MYdevelopment

· Imperialism (Still) Rules

· The Global South in the New Cold War

· Racism, Shitholes and Re-election

https://www.ipsnews.net/2026/10/why-trump-expects-the-nobel-peace-prize/

Dollar System Eroding Slowly, But Still Dominant

Jomo — Tue, 13 Oct 2026 07:45:19 GMT

Dollar System Eroding Slowly, But Still Dominant

· The Dollar-Gold Standard’s Lingering Demise

KUALA LUMPUR, Malaysia, Oct 13 2026 (IPS) - The protracted demise of dollar-gold convertibility and associated fixed exchange rates did not end dollar hegemony. With crucial and timely help from political allies, confidence in the dollar system has persisted, albeit much diminished.

Contingency planning?
On August 15, 1971, President Richard Nixon announced that the US would no longer convert dollars into gold, as promised under the 1944 Bretton Woods (BW) agreement.

But the BW payments arrangements and the US promise of dollar convertibility to gold were not sustainable. As Robert Triffin noted in 1960, the system was ‘failing by design’ from the outset, which US authorities denied and refused to address.

Vietnam War spending, rising inflation, and a run on US gold reserves forced this decision after allied Western central banks quietly gave up defending the gold-dollar peg in 1968.

Decades later, then-US Undersecretary for Monetary Affairs Paul Volcker revealed he had initiated a Treasury working group in 1969.

As the US balance of payments was already proving unsustainable, suspending gold-dollar convertibility was no longer considered an option to be avoided at all costs.

Portraying the gold peg’s failure as due to arithmetic, not politics, Volcker argued that suspending it involved implementing contingency planning that the group had long considered.

Two days before, Nixon summoned 15 advisors to a secret retreat at Camp David to draft his announcement. He also imposed a 90-day wage-price ‘freeze’ and a 10% tariff on imports.

Thus, Nixon presented the suspension of dollar convertibility to gold as part of a larger economic policy reform package, rather than as the long-overdue default on earlier US pledges.

With his 1972 re-election campaign approaching, Nixon and his Treasury Secretary, John Connally, claimed to be ‘freeing’ US economic policy by ending dollar-gold convertibility and associated fixed exchange rate obligations.

Clearly, Nixon’s mid-August 1971 announcement was not an improvised response to an emergency or even the sudden break he implied, although the Volcker group preferred a more ‘controlled demolition’.

US dollar, others’ problem
When allied finance ministers were negotiating a replacement arrangement in Rome in November 1971, Connally bluntly told them that the dollar was America’s currency but their problem, belatedly confessing to BW’s true nature.

Nonetheless, their December 1971 Smithsonian Agreement still sought to patch things up rather than explicitly abandon the 1944 arrangement and the later efforts to defend it.

The dollar was devalued against gold for the first time since 1934, with its price rising from $35 to $38 an ounce. Trading bands around other currencies were widened to give central banks more flexibility.

Nixon pronounced the 1971 Smithsonian Agreement the most significant monetary arrangement in world history before the dollar was devalued again 14 months later, in February 1973.

National authorities politically aligned with the US had defended it, but eventually stopped paying to maintain the charade. Thus, a year and a half after August 1971, BW was finally buried.

Within weeks, the major currencies abandoned fixed exchange rates altogether, allowing them to float against one another. Although the transition to floating rates was not smooth, it has survived, with modifications, ever since.

But the ‘settlement gap’ time lag under floating exchange rates is so problematic that international banking regulators have long sought to reform the way cross-border currency trades are cleared.

Charade over?
Although BW is now long gone, the dollar system has proven durable. The end of gold convertibility was not fatal to the dollar’s role at the centre of world finance.

Instead, the end of the BW dollar-gold convertibility obligation removed one constraint on it. After the final break with gold in 1973, the dollar was only backed by US government promises.

Gold’s formal demonetisation was confirmed with the 1976 Jamaica Accords when IMF member governments quietly amended its charter to strip the precious metal of any official role.

Freed from its earlier BW obligation to redeem dollars with gold, the US has financed its trade, current account, and fiscal deficits, as well as foreign and domestic government spending, with ever more dollar debt.

