMF, argue that these measures may have significant fiscal costs if the crisis lingers on, and would put extra-burden on central banks, which are focused on controlling inflation.

Significantly, the optimal policy-mix should include tax revenue raising measures. Governments should consider enhancing tax progressivity. In particular, an excess profit tax should be imposed on the beneficiaries of higher interest rates and fuel prices, such as banks and fuel companies to fund cost of living support measures.

Dr. Ken Henry, Australia’s former Treasury Secretary has recently argued that a 100% tax on windfall profits from gas would be “socially optimal”. Tony Wood held “A windfall profit tax may be the least-worst solution to the gas crisis”.

Research based on US data reveals that an excess profit tax reduces existing racial and ethnic inequalities and inequalities between groups with different educational attainments. It can also accelerate renewable energy transition when increasing geopolitical tensions and climate impacts threaten continued volatility in fossil fuel and gas markets.

Anis Chowdhury, Emeritus Professor, Western Sydney University (Australia). He held senior UN positions in Bangkok and New York and served as Special Assistant to the Chief Advisor for Finance (with the status and rank of State Minister) in the Professor Yunus-led Interim Government. E-mail: anis.z.chowdhury@gmail.com

IPS UN Bureau

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Frank McCourt, founder of Project Liberty, speaking with Foreign Policy CEO Andrew Sollinger at the Geoeconomics Forum. Credit: IPS

By Umar Manzoor Shah
SRINAGAR, India, Apr 17 2026 (IPS)

As war in the Middle East ripples through global markets, policymakers, economists, and industry leaders gathered in Washington this week to agree that economics is no longer separate from geopolitics. It is now its core instrument.

At the Geoeconomics Forum hosted by Foreign Policy alongside the Spring Meetings of the International Monetary Fund and World Bank, speakers repeatedly pointed to a world shaped by shocks, where supply chains, energy flows, and technology have become tools of power.

“Geoeconomics is no longer a backdrop to global politics. It is the key and critical element,” said Foreign Policy CEO Andrew Sollinger in his opening remarks.

The urgency of that shift is tied closely to the ongoing conflict in the Gulf, which has disrupted energy markets and exposed vulnerabilities in global trade systems. The war has made the world understand how quickly regional crises can cascade into worldwide economic instability, affecting everything from fuel prices to industrial production.

Participants at the forum described a transformed global order where governments increasingly deploy economic tools once considered neutral or technical.

Trade policy, capital flows, and supply chains now serve strategic goals. Critical minerals, essential for semiconductors and artificial intelligence systems, have become geopolitical leverage points. Energy routes such as the Strait of Hormuz have turned into potential choke points with global consequences instead of just transit corridors.

“Geopolitics and economics have always been linked. We are going back to a school of thought that sees them as inextricable,” Jacob Helberg, U.S. Under Secretary for Economic Affairs, said in his address.

Helberg pointed to growing competition over rare earth minerals, where China dominates processing and has begun using export controls as a strategic tool. At the same time, logistics corridors and manufacturing hubs have emerged as additional pressure points in the global system.

“The stack is totally interlinked,” he said, referring to the chain from raw materials to finished technology. “There are choke points at every layer.”

The forum repeatedly returned to a central theme: fragmentation.

Countries are adapting to a “shock-prone” world marked by conflict, pandemics, and financial instability. This has led to a shift away from global integration toward more regional and strategic economic blocs.

Middle powers, in particular, face difficult choices. As competition intensifies between the United States and China, many nations are weighing how to align their economic and technological futures.

Dr Pedro Abramovay, Vice President, Programs, Open Society Foundations, argued that the moment offers both risk and opportunity for these countries.

“We need to make sure that middle powers act as middle powers and not just middlemen,” he said, stressing that democracy can shape their role in a changing order.

Abramovay said the current moment has exposed long-standing imbalances in the global system.

“It unveils the reality that existed before,” he said, referring to earlier global arrangements that often did not serve the interests of the Global South.

He noted that domestic political pressure is now reshaping how countries engage globally. Leaders can no longer align externally without responding to internal constituencies.

“That internal pressure can empower those middle powers to assert their sovereignty and negotiate effectively,” Abramovay said.

The forum highlighted growing calls for a reworked international order grounded in sovereignty and public interest rather than narrow economic gain.

“We need to have clear clarity of agenda. We need to have commitment of those leaders expressing that they are there, not representing big corporations or, again, interests and organisations that speak for themselves, but exactly speaking in the name and representing the majority of the world,” Abramovay added.

Frank McCourt, founder of Project Liberty, warned against framing the future as a binary choice between U.S. private-sector dominance and Chinese state-led models.

“This is a false dichotomy,” he said, arguing for a third path that aligns technology with democratic values.

He highlighted growing unease among countries that feel caught between competing systems, noting that many are exploring alternative frameworks for digital governance and economic cooperation.

Human Impact Behind the Strategy
While much of the discussion focused on high-level strategy, speakers acknowledged the human consequences of geoeconomic shifts.

Energy shocks translate into higher costs for households. Supply chain disruptions affect jobs and access to goods. Decisions made in boardrooms and ministries ripple outward to communities worldwide.

“The best-laid plans can be interrupted by unforeseen circumstances. You have to pivot, adapt, and build better,” Sollinger said.

That message echoed throughout the event.

IPS UN Bureau Report

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Trump 2.0 has been marked by the blatantly aggressive exercise of power to secure US interests as defined by him. While many recent trends even predate his first term, his reduced use of ‘soft power’ has exposed his bullying, extortionary use of US power.

Jomo Kwame Sundaram

The US has illegally weaponised more laws and policies, especially by unilaterally imposing sanctions and tariffs, especially on dissenting regimes.

Often, such threats are not ends in themselves but actually weapons to strengthen the US bargaining position to secure more advantageous deals.

Under World Trade Organization (WTO) rules, members are obliged to extend ‘most favoured nation’ status to all other member nations.

On April 2, 2025, President Trump announced supposedly ‘reciprocal tariffs’, ostensibly responding to others having trade surpluses with the US.

Appealing to the WTO dispute settlement mechanism is futile, as the US has blocked the appointment of Appellate Body members since the Obama presidency.

Trump 2.0 has also been trying to get rich investors and governments – mainly from Europe, Japan, and the oil-rich Gulf states – to invest in the US.

Most such investments are in financial markets, rather than the real economy. Such portfolio investments have propped up asset prices, even bubbles.

Trump’s bullying is resented but has not been very effective vis-à-vis strong adversaries. Consequently, allies have been most affected and resentful.

Deepening stagflation
Meanwhile, much of the world economy has never really recovered from the COVID-19 slowdown, while Western sanctions and tariffs have raised production costs, worsening inflation.

Recent trends have also deepened the stagnation since 2009. Many governments and the IMF have made things worse by cutting spending when most needed.

Impacts have varied, generally worse in poorer countries, where the IMF limits policy options and credit rating agencies raise borrowing costs.

US Fed chair Powell’s interest rate hikes, ostensibly to address inflation, also reversed ‘quantitative easing’, which had lowered interest rates from 2009.

Trump’s aggression has reduced economic engagement with the US, inadvertently accelerating de-dollarisation, thus undermining the dollar’s ‘exorbitant privilege’.

Central banks worldwide have responded predictably, refusing to be counter-cyclical in the face of economic slowdown, citing inflationary pressures.

Transactional?
Trump’s transactional approach has meant bilateral, one-on-one dealings, further advantaging the world’s dominant power.

Involving one-time asymmetric ‘zero-sum games’, such transactions ensure the US gains, necessarily at the expense of the ‘other’. Transactionalism also enables ‘buying influence’, or corruption.