The world has increasingly financed the growth of US debt as the dollar remains the main currency in which most international trade, especially in commodities, is priced and settled.

The IMF had policed fixed exchange rates and gold-dollar convertibility for over two decades after the war. It has since changed roles to oversee floating exchange rates, selectively serve as ‘lender of last resort’ and manage sovereign debt crises.

International oil transactions were mainly settled in ‘petrodollars’, due to an arrangement with Saudi and other Gulf producers to use oil sales revenue to buy US Treasury securities.

The status quo is now based on others’ willingness to hold dollars. But growing concerns about US willingness to honour its commitments have caused governments to consider alternatives. But dollar hegemony has weathered such recent storms so far.

Related IPS Articles

· Dollar Dominance Eroding Slowly but Surely

· Trump’s World Stagflation Also Undermines Dollar Hegemony

· Trump De-dollarisation Accelerant

· US Fed- Induced World Stagnation Deepens Debt Distress

https://www.ipsnews.net/2026/10/dollar-system-eroding-slowly-but-still-dominant/

The Dollar-Gold Standard’s Lingering Demise

Jomo — Mon, 28 Sep 2026 06:52:20 GMT

The Dollar-Gold Standard’s Lingering Demise

· Dollar Dominance Eroding Slowly but Surely

KUALA LUMPUR, Malaysia, Sep 28 2026 (IPS) - The 1944 Bretton Woods (BW) conference accepted the US demand to use the dollar to settle international financial transactions. This arrangement would require a US balance-of-payments deficit to issue enough dollars.

But every dollar abroad was, in principle, a claim on US monetary gold. With dollar liabilities exceeding US gold reserves by the 1960s, the arrangement became more vulnerable.

Bretton Woods
At BW in July 1944, 44 allied nations met to design the post-war world monetary system. John Maynard Keynes represented the UK, no longer financially dominant due to its heavy public debt fighting two world wars.

Harry Dexter White represented the US, which then held two-thirds of the world’s monetary gold, while other countries needed dollar loans for trade and reconstruction. The US promised foreign governments and central banks to convert dollars to gold.

With the US BW promise to redeem an ounce of gold for $35, the dollar became the world’s reserve asset. Every other currency’s exchange rate was fixed against the dollar, in principle, adjustable with IMF approval.

Instead, Keynes proposed a reserve currency, Bancor, managed by an international clearing union to avoid any national currency becoming dominant; a payments system using a national currency could eventually force others to accept its national policies and priorities.

Unsustainable by design
The BW agreement also created the International Monetary Fund and the World Bank. Each member nation was assigned a quota, partly paid in gold and its own currency.

A member nation’s quota determined both its voting weight and how much it could borrow if it needed to borrow when its own currency came under pressure.

The dollar-gold peg was vulnerable by design. For the arrangement to function, the world needed a growing supply of dollars for reserves and international transactions.

In principle, the US had to have enough gold to honour all claims against it. This requirement was met in 1944, when its gold reserves were vast, while other economies were ruined. However, these conditions were not met for long.

As currency devaluations were stigmatised, currency pegs were rarely adjusted. Governments defended unrealistic exchange rates, unjustified by their reserves.

Instead of adjusting gradually, fixed exchange rates would adjust abruptly, typically after crises, as with sterling in 1967 and the dollar in 1971.

Keynes had insisted on allowing governments to manage cross-border capital movements, expecting free-flowing speculative capital to undermine fixed exchange rates.

For a decade and a half, most European governments used the IMF’s sixth Article of Agreement to restrict how freely money could leave their countries and thus defend their currency pegs.

As strong post-war recoveries turned Europe’s dollar shortages into surpluses, capital controls were gradually loosened from the 1960s.

London Gold Pool
The US Congress ignored Triffin’s warning. Instead, in late 1961, the US organised seven European central banks into the London Gold Pool, coordinated by the Bank of England rather than by treaty.

It worked for a while. Whenever private demand pushed the gold price over $35/ounce, participating banks sold their bullion to bring the price down, to buy gold!

From 1962, currency swap lines involving the same central banks withdrew dollars from circulation abroad to reduce demand for gold. Both efforts used a formula based on each country’s original contributions.