The resulting uncertainty reduces investments, not only in the US, but everywhere, due to greater perceived risks, exacerbating the stagnation. Thus, Trump 2.0 policies have reduced investment and growth.

The whole world, including the US, has suffered much ‘collateral damage’, but the White House seems content as long as others lose more.

Unipolar sovereigntism
The transitions to unipolar sovereigntism and then to a multipolar world have been much debated.

Three decades ago, the influential US Council on Foreign Relations’ journal, Foreign Affairs, argued that the post-Cold War unipolar world was actually ‘sovereigntist’.

NATO Secretary-General Mark Rutte’s ‘Daddy’ reference to Trump suggests that the sovereigntist moment is not quite over, as the US ‘No Kings’ mobilisation suggests.

Trump’s ‘America First’ clearly opposes multilateralism, generating broader concerns. He has withdrawn the US from many, but not all, multilateral bodies.

On January 7, the US withdrew from 66 international organisations deemed “wasteful, ineffective, or harmful”, addressing issues it claimed were “contrary” to national interests.

Trump’s continued, selective use of multilateral bodies has served him well, retaining privileges, e.g., permanent membership of the UN Security Council with veto power.

The UN Security Council’s Gaza ceasefire resolution was used to create and legitimise his Board of Peace, now touted by some as an alternative to the UN!

Trump will not withdraw from the WTO as its Trade-Related Intellectual Property Rights (TRIPS) agreement is key to US tech bros’ trillions from transnational IP.

End of soft power
Some of Canadian Prime Minister Mark Carney’s January 20th remarks at Davos are telling:

“More recently, great powers have begun using economic integration as weapons, tariffs as leverage. Financial infrastructure as coercion. Supply chains as vulnerabilities to be exploited.

“You cannot live within the lie of mutual benefit through integration when integration becomes the source of your subordination… If we are not at the table, we are on the menu.”

Besides exercising overwhelming military superiority, Trump 2.0 has increasingly weaponised rules, agreements and economic relations to its advantage.

The abandonment of ‘soft power’ – accelerated by Elon Musk’s DOGE – has ripped the velvet glove off US ‘hegemony’, exposing the mailed fist beneath.

USAID and other US government-funded agencies and programmes have been crucial for soft power, fostering the illusion of domination with consent. Abandoning soft power may well increase the costs of achieving America First.

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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.

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Credit: Sanjit Pariyar/NurPhoto via AFP

By Andrew Firmin
LONDON, Mar 25 2026 (IPS)

Less than six months after Nepal’s Generation Z rose up in protest, the country has a new prime minister. A 35-year-old former rapper who soundtracked the protests swept to power in a landslide in the 5 March election.

Balendra Shah defeated former prime minister KP Sharma Oli, whose third stint as prime minister was cut short by the protests, beating him in his own turf. After years of fragile coalition governments, in which Sharma Oli and two other men of advancing age repeatedly swapped the role of prime minister, Nepal has chosen to change direction.

Gen Z-led protests

The September 2025 protests were triggered by the government’s banning of 26 social media platforms in an evident response to the ‘nepokids’ trend, in which people used social media to satirise the ostentatiously wealthy lifestyles of politicians’ family members, while most young people experienced daily economic struggles amid high inflation and youth unemployment. In a country where the median age is just 25, the ban was the final straw, activating long-simmering anger about corruption, poor public services and a political system that refused to listen to young people.

When young people took to the streets, the state unleashed violence. The deadliest day was 8 September, when some protesters broke into the parliamentary complex and police fired live military-grade ammunition, shooting many victims in the head. Nineteen people died that day, and overall at least 76 people died in the protests.

Rather than silence the protests, the state’s lethal crackdown swelled them, making clear this was about more than the social media ban; it was a struggle for Nepal’s future. Even more people took to the streets. On 9 September, Sharma Oli resigned. Some protesters turned to violence, while the army took over security and imposed a nationwide curfew. But events soon took a decisive turn. Chief Justice Sushila Karki was sworn in as interim prime minister on 12 September, kickstarting a process that led to the election. The interim government agreed to establish a Gen Z Council, a formal body designed to bridge the gap between the government and young people and enable them to hold it accountable and monitor implementation of reforms.

As the latest State of Civil Society Report sets out, Nepal’s movement inspired many of the year’s other Gen Z-led mobilisations. Nepali activists used the gaming platform Discord, including for a radical exercise in democracy that saw 10,000 people take part in online discussions that put forward Karki as interim prime minister. Morocco’s protesters also used Discord to coordinate their actions, while the Gen Z movement in Madagascar, where the army ultimately forced the government to quit, connected with Nepal’s Discord communities to learn from their organising. Movements in several countries adopted Nepal’s protest symbol, the skull-and-straw-hat flag from the One Piece manga, identifying themselves as part of the same global movement.

Around the world, Gen Z-led protests have commonly faced violent state repression but have forced real concessions: Bulgaria’s government quit, while politicians dropped unpopular policies in Indonesia and Timor-Leste. In Bangladesh, where a Gen Z-led protest movement ousted an authoritarian government in 2024, the country recently held its first credible election in almost two decades.

Time for change

The new energy unleashed by Nepal’s Gen Z-led protests was reflected in the registration of over 800,000 new voters, more parties standing than ever before, a profusion of younger candidates and an election campaign focused on corruption and good governance.

The result was a shock. Coalition governments are the norm in Nepal, but the centrist Rastriya Swatantra Party (RSP) won an outright majority, taking 182 of 275 House of Representatives seats after a campaign that made intensive use of social media. The three established parties all sustained heavy losses.

Shah used his music to attack corruption and inequality, resonating with the Gen Z movement during the protests, when one of his songs was viewed over 10 million times on YouTube. But he isn’t a completely new political figure, having become mayor of the capital, Kathmandu, in a surprise result when he ran as an independent in 2022. His track record there suggests grounds for concern. He’s rarely made himself available for media questioning, preferring to communicate directly via social media, where he’s known for making controversial outbursts. He also received criticism for deploying police against street vendors and launching ‘demolition drives’ to clear illegally built structures with minimal notice, leading to clashes between police and locals.

Shah now has a mandate to deliver change, and expectations are high. But he faces the challenge of reforming a typically resistant bureaucracy while delivering on his economic promises amid difficult global conditions worsened by the Israeli-US war on Iran, which threatens the remittances sent by the many Nepali workers based in Gulf countries, which constitute one quarter of the country’s GDP. He’ll need to navigate the difficult foreign policy balance between Nepal’s two powerful and often antagonistic neighbours, China and India. The new government must also ensure accountability for human rights violations during the 2025 protests, starting with releasing the report of a commission set up to investigate protest deaths, which hasn’t yet been made public.

The obvious danger, given these challenges and an outsized mandate, is that the government will adopt a heavy-handed approach, pushing through change while failing to listen. This is precisely when civil society is needed, to step in to hold the new government to account and ensure it respects human rights, including the right to keep expressing dissent.

Nepal’s Gen Z movement must guard against co-option by the new administration. The new government must acknowledge the vital role of Nepal’s outspoken young generation by moving quickly to form and resource the Gen Z Council and fully respecting its autonomy. The movement that helped bring Shah to power must stay engaged.

Andrew Firmin is CIVICUS Editor-in-Chief, co-director and writer for CIVICUS Lens and co-author of the State of Civil Society Report.

For interviews or more information, please contact research@civicus.org

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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.

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The Sindh government has started distributing solar home systems to 200,000 low-income households under the Sindh Solar Energy Project to improve electricity access. Credit: Sindh People’s Housing for Flood Affectees

By Zofeen Ebrahim
KARACHI, Pakistan, Mar 20 2026 (IPS)

Energy expert Vaqar Zakaria believes solar power makes “excellent economic sense” – and he lives by it. For over five years, his rooftop panels have slashed his bills, sometimes to zero, even allowing him to sell surplus electricity back through net metering.

Last month, he took it further. After buying two electric vehicles, he has almost “declared independence” from the national grid. With more panels and doubled batteries, even his cars run on sunshine. “I am moving away from their fuel, and I don’t need their power,” said the CEO of Hagler Bailly, Pakistan, an Islamabad-based environmental consultancy firm, over the phone from Islamabad.

“I call it the hand of God driving my car,” Zakaria said.

He is already seeing economic gains from his investment. “The electricity I generate, including battery costs, comes to about Rs 12 (USD 0.043) per unit, while it can be sold to the Islamabad Electric Supply Company at around Rs 26 (USD 0.092) per unit.” However, he adds that he does not currently claim this benefit, as it requires considerable follow-up.

Doing some quick back-of-the-envelope calculations, he compared the petrol-run vehicles he used until a few months back to the EV he purchased a month ago. “The total cost of operating the EV comes to about Rs 2 (USD 0.0071) per km using power generated at home, compared to the Rs 27 (USD 0.096) per km I was paying earlier for running vehicles on the fossil fuel.”

This figure does not include the regular maintenance costs his earlier cars required—lubricating oils, oil and air filters, and brakes.

“An EV requires near-zero maintenance,” he added.

Vaqar Zakaria’s white EV charges under rooftop solar panels at his home — powered by the sun. Credit: Vaqar Zakaria

While Zakaria can afford a full shift off the grid, most households cannot.

“The solar landscape will remain unchanged unless power companies introduce profit-sharing models that turn consumers into ‘prosumers’ – both producers and users of energy – supported by microfinance to help cover upfront costs,” he said. Achieving this would require the privatisation of utilities.”

For now, with or without batteries, solar energy has become a popular alternative for many households. “What’s happening in Pakistan is quite significant, as electricity consumers’ dependence on the national grid is falling,” explained Rabia Babar, data manager at Renewables First, an Islamabad-based think-and-do tank for energy and environment.

Grid-based electricity demand, she pointed out, dropped 11 percent in FY25 compared to FY22 levels, largely because more people and businesses are switching to solar.

“During the day, far less electricity is being drawn from the grid, which means gas-fired power plants are being used much less than before.”

More than 100 young Pakistani women from across the country have been trained in and certified in solar roof installation by LADIESFUND Energy Pvt Ltd through Dawood Global Foundation’s Educate a Girl programme. They have solarised a women’s shelter, a church and an orphanage. Credit: LADIESFUND Energy (Pvt.) Ltd

The Turning Point

Haneea Isaad, an energy finance specialist at the Institute for Energy Economics and Financial Analysis, recalled the time in 2022, as the turning point when people realised they needed a cheaper alternative. “The prices of liquefied natural gas shot up after Russian forces entered Ukraine and the country faced a gas shortage, resulting in widespread power outages. Electricity prices almost tripled in just a couple of years.”

Those who could afford to, Isaad said, opted for a one-time investment in installing solar panels instead of paying for expensive and unreliable electricity.

According to EMBER,  an independent clean energy think tank, solar’s share in the energy mix has risen from 2.9 percent in 2020 to 32.3 percent by the end of 2025.

It is this quiet solar revolution that may help ride out the current energy crisis triggered by the United States-Israel war on Iran, which led to the shutting of the Strait of Hormuz, according to a report by Renewables First and the Centre for Research on Energy and Clean Air, published earlier this week.

“Pakistan’s solar revolution is quietly redrawing the country’s energy map, cutting grid dependence, reducing LNG exposure, and building a buffer against global market shocks that most of its neighbours are yet to find,” said Babar, one of the co-authors of the report.

A house in rural Gilgit with solar panels. Credit: SHAMA Solar.

In fact, the report says that Pakistan has avoided over USD 12 billion in oil and gas imports since 2020 due to its rapid solar growth – and could save another USD 6.3 billion in 2026 alone at current prices.

Lead analyst Lauri Myllyvirta, co-founder of CREA, said the solar boom has cut import bills and now acts “like an insurance policy” against oil and LNG shocks from the Gulf.

Industries are also turning to solar, significantly reducing their need for LNG significantly.

“This shift has had a direct impact on government policy. Pakistan has gone back to its LNG suppliers to renegotiate long-term contracts for the diversion of surplus cargoes to international markets, which are now oversupplied due to the sharp reduction in gas consumption,” said Babar.

Pakistan has been importing LNG since 2015, after domestic reserves declined. It has been mainly used in the power sector – accounting for nearly a quarter of Pakistan’s electricity supply – followed by the industrial sector.

Supplied from Qatar via the Strait of Hormuz, LNG has become less attractive due to high prices for industry and the growing shift to solar in homes. With some LNG landing in Pakistan before the conflict began and domestic gas filling the gap from affected cargoes, supplies may be enough to last until mid-April.

“Pakistan has historically been vulnerable to volatile global LNG prices, which strain on foreign exchange reserves when prices spike,” Babar said.

Isaad agreed. “Solar has provided a buffer. With the power sector also relying on coal imports from Indonesia and South Africa, supply pressures are unlikely to pose a problem in the near term. Seasonal hydropower and mild weather are also likely to prevent an immediate spike in LNG based power demand. For now, Pakistan has been spared – unlike Bangladesh and India, which have been hit the hardest in South Asia.”

Not Out of the Woods Yet

But the solar panels have not shielded Pakistanis from the rising oil prices. The country saw a 20 percent jump – the highest in its history – with petrol and diesel costing USD 1.15 and USD 1.20 per litre, respectively. As transport drives the economy, higher oil prices quickly pushed up fares and the cost of groceries.

In response, Zakaria said the crisis highlights a clear path forward: embrace EVs, reduce diesel dependence, and expand renewables. “Begin with two-wheelers,” he suggested, though a full EV mass transit system would be ideal for Pakistan. He added that shifting freight from trucks to rail could significantly cut fuel costs.

He said he supports the oil rationing and austerity measures taken by the government.

Last week, addressing the nation, Prime Minister Shehbaz Sharif announced these measures on television.

“The entire region is currently in a state of war,” he said, outlining steps, including a four-day workweek for government employees and spring holidays for schools from March 16 to the end of the month. He also said 50 percent of government staff would work from home on a rotating basis and recommended similar arrangements for the private sector.

Higher education institutions have shifted to online classes to save fuel, as have meetings across federal and provincial governments. Fuel allowances for government offices have also been reduced.

Under the government’s austerity measures, federal and provincial cabinet members will forgo two months’ salaries and allowances, while lawmakers’ pay will be reduced by 25 percent. Ministers, parliamentarians, and officials may travel abroad only when essential — and must fly economy. Weddings will be capped at 200 guests, served with a single-dish meal.

The Human Cost

But these measures have brought little relief to Saba Nasreen’s household finances. The 52-year-old mother of two, who works as a domestic help, said, “Rising fuel prices have literally crippled us; when fuel costs go up, food prices follow. We hardly buy fruit or meat; now even milk and vegetables are beyond our range,” she said.

With Eid ul-Fitr—the Muslim festival marking the end of Ramadan—just days away, she said, “This will be the first Eid in as long as I can remember that I won’t be making sheer khurma for my daughters,” referring to the traditional sweet vermicelli dish prepared in many Muslim households across the subcontinent. “The price of a box of vermicelli has doubled this year, from Rs 150 (USD 0.53) to Rs 300 (USD 1.07),” she said, adding, “In any case, the attack on Iran has already dimmed our festivities; I’m not happy inside, my heart feels heavy.”