Rising US government spending made things worse. The Johnson administration financed both the Vietnam War and Great Society programmes without raising taxes. More dollars flowed out of the US, expanding the supply of Eurodollars.

In March 1967, without any parliamentary mandate or transparent treaty, West Germany’s Bundesbank President privately promised the Fed it would not convert its large dollar reserves from its fast-growing trade surplus into gold.

But France’s president had never accepted Washington’s abuse of the post-war arrangement. In February 1965, De Gaulle complained of the dollar’s exorbitant privilege.

This referred to the US ability to settle its liabilities abroad by issuing more dollars, instead of earning foreign exchange like others. In June 1967, France refused to continue subsidising the dollar peg by withdrawing from the Gold Pool.

Britain devalued the pound in November 1967. As speculative pressure on gold rose, other Pool central banks had to sell even more gold until they gave up on 17 March.

Two tiers
In the subsequent two-tier system, the $35 gold price was only used for transactions between central banks and governments. Another floating free-market price traded well above it.

US gold reserves, almost $20 billion shortly after WW2, were halved by 1971 as foreign governments’ and central banks’ dollar claims rose over $50 billion!

When member governments safely created official liquidity by introducing a new reserve asset, the Special Drawing Right (SDR), in 1969, the problem was highlighted again.

SDRs were allocated directly to member countries rather than tied to either gold or the US trade or current account deficit. The SDR was supposed to supplement, not replace, gold and the dollar as reserve assets.

By mid-1971, when President Nixon unilaterally ended the dollar’s gold convertibility obligation, the debate was no longer about whether the gold window could hold, but over how to close it without triggering a currency-market panic after years of speculation.

Related IPS Articles

· Trump’s World Stagflation Also Undermines Dollar Hegemony

· Trump De-dollarisation Accelerant

· US Fed- Induced World Stagnation Deepens Debt Distress

https://www.ipsnews.net/2026/09/the-dollar-gold-standards-lingering-demise/

International Trade Theory Not Developmental

Jomo — Mon, 14 Sep 2026 06:53:23 GMT

International Trade Theory Not Developmental

· Trade Liberalisation Never Lifted All Boats

KUALA LUMPUR, Malaysia, Sep 14 2026 (IPS) - Most free trade advocates falsely claim that comparative advantage ensures developmental gains from trade liberalisation. Mainstream trade theory does not promise that partial trade liberalisation guarantees optimal international specialisation.

Specialisation?
Developing countries are supposedly better off after specialising in relatively simple activities contributing to global supply chains, such as primary commodity production and low-skill, labour-intensive manufacturing.

Why should developing countries specialise in producing and exporting mineral or agricultural primary commodities? After all, most economists recognise the greater gains in growth, employment, and income from dynamic modern activities, especially manufacturing.

Comparative advantage supposedly gained by trade liberalisation supposedly ensures gains from international specialisation. However, tropical agriculture has instead experienced falling relative prices rather than higher-value-added secondary and tertiary activities in the North.

As Hans Singer and Raul Prebisch showed in 1950, export prices for primary commodities have fallen much more over the long term relative to the prices of manufactures. Bilge Erten has shown these trends continuing into the early 21st century.

Evidence since the late 20th century suggests that the prices of manufactured goods produced by developing countries have fallen relative to those of more sophisticated, high-tech goods from more developed economies.

Intellectual property rents
Due to intense competition among developing countries producing ‘generic’ manufactures, developed-country firms secure higher rents from intellectual property rights (IPRs) – namely, ‘surplus’ from monopoly power so conferred – on their manufactured exports.

The latter are priced higher due to the ‘exclusive’ monopoly power protected by IPRs and ‘branding’ strengthened by transnational law with the establishment of the multilateral World Trade Organization and related law on trade-related intellectual property rights (TRIPS).

In fact, the prices of generic primary commodities and ‘unbranded’ manufactures have fallen due to more intense competition. In contrast, the prices of ‘exclusive’ products, due to monopoly IPRs and transnational corporate branding, remain higher.

However, such rents do not accrue to mass-produced generic products, whether primary commodities or manufactures made with easily accessible materials and production techniques, subject to intense market competition.