For many, the solar revolution offers hope — but for households like Nasreen’s, the struggle continues.

IPS UN Bureau Report

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Credit: Marcelo Del Pozo/Reuters via Gallo Images

By Andrew Firmin
LONDON, Mar 16 2026 (IPS)

Once again, global oil prices are spiking, driven by the Israeli-US war against Iran. With Iran retaliating by attacking infrastructure and transport hubs and blocking the Strait of Hormuz, through which one-fifth of the world’s oil passes, oil supplies from the region are being choked, pushing up prices. The cost of a barrel of Brent crude – the international benchmark for oil prices – stood at US$73 before the conflict but has surged beyond US$100 since. It could go higher still as war continues.

The impacts are already being felt when drivers fill up their petrol- and diesel-powered vehicles. But they go much wider. Bigger household energy bills will likely result, while businesses will pass on their increased costs in the form of higher prices. Russia’s 2022 full-scale invasion of Ukraine sent oil prices soaring and sparked a global cost-of-living crisis, and now, as many economies seemed to be recovering, the war in the Gulf has brought another shock. Impacts could be political as well as financial: in numerous countries, the cost-of-living crisis helped drive voters towards right-wing populist and nationalist politicians. Recent years have seen Gen Z-led protests erupt in countries around the world, fuelled in part by young people’s anger at failing economies.

In a world increasingly characterised by conflict and with powerful states tearing up the international rulebook in pursuit of material interests, more oil shocks and big economic and political impacts seem inevitable. Governments typically react with economic policies that fail to protect those with the least, and by meeting political unrest with repression. They should consider another way.

The world will remain vulnerable to oil price shocks only for as long as it stays dependent on oil. The climate crisis compels a rapid move away from fossil fuel dependency to abate the worst impacts of global heating. Increasingly, this should also be seen as a matter of economic and political security.

Some steps have been taken in the right direction. Renewables now provide over 30 per cent of global electricity. Investments in renewables more than double those in fossil fuels. But fossil fuel companies have immense power and are determined not to give it up. That was reflected in the fact that 1,600 fossil fuel lobbyists attended the latest global climate summit, COP30 in Brazil, and succeeded in preventing any new commitment to end fossil fuel extraction. Their power is shown in the lawsuit an oil company brought against Greenpeace, leading to a widely criticised trial in North Dakota, USA, with the campaigning organisation facing a punitive US$345 million damages bill. Their influence was reaffirmed by Donald Trump’s election win, after a campaign in which fossil fuel companies gave US$450 million in donations to Trump and his allies – and they were rewarded by US intervention in Venezuela.

Fossil fuel companies are determined to hold back the tide of renewables for as long as possible, because every day of delay is another day of profit, even though every fraction of a degree of temperature rise means avoidable suffering for millions of people. Delay is the new climate denial.

As the latest State of Civil Society Report points out, civil society’s working to make the difference, urging governments to hasten the transition and calling on global north states to make funding available for global south states to decarbonise and adapt to climate impacts. Civil society is exposing the environmental devastation caused by extraction and the complicity of fossil fuel companies in human rights abuses. Its strategies include advocacy, public campaigning, protests, direct action and, increasingly, litigation.

In 2025, climate litigation scored some big successes. The International Court of Justice (ICJ) issued an unprecedented advisory opinion, ruling that states have a legal duty to prevent environmental harm, which requires them to mitigate emissions and adapt to climate change. This victory originated in civil society: in 2019, student groups from eight countries formed the Pacific Islands Students Fighting Climate Change network to persuade their governments to seek an ICJ ruling.

Following extensive civil society engagement, the Inter-American Court of Human Rights issued a similar ruling. The African Court for Human and Peoples’ Rights is set to issue its advisory opinion following a petition brought by the African Climate Platform, a civil society coalition.

These rulings can seem symbolic, but they strengthen national-level efforts to hold states and corporations accountable. These have paid off recently too. In 2025, two South African groups stopped an offshore oil project after a court found its environmental assessments were deeply flawed. More litigation is coming, including in New Zealand, where civil society has filed a lawsuit after the government weakened its emissions reduction plan.

But civil society faces a backlash. Around the world, climate and environmental activists and their allies, Indigenous and land rights defenders, experience severe state and corporate repression.

Last year in Uganda, authorities arrested 11 activists for protesting against the construction of the East African Crude Oil Pipeline. In Peru, police used teargas and non-lethal weapons against people blocking a road to protest against a mine. In Cambodia, five young activists from the Mother Nature environmental group have been in jail since July 2024.

The French government has repeatedly vilified environmental campaigners and deployed police violence against protests, while last year the German government launched an inquiry into public funding of environmental groups and the Dutch parliament adopted a motion condemning Extinction Rebellion and urging the removal of its tax-exempt status.

As the latest oil price shocks reverberate around the global economy, governments should learn the lessons. As economies deteriorate, the temptation will be to say that transition is a luxury, something that can be put off even further. This is the wrong lesson: recent research in the UK suggests that the cost of achieving net zero will be about the same as the cost of another oil price crisis. Economic and political security lies in ending fossil fuel dependency as quickly as possible. To learn the right lessons, governments should stop repressing climate activism and instead listen to and work with civil society.

Andrew Firmin isCIVICUS Editor-in-Chief, co-director and writer for CIVICUS Lens and co-author of the State of Civil Society Report.

For interviews or more information, please contact research@civicus.org

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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

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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

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Despite lacking both evidence and theory, many economists claim trade liberalisation accelerates development. But only a few economies have gained many jobs from external market access.

Jomo Kwame Sundaram

Multilateral trade liberalisation
In conventional trade theory, gains from trade liberalisation are mainly one-time increases in output and exports due to static comparative advantage.

Post-World War Two (WWII) US foreign policy transformed multilateral relations and transnational institutions, including international economic governance.

With the growing power of transnational corporations, many multilateral institutions, including the United Nations system, have been reconfigured or marginalised.

The General Agreement on Tariffs and Trade (GATT) was a ‘second-best’ compromise after the US Congress vetoed the creation of the International Trade Organisation, despite widespread international enthusiasm for the 1948 Havana Charter.

Almost half a century later, the World Trade Organisation (WTO) was established in 1995, following the 1994 Marrakesh Declaration concluding the Uruguay Round of GATT negotiations.

Trade mahaguru Jagdish Bhagwati argued that multilateral trade has been undermined by plurilateral and bilateral arrangements favouring dominant partners.

With the era of trade liberalisation essentially over since the 2008-09 global financial crisis (GFC), free trade advocacy has received a new lease of life from mythmaking about the ‘pre-Trump’ era.

Uneven, mixed effects
Mainstream trade theory does not entertain the possibility of ‘unequal exchange’, however defined.

Nor does it even incorporate Bhagwati’s notion of ‘immiserising growth’ when productivity gains reduce prices for consumers, rather than increase producers’ earnings.

The three decades of trade liberalisation from the 1980s saw slower, but more volatile growth than the post-WWII quarter-century termed the ‘Golden Age’. More recently, stagnationist tendencies have dominated since the GFC.

With trade liberalisation, many developing countries have experienced greater food insecurity and deindustrialisation, as the manufacturing shares of their national income shrank.

Much import-substituting industrialisation after WWII or independence has since collapsed. Besides resource processing, very few new industries have emerged in Africa.

‘Aid for Trade’ for poorer developing countries implicitly acknowledges trade liberalisation’s adverse effects by mitigating some of them. Why then should they abandon protectionism if they need to be compensated for doing so?

Wealthy nations have also insisted that developing countries end manufacturing tariffs. But as Dani Rodrik has quipped, why rich nations “need to be bribed by poor countries to do what is good for them is an enduring mystery”.

African nations and Caribbean and Pacific small island developing states enjoyed preferential access to European markets, which full multilateral trade liberalisation would eliminate.

Such preferences for Sub-Saharan Africa have pitted African against Asian least developed countries, undermining the collective negotiating strengths of both.

Many countries had expected the current Doha Round to eliminate rich nations’ producer subsidies, tariffs, and non-tariff barriers, but that has not happened.

Cutting farm support in the North could make food agriculture in developing countries more viable, but would also raise food import prices in the interim.

World Bank ‘structural adjustment’ programmes and IMF fiscal discipline requirements have undermined rural infrastructure and productivity, setting back smallholder agriculture in most developing countries.

Setbacks, not gains
Trade liberalisation also reduces tariff revenue. Such losses have hurt developing nations, especially the poorest, for whom tariffs often accounted for up to half of all tax revenue.

Such revenue cuts severely undermined the fiscal means of developing nations, crucial for government spending and investment, including for development and welfare.

Most governments are unable to replace lost tariff revenue with new or higher taxes. Meanwhile, more borrowing to offset lost tariff revenue has worsened indebtedness.

Trade liberalisation advocates are typically vague about how it is supposed to raise exports, incomes, and tax revenue, besides compensating for lost tariff revenue.

Instead, tax burdens typically become more regressive as overall tax revenue declines. Real consumption is supposed to rise as import prices fall with lower tariffs, but could also decline due to increasing consumption taxes.

Less policy space
Trade liberalisation has also reduced available development policy tools, especially those relating to trade, investment, and industrialisation.

The constraints imposed by trade liberalisation and investment agreements have generally limited the scope for and potential of development policy initiatives.

The actual role and impact of trade policy for growth and employment remain moot. But there are no analytical reasons or robust empirical evidence that trade liberalisation per se ensures sustainable development.

World Bank and most other studies acknowledged modest, if not negative, net gains for most developing countries from any realistically achievable outcome.

It is often ignored that realistic expectations of gains from trade liberalisation rely crucially on a strong positive export supply response.

However, such a response is unlikely when internationally competitive, productive and export capacities do not already exist, as in most developing countries, especially the poorest.

Hence, most of the Global South has not been able to overcome the worst consequences of trade liberalisation to achieve sustainable development.

In any case, the WTO Doha Round talks were ended by rich nations in 2015.

With the increasingly blatant self-interested contravention of WTO rules by the US, European and other wealthy nations, developing countries may best enhance their development prospects by reverting to GATT rules.

This would allow them to opt in, as appropriate, rather than resign themselves to the uniform ‘one size fits all’ WTO rules and regulations, regardless of context, circumstances, capacities and capabilities.

IPS UN Bureau

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After condemning pragmatic responses to the 1997-98 Asian financial crises, the West pursued similar policies in response to the 2008 global financial crisis without acknowledging its own mistakes.

Jomo Kwame Sundaram

US exports could barely compete internationally, particularly with Germany and Japan. During his first term, Trump initially pursued a strong dollar policy, which undermined exports and encouraged imports.

The September 1985 ‘Plaza Accord’ among the G7 grouping of the world’s largest economies, held at New York’s Plaza Hotel, agreed that the Japanese yen and the Deutsche mark must both appreciate sharply against the US dollar.

The ‘strong yen’ period, or endaka in Japanese, ensued for a decade until mid-1995. This made Japanese imports less competitive, enabling the Reagan era boom.

By accelerating reunification with the East and the new euro currency, German Chancellor Helmut Kohl prevented the mark strengthening as much as the yen.

Thus, Germany avoided the Japanese catastrophe after its decades-long post-war miracle ended abruptly with the disastrous 1989 Big Bang financial reforms.

Liberalising capital flows
As the IMF urged national authorities to abandon capital controls, East Asians borrowed dollars, expecting to repay later on better terms.

Meanwhile, the dollar only stopped weakening after the US allowed Japan to reverse yen appreciation in mid-1995.

Under Managing Director Michel Camdessus, the IMF began pushing capital account liberalisation. This contradicted the intent of the Fund’s sixth Article of Agreement, affirming national authorities’ right to manage their capital accounts.

Despite considerable evidence to the contrary, Camdessus’ IMF preached the ostensible virtues of capital account liberalisation.

East Asian emerging financial markets were initially delighted by the significant capital inflows before mid-1997. After the strong yen decade, the US dollar appreciated from mid-1995.

When financial inflows reversed after mid-1997, some East Asian monetary authorities were unable to cope and turned to the IMF for emergency funding .

Many paths to crises
The Asian financial crisis is typically dated from 2 July 1997, when the Thai baht was ‘floated’ and its value quickly fell without central bank support. The ensuing panic quickly spread like contagion across national boundaries via financial markets.

Financial investors – in Bangkok, Singapore, Hong Kong, Tokyo, London and New York – hastily withdrew their funds, often mindlessly following perceived ‘market leaders’ without knowing why, like animal herds in panic.

Funds fled economies in the region, like frightened audiences in a dark theatre hearing a fire alarm. Capital even fled the Philippines, which had received little finance, because it was in Southeast Asia, the ‘wrong neighbourhood’.

After earlier celebrating Malaysia, Indonesia, and Thailand as ‘East Asian miracle’ economies, confidence in Southeast Asian investments fell suddenly.

Central banks in the region were sceptical of IMF prescriptions but believed they had little choice but to comply.

Press photographs showed Camdessus standing sternly, with arms folded like a displeased schoolmaster, over the Indonesian President bowing deeply to sign the IMF agreement.

This humiliating image probably expedited Soeharto’s shock resignation soon after, in mid-1998, over three decades after he seized power in a brutal military putsch in September 1965.

Following an earlier financial crisis, a 1989 Malaysian law had prohibited some risky banking and financial practices, but the authorities sought to attract foreign investments into its stock market.

Thailand had become vulnerable by allowing borrowers direct access to foreign banks through the Bangkok International Banking Facility and its provincial counterpart.

Debtors could thus bypass central bank regulation and supervision. The Thai currency float prompted massive funds outflows from the country.

As market confidence waned, funds fled Malaysia’s bourse, triggering a massive collapse in the currency’s value against the dollar, which had steadily weakened against the yen between 1985 and 1995.

Following massive capital outflows, Malaysia finally introduced capital controls on outflows from September 1998, fourteen months after the crisis began!

The controls enabled Malaysia to stabilise its currency and the economy temporarily, but also ended the earlier decade of accelerated industrialisation and growth.

Learning from experience
Rather than acknowledge and address the worsening problem due to earlier capital account liberalisation, the Fund made things worse with its prescriptions.

It insisted on keeping capital accounts open and raising interest rates to reverse outflows. This slowed economic growth as borrowing – and hence, both spending and investing – became more costly.

As investment and spending are necessary for economic growth, IMF prescriptions exacerbated the problems instead of providing a solution.

The East Asian financial crisis was undoubtedly avoidable. Experience has shown that financial markets and capital flows do not function as mainstream theories claim.

Thus, financial dogma and its influence on economic theory and policy obscured more realistic understanding of how markets actually operate and the ability to develop more pragmatic and appropriate policy alternatives.

History never fully repeats itself. But better policymaking for financial crisis avoidance and recovery will only emerge from more informed, historically grounded analysis.

IPS UN Bureau

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While US President Donald Trump has blamed the BRICS and foreign investors for de-dollarisation, his rhetoric, actions and policy measures are mainly responsible for the trend’s recent acceleration.