The last decade-long commodity ‘super-cycle’ price boom, which ended around 2004, generated windfall earnings and investible capital. While it undoubtedly lifted many boats for growth, if not development, it did not contradict longer-term trends.

Biased theory
The economic literature on development, trade, and monopolistic competition recognises the possibility of increasing – not just diminishing – returns to scale in manufacturing, enabling average costs to fall.

Such gains from trade are not from one-time ‘static’ improvements in resource allocation. Instead, these benefits stem from dynamic changes driven by production expansion, specialisation, and differentiation for larger markets.

Potential gains from greater external market access can be significant, but only if building on an existing industrial base, capacity and capabilities. Proactive support through appropriate industrial, investment, and technology policies can be crucial.

This pragmatic developmental approach to trade policy contradicts the neoclassical Heckscher-Ohlin ‘pure’ trade theory, the received conventional wisdom invoked by contemporary advocates of trade liberalisation.

Some Keynesian economists promoted balance-of-payments-constrained growth. Cross-border flows of goods and services are determined by the level and growth rate of economic activity, with the exchange rate determining relative prices.

This approach, implying fewer gains from trade, is rejected by trade liberalisation advocates. Developing countries’ gains from specialisation are reduced by falling relative prices, with consumers benefiting from productivity gains at the expense of producers.

If developing-country firms do not manufacture products at productivity levels comparable to those in developed countries, claims of trade gains from consumers’ ‘love of variety’ become quite irrelevant.

Agricultural trade liberalisation
The Western push for agricultural trade liberalisation sought to eliminate tariffs to ensure food security while ignoring subsidies that developed countries could afford.

Although agricultural export subsidies have been largely eliminated, OECD food producers continue to benefit from production subsidies, thereby enabling productivity and trade gains.

As many developing countries became net importers of subsidised agribusiness exports from OECD exporters, price increases due to subsidy withdrawal hurt consumers, especially in developing countries.

Comparable gains in developing-country agriculture have often been modest due to the decline in infrastructure and support services, especially after the imposition of the ‘neoliberal’ Washington Consensus by the West in the 1980s.

The increasing private foreign corporate domination of agricultural research, development, and extension has also significantly reduced net gains to developing-country smallholder farmers.

Neoliberal reforms, including structural adjustment programmes, have reduced, contracted out or privatised government and public-sector alternatives. This raised the costs of credit, marketing, and inputs, including seeds, fertilisers, herbicides, pesticides, machinery and fuel.

While trade liberalisation of manufactured imports eroded the policy space needed for investment and technology policies for development, agricultural trade liberalisation has undermined ‘food security’ in most developing countries.

Thus, many African net food-exporting nations became net food importers in the 1980s, following the neoliberal reforms imposed by structural adjustment programmes on indebted nations.

Related IPS Articles

· Trump Tariffs Creating Less Manufacturing Jobs

· Trade Liberalisation Undermines Development

· No African Development from Western Trade Policies

· Trump Undresses Rival Trade Myths

· Trump’s ‘Shock and Awe’ Tariffs

· Trade Liberalisation Kicked Away African Development Ladder

· Trade Deception Returns in Pan-Africanist Guise

· Trade Liberalization for Development?

· Agricultural Trade Liberalization Undermined Food Security

https://www.ipsnews.net/2026/09/international-trade-theory-not-developmental/

Dollar Dominance Eroding Slowly but Surely

Jomo — Tue, 01 Sep 2026 06:34:17 GMT

Dollar Dominance Eroding Slowly but Surely

· Trump’s World Stagflation Also Undermines Dollar Hegemony

JAKARTA, Indonesia, Sep 1, 2026 (IPS) - The US dollar’s role as the world’s reserve currency has been eroding gradually for decades. However, various US policies, including recent deliberately unexpected actions, have at times accelerated de-dollarisation.
Dollarisation
Despite warnings from Keynes and others about its likely problems, Harry Dexter White, the head US delegate, imposed an indirect gold standard at the 1944 Bretton Woods conference.

By fixing the gold price in dollars, the US currency became the world’s reserve currency, with other currencies pegged to it at fixed exchange rates. With this indirect gold standard, the metal’s price was fixed in US dollars.