Jomo Kwame Sundaram

Despite some temporary reversals, the dollar’s post-World War II role as world reserve currency has gradually declined over the decades, especially since the 1970s. Ben Norton has argued that several Trump measures have accelerated this trend.

Trump claims his supposedly ‘reciprocal tariffs’ will reduce the US trade or current account deficit with the rest of the world. But if countries cannot export to the US, they cannot earn dollars to meet their trade and investment needs.

Many believe Trump’s tariffs and other threats are enhancing US leverage vis-à-vis others, but their reactions, including defensive countermeasures, are accelerating de-dollarisation.

Trump’s measures, such as his insistence on bilateral negotiations, have alarmed most nations, including long-time allies. As nations, including allies, rethink their economic relations with and vulnerability to the US, de-dollarisation inadvertently accelerates.

Trump vs the Fed
The US Federal Reserve Bank’s overnight lending or funds rate has been higher since 2022, responding to higher consumer price inflation following the pandemic and the Russian invasion of Ukraine.

As the Fed raised interest rates, yields on US government debt rose. But Trump now wants the Fed to cut interest rates to reduce the high debt servicing costs of both the government and private corporations.

In 2024, the US federal government paid about 3% of GDP in debt interest alone. Although such debt exceeds 120% of GDP, debt service costs are deemed manageable as long as interest rates remain low.

Trump’s pressures on the Fed to cut interest rates have inadvertently undermined investor confidence and prompted ‘flights [from dollar assets] to safety’.

Trump’s recent campaign against his earlier Fed chair appointee, Jerome Powell, has inadvertently raised investor concerns about his espoused monetary policy priorities.

Inflation fears persist
Investors now worry that Trump is pressuring the Fed to cut interest rates. They believe this will stoke inflation and cause the dollar to fall against other major currencies. As Trump is seen forcing down interest rates, he risks being blamed for persistent inflation.

If the Fed buys US Treasuries to reduce yields, for a new round of ‘quantitative easing’ (QE), dollar asset investments will realise lower, if not negative, real yields.

Although inflation hawks’ worst fears of higher inflation have not materialised so far, few believe tariffs will not raise inflation.

Expecting Trump 2.0 to impose more tariffs, many US companies stockpiled imports before April 2. As tariffs took effect and stocks declined, prices rose.

Many investors have sold their dollar assets as monetary authorities worldwide seek alternatives to the greenback. Such sell-offs lower the dollar’s value, further spurring de-dollarisation.

Trump now wants to lower US Treasury bond yields as foreign governments and investors seek alternatives to holding dollar assets.

Many are considering switching to non-dollar assets despite stagnation tendencies elsewhere in the Global North, especially in Europe and Japan. If investors stop buying dollar assets or sell them to purchase non-dollar assets, de-dollarisation will gain momentum.

Foreign demand falling
Washington is understandably worried that foreign investors will dump Treasury securities. In 2015, a third was held by foreigners, but this has since fallen to under a quarter.

The ‘Mar-A-Lago Accord’ proposal, which requires foreign governments to hold US Treasury ‘century bonds’ for 100 years despite assured losses, will compound resentment.

Lowering Treasury bond yields is both risky and difficult due to the highly financialised US economy. Past bond market turmoil has triggered stock market selloffs, lowering Treasury yields, share prices and tax revenue.

Government and corporate borrowing costs rise together. As trillions of dollars’ worth of corporate bonds mature over the next two years, high interest rates will raise corporations’ borrowing costs. Many want to refinance at lower interest rates.

These efforts to bring down interest rates are apparent to all. But lower interest rates and negative ‘actual yields’ for Treasury securities will ensure high inflation persists.

De-dollarisation accelerating?
Trump’s actions, especially threats of tariffs and sanctions, have elicited diverse reactions, often undermining dollar hegemony and accelerating de-dollarisation.

Many recent developments have undermined public confidence in the US government and the rule of law, accelerating de-dollarisation.

As investors sold US assets in mid-2025, the dollar saw its biggest fall since the 1973 oil price hike. It fell by over 10% against other major currencies, triggering temporary falls in the prices of many financial assets, including equities and bonds.

Since then, there has been increased capital market uncertainty and volatility, as in the US bond market, although a strong rally followed the ensuing stock market crash.

In many recent episodes of financial volatility, dollar liquidity was considered the safe option. But in 2025, confidence in dollar assets fell, prompting selloffs and de-dollarisation.

Thus far, Trump has been adept at managing short-term volatility, but his style implies no one knows when the music will stop.

IPS UN Bureau

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United Nations Secretary-General António Guterres addresses the high-level pledging event on the Central Emergency Response Fund (CERF) 2026. Credit: UN Photo/Mark Garten

By Oritro Karim
UNITED NATIONS, Dec 16 2025 (IPS)

2025 has been an especially turbulent year for humanitarian aid operations as global aid budgets have experienced record declines in funding. As conflicts, environmental disasters, and economic crises intensify and disproportionately impact the world’s most vulnerable communities, the resources available in global emergency funds are falling far short of rapidly growing needs.

For 2026, humanitarian agencies project that even more people may be left without critical support if funding gaps continue to widen. In response, the United Nations (UN) and its partners are urgently calling on the international community to mobilize increased support for its Central Emergency Response Fund (CERF) at an annual pledging event to commemorate the fund’s 20th anniversary on December 12.

“The humanitarian system’s tank is running on empty – with millions of lives hanging in the balance,” said UN Secretary-General António Guterres. “This is a moment when we are asked to do more and more, with less and less. This is simply unsustainable.”

According to figures from the Office for the Coordination of Humanitarian Affairs (OCHA ), the UN aims to save 87 million lives next year, which will require approximately USD 23 billion in funding. In addition, the agency seeks to raise about USD 33 billion to support 135 million people across 50 countries through 23 national aid operations, along with six additional operations dedicated to refugees and migrants.

Despite the urgent global need for increased support, funding for humanitarian appeals has faltered more steeply than ever before, with contributions for budgets at the lowest levels recorded in decades. The appeal for 2025, which called for USD 12 billion, reached roughly 25 million less people than the previous year.

OCHA recorded a multitude of immediate consequences around the world– including an exacerbation of the global hunger crisis, increasingly strained health systems to the point of near collapse, the erosion of critical education programs, and a considerable blow to protection services for vulnerable displaced communities facing protracted armed conflicts. In some contexts, it has been increasingly dangerous for aid workers, with more than 320 killed this year amid what officials describe as an “utter disregard for the laws of war”.

“So when we’re needed at full strength, the warning lights are flashing,” said Tom Fletcher, UN Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator. “It’s not just a funding gap – it’s an operational emergency. And if the CERF falters, then the world’s emergency service will falter. And the people who rely on us will suffer.”

With resources in desperately short supply, the UN and its partners have been forced to scale back certain lifesaving services to prioritize others, leaving urgent humanitarian crises critically underfunded. Due to these strategic allocations, the UN has been largely unable to assist numerous displaced communities fleeing from conflict in Darfur, Sudan– which has been described as “the epicenter of human suffering.”

“As you’ve heard and as you know, the brutal cuts that we’re experiencing have forced us to make brutal choices, a ruthless triage of human survival,” Fletcher added. “This is what it means when we put power before solidarity and compassion.”

UN officials also underscored the extreme importance of CERF, as the fund has acted as a lifeline for vulnerable communities around the world for decades, delivering over USD 10 billion worth of aid in more than 110 countries since 2006. Through these efforts, CERF has acted as a “rapid and strategic” source of financing that reached struggling civilians before other sources, saving countless lives.

According to Guterres, “in many places, CERF has made the difference between life-saving help and no help at all.” Earlier this year, when humanitarian operations were allowed to resume in the Gaza Strip, CERF helped deliver vital fuel supplies to hospitals, restore water and sanitation systems, and reinforce other essential lifesaving services.

In 2025, CERF invested nearly USD 212 million to sustain relief efforts across underfunded crises. The UN also announced an additional allocation of USD 100 million to meet critical needs—including those of women and girls—in severe crises in Burkina Faso, the Democratic Republic of the Congo, Mali, Haiti, Myanmar, Mozambique, Syria, among others.

To date, CERF has supported millions of people across 30 countries and territories through a total allocation of USD 435 million. These funds have ensured the scale-up of humanitarian efforts in Gaza following the implementation of the ceasefire, and provided critical assistance to those fleeing armed conflict in Darfur.

These efforts by CERF solidify the center of the “humanitarian reset” that the UN foresees for 2026. “And that’s why the Humanitarian Reset matters: not a slogan, but a challenge to us all,” added Fletcher. “A mission, but also a survival strategy for the work we do and for so many people. It’s about being smarter, faster, closer to the communities we serve, more honest about the difficult trade-offs that we face. Making every dollar count for those we serve.”

The UN’s largest individual humanitarian response plan in 2026 will focus on the Occupied Palestinian Territory, which requires roughly USD 4.1 billion to assist roughly 3 million people who have experienced catastrophic levels of violence and destruction. Other response efforts will target Sudan—the world’s largest displacement crisis—which requires USD 2.9 billion to assist 20 million people, and Syria, which requires USD 2.8 billion to help 8.6 million people.

With funding for CERF at its lowest projected levels in over a decade, the UN seeks a funding target of USD 1 billion, and will begin appealing to its member states for support. Countries are also being urged to use their influence to bolster protection measures for civilians and humanitarian workers, as well as to reinforce accountability mechanisms for perpetrators of armed violence.

“We have to imagine, even now, in this tough moment for humanitarian funding, what the next 20 years could look like with a fully funded CERF,” said Fletcher. “A fund that makes the UN faster, smarter, more cost-effective, greener, more anticipatory, more inclusive. A fund that amplifies the voices of communities and proves that solidarity still works. Backed by a movement of citizens who believe in that solidarity.”

IPS UN Bureau

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By Rabab Fatima
UNITED NATIONS, Dec 1 2025 (IPS)

As we gather in Doha for the High-Level Meeting on “Forging Ambitious Global Partnerships for Sustainable and Resilient Graduation of Least Developed Countries,” the stakes could not be higher. A record number of fourteen countries-equally divided between Asia and Africa are now on graduation track. Graduation from the Least Developed Country (LDC) category is a landmark national achievement—a recognition of hard-won gains in income, human development, and resilience. Yet, for too many countries, this milestone comes with new vulnerabilities that risk undermining the very gains that enabled graduation.

Since the establishment of the LDC category in 1971, only eight countries have graduated. Today, 44 countries remain in the group, representing 14% of the world’s population, but contributing less than 1.3% to global GDP. The Doha Programme of Action (DPoA) charts an ambitious yet achievable target: enabling at least 15 additional countries to graduate by 2031. But as the DPoA underscores graduation must be sustainable, resilient and irreversible. It must serve as a springboard for transformation— not a moment of exposure to new risks.

USG Rabab Fatima

Yet within these challenges also lie opportunities. With the right policies, partnerships, and incentives, graduation can catalyse deeper structural transformation, expand access to new financing windows, strengthen institutions, and unlock pathways to diversified, resilient, and inclusive growth. The task before us is to manage risks while harnessing these opportunities—ensuring that no country graduates without momentum.

Smooth Transition Strategies: A National Imperative
The DPoA calls for every graduating country to develop inclusive, nationally owned Smooth Transition Strategies (STS) well-ahead of the graduation date. These strategies must be fully integrated into national development plans and SDG frameworks, ensuring coherence and resilience. They should prioritize diversification, human capital investment, and adaptive governance, while placing women, youth, and local actors at the center of design and oversight. STS must be living documents—flexible, participatory, and backed by robust monitoring and financing.

Reinvigorated Global Partnerships: The essential Pillar
No country can navigate this transition alone. The Doha Programme of Action calls for an incentive-based international support structure that extends beyond graduation. For LDCs with high utilization of trade preferences – the withdrawal of preferential market access must be carefully sequenced to avoid abrupt disruptions. For climate-vulnerable SIDS and LLDCs, enhanced access to climate finance, debt solutions, and resilience support are key elements in their efforts to tackle post-graduation challenges.

Deepened South-South and triangular cooperation, innovative financing instruments, blended finance, and strengthened private-sector engagement will be essential to building productive capacities and unlocking opportunities in digital transformation, green and blue economies, and regional market integration.

iGRAD: A Transformative Tool
The operationalization of the Sustainable Graduation Support Facility—iGRAD—is a concrete step forward. By providing tailored advisory services, capacity-building, and peer learning, iGRAD can serve as a critical tool to help countries anticipate risks, manage transitions, and sustain development momentum. Its success, however, hinges on strong political support and adequate, predictable resourcing from development partners.

Graduation as a Catalyst for Transformation
Graduation should not be the end of the story—it should be the beginning of a new chapter of resilience and opportunity. With integrated national strategies and reinvigorated global partnerships, we can turn graduation into a catalyst for inclusive, sustainable development. Let us seize this moment in Doha to reaffirm our collective commitment: no country should graduate into vulnerability. Together, we can ensure that graduation delivers on its promise—for communities, for economies, and for future generations.

Rabab Fatima is UN Under Secretary General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States

IPS UN Bureau

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US President Trump’s economic strategy for his second term aims to get the rest of the world, especially its wealthy allies with greater means, to pay more to help strengthen the US economy.

Jomo Kwame Sundaram

De-dollarisation distraction
Harvard economist Kenneth Rogoff recently observed, “We are absolutely at the biggest inflection point in the global currency system since the Nixon shock to end the last vestige of the gold standard.”

After the Bretton Woods Conference in 1944, the gold price was set at $35 per ounce. In August 1971, US President Richard Nixon ended this gold-dollar parity.

De-dollarisation has gradually continued since, with occasional brief spurts and reversals. For example, capital flows abroad rose following the 2008-09 global financial crisis.

Growing weaponisation of economic relations has probably accelerated de-dollarisation. Rogoff observed, “this was happening for a decade before Trump. Trump is an accelerant.”

Governments, central banks and BRICS countries have been de-dollarising. Even US dollar hegemony advocates no longer deny alternatives to the dollar’s role as global reserve currency.

Meanwhile, private foreign investors, including foreign asset managers, investment banks and pension funds, do not want to be left behind.

Investment fund managers are increasingly ‘de-risking’ by cutting exposure to dollar-denominated assets.

Mar-a-Lago plan
Economist Stephen Miran has proposed a new Trump initiative to require other governments to pay the US for services purportedly rendered.

First appointed chair of Trump’s Council of Economic Advisers, Miran has since been appointed to the US Federal Reserve Board.

A few days after Trump announced his Liberation Day tariffs on April 2, Miran articulated five expectations. These expect other nations to pay the US for ‘public goods’ services it ostensibly provides the world.

Allies will be expected to pay the US more for the ‘security umbrella’ it provides to NATO and other allies. The US also expects those buying Treasury bonds to pay more for the ‘privilege’

In November 2024, Miran’s A User’s Guide to Restructuring the Global Trading System proposed the Mar-A-Lago accord, named for Trump’s exclusive Florida island resort and residence.

He also referred to the Plaza Accord, which the Reagan administration imposed on its G5 allies in September 1985. Then, the US forced Japan and Germany to appreciate their currencies against the dollar.

The yen’s appreciation fuelled a massive Japanese asset price bubble that burst with devastating consequences in 1989, ending its post-war boom.

Trump now seeks the appreciation of other major currencies. Already, he has succeeded in getting his European allies to agree.

However, it seems unlikely that Trump will get China and other BRICS economies to do so, as they are aware of how the Plaza Accord affected Japan.

Century bonds
Other national monetary authorities buying US Treasury bonds to stabilise their own currencies have long caused dollar appreciation.

They are now expected to help depreciate the dollar. Miran has proposed that the US issue century, i.e., 100-year bonds, at very low interest rates, well below the current rates for US Treasury securities.

Miran wants foreign central bank reserve currency managers to sell off their dollar-denominated assets. They should “term out” their “remaining reserve holdings” and refinance short-term debt with long-term borrowings.

Miran is explicit: “The US Treasury can effectively buy duration back from the market and replace that borrowing with century bonds sold to the foreign official sector.”

His plan thus intends to force foreign holders of US government debt (‘Treasuries’) to extend the duration of their loans.

Very low interest rates for century bonds will ensure that foreign bondholders effectively pay the US more for the ‘privilege’ of borrowing dollars.

For Miran, the appreciation of other currencies against the dollar will also strengthen the American economy. US manufacturing will strengthen as its exports become more competitive.

Thus, his Mar-A-Lago accord plan expects other nations to pay more to strengthen the world’s largest and richest economy.

Miran’s Mar-A-Lago plan is not yet official US policy. However, this can change with Miran’s likely appointment as the next Fed chair, replacing Trump 1.0 appointee Jerome Powell.

BRICS de-dollarisation?
However, Miran’s declared plan to strengthen the US economy by depreciating the dollar against other major currencies has also accelerated de-dollarisation.

In recent years, the BRICS have been accused of conspiring to accelerate de-dollarisation worldwide, but this is certainly not a shared ambition.

Lacking significant trade surpluses, Brazil and South Africa have long advocated de-dollarisation. But Russia’s complaints have more to do with recent NATO weaponisation of financial instruments against it.

There is no comparable enthusiasm among other BRICS member states, which have much healthier trade surpluses and more dollar assets.

Its recent membership expansion will make an official BRICS de-dollarisation stance even more unlikely.

Nevertheless, Trump’s leadership relies on the American public believing the rest of the world is conspiring against them.

IPS UN Bureau

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Mwavita Rohomoya sits with her four children in front of her drink stall in Minova, Kalehe territory, South Kivu province, DR Congo, on 23 April 2025. Minova is one of the first areas in South Kivu to be affected by the resurgence of violence, one of the immediate consequences was the rise in prices of staple foods and essential goods. UNICEF’s cash transfer programme helped families meet their urgent needs—buying food, finding shelter, and accessing healthcare—while also enabling some, like Mwavita, to invest in small-scale income-generating activities. Credit: UNICEF/Christian Mirindi Johnson

By Oritro Karim
UNITED NATIONS, Oct 20 2025 (IPS)

In 2025, unprecedented cuts to foreign aid and humanitarian funding have exacerbated global hunger crises, leaving millions without access to food or basic services. Funding shortfalls have forced aid agencies to scale back or suspend lifesaving programs in some of the world’s most food-insecure regions, particularly across the Global South—exacerbating already dire conditions caused by conflict, displacement, economic instability, and climate shocks.

On October 15, the World Food Programme (WFP) released a report, A Lifeline At Risk: Food Assistance At A Breaking Point, which illustrated the impact of funding shortfalls to their programs in the context of six countries: Afghanistan, the Democratic Republic of the Congo (DRC), Haiti, Somalia, South Sudan,and Sudan. In these nations, funding cuts have had devastating consequences, with entire communities being pushed to the brink of starvation.

“We see significant reductions in our operations and the operations of our partners,” said Ross Smith, WFP’s Director of Emergency Preparedness and Response. “That goes from cutting people completely off of assistance, reducing rations, and reducing the duration of assistance. Many vulnerable people are completely without a safety net or a landing pad at this point in time.”

The report highlighted that the number of people in urgent need of food and livelihood assistance has surged to a record high of 295 million in 2025—coinciding with major reductions in foreign aid and humanitarian funding from key donors, including the United States. As a result, WFP has been forced to drastically scale back its operations, grappling with an estimated 40 percent cut in funding that has severely limited its ability to deliver lifesaving support to the world’s hungriest populations.

WFP warns that recent funding cuts could “severely undermine global food security”. It is estimated that roughly 13.7 million people who are dependent on food assistance from WFP could be pushed into emergency levels of hunger, with children, women, refugees, and internally displaced people being disproportionately affected.

“These cuts are triggering additional food insecurity that in itself could have impacts at both national and regional levels,” said Jean-Martin Bauer, Director of WFP’s Food Security and Nutrition Analysis Service.

WFP notes that the full extent of the impact of these funding cuts to food assistance will not be immediate, but will unfold in the coming months. “This is why we call it a ‘slow burn’ in the report,” said Bauer. “Because the cuts haven’t fully fed through the system yet to all countries and communities.”

Bauer warned that escalating hunger amid dwindling aid could have far-reaching implications that could exacerbate existing crises, citing rising rates of child marriage, increased school dropouts, heightened social instability, increased displacement, and growing economic and political turmoil. Furthermore, WFP has recorded increased rates of malnutrition among children in refugee communities, with many of these children experiencing lifelong health challenges as a result.

One of WFP’s most pressing challenges has been the reduction of disaster preparedness programs for some of the world’s most crisis-prone countries, as resources are redirected to sustain emergency food assistance for the most affected populations. In Haiti, WFP has been forced to suspend its hot meals program for displaced families and cut monthly rations in half, as the nation continues to struggle with record levels of hunger.

Bauer noted that Haiti’s contingency stock of humanitarian aid has been fully depleted and, for the first time since Hurricane Matthew in 2016, WFP has been unable to replenish it. The agency continues to closely monitor Haiti’s food security situation.

Similarly, Smith reported that conditions in Afghanistan have worsened considerably over the course of the year, with fewer than 10 percent of the country’s 10 million food-insecure people now receiving humanitarian aid. “We expect pipeline breaks as early as November and can currently only provide (limited) winter assistance,” said Smith, noting that less than 8 percent of those in need of winterization support will receive it.

In the Democratic Republic of the Congo (DRC), WFP has been forced to cut its operations from targeting 2.3 million people to just 600,000 and warns that its resources could be entirely depleted by February of next year without additional funding. In Somalia, WFP’s reach has also been drastically reduced, with the agency now able to assist less than 25 percent of the people it supported last year.

In Sudan, WFP has managed to assist roughly 4 million people in August—half of them in hard-to-reach areas such as Darfur and South Kordofan. “We are shifting away from what used to be a very large program, in the absence of significant government support for many people, to one now that is famine prevention that is moving from hotspot to hotspot,” said Smith. In neighboring South Sudan, WFP has redirected its limited resources to prioritize civilians experiencing the most extreme levels of hunger.

According to the report, WFP has recalibrated its food assistance priorities in the face of dwindling aid budgets and shrinking staff, choosing to focus on famine prevention efforts and distributing food rations that reach fewer people but cover basic needs. Bauer added that it is imperative for humanitarian aid groups to align with local actors and continue to closely monitor levels of hunger. “The data and analytics – they’re the humanitarian community’s GPS,” Bauer said. “We’re taking the risk of losing our way without the data. So the data must flow.”

IPS UN Bureau Report

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