Other currencies were pegged to the dollar, strengthening its role as the dominant currency. Other arrangements that could have mitigated the problems and adverse consequences of the dollar system were effectively rejected by the US at Bretton Woods.

Ninety per cent of foreign exchange market transactions now still involve the dollar. Most central bank reserves are still denominated in dollars, while the US dollar is still used to invoice around two-fifths of international trade.

Just after World War II (WW2), the US economy accounted for a quarter of world output, measured in terms of purchasing power parity (PPP), and even more in nominal terms. The US share of the world economy has fallen to under 15% since.

The US also accounted for a quarter of world exports at that time. Unlike most other nations, US industry was strengthened rather than destroyed during WW2.

The size, liquidity, and depth of US capital markets have also reinforced the dollar’s role. Its special status in the Bretton Woods dispensation conferred an ‘exorbitant privilege’, increasing international demand for dollar bonds.

This has enabled the US government and companies to borrow at lower interest rates than others. The resulting increase in demand for dollar-denominated assets has also strengthened the greenback.

Erosion of dollar dominance
Since then, the US economy has become much more financialised and de-industrialised, now accounting for less than a tenth of world goods exports.

However, although the US now accounts for under 15% of global income at PPP, its stock market still accounts for over three-fifths of the world’s total market capitalisation.

Leading international monetary economist Barry Eichengreen’s 2022 survey of central banks’ foreign exchange reserves showed the dollar share of foreign reserves falling from 70% in 2000 to under 60% in 2021; it has since declined to below 58% in early 2025.

Ben Norton suggests that the actual dollar share of foreign reserves is even lower and continues to decline. Some central banks hold other reserves off the books for fear of Western actions to freeze and seize their foreign reserves.

With the US economy more de-industrialised and financialised, the dollar system has become more important in attracting foreign investors and inducing capital market bubbles from time to time.

De-dollarisation accelerating
De-dollarisation goes back many decades, even when the dollar-gold peg was still in place. France famously demanded gold for dollars, then shipped bullion back under armed escort.

Many recent Trump policies have heightened international concerns about holding dollar-denominated assets. Greater Washington belligerence, including illegal tariffs, sanctions and bombings, has also accelerated de-dollarisation.

Trump’s attempts to influence the US Federal Reserve Bank and other public surveillance and regulatory institutions have also shaken public and international trust. Humiliating dismissals of allegedly recalcitrant officials have not helped.

In the first half-year of Trump’s second presidential term, the dollar experienced its biggest fall since the 1973 OPEC oil crisis, by over 10% against other major currencies, before fluctuating considerably.

After Trump threatened massive tariffs against all other countries on 2 April 2025, fears of “a simultaneous collapse in the prices of all US assets” quickly grew.

Instead of the usual ‘flight to safety’ in dollar assets when crises previously loomed, it seems “The market has lost faith in US assets”, selling them down in response to new threats and uncertainties.

Since then, uncertainties have worsened market and dollar volatility worldwide. Unsurprisingly, foreign governments and investors are looking for alternatives to the dollar.

Eichengreen had previously expected a gradual decline in dollar dominance and a slow transition to a more balanced multi-currency reserve system.

Although the US president is not the sole cause of the recent acceleration of de-dollarisation, Trump 2.0 policies have prompted monetary authorities worldwide to consider alternatives to the US dollar as the world’s reserve currency.

More recently, Eichengreen has warned of a likely acceleration in the dollar’s decline, expressing concern about its adverse effects. That would threaten financial institutions holding dollar-denominated assets, causing them to lose value in foreign-currency terms.

No alternative?
However, Eichengreen insists “no other currency … is positioned to fill the dollar’s shoes”. Neither the euro nor the renminbi has the capacity or ambition to replace the dollar.

With privately issued cryptocurrencies not functioning as currencies except for mainly illicit transactions, Eichengreen expects the dollar to remain “the cleanest dirty shirt in the pile”.

Related IPS Articles

· US Fed- Induced World Stagnation Deepens Debt Distress

· IMF Urges Non-alignment in Second Cold War

https://www.ipsnews.net/2026/09/dollar-dominance-eroding-slowly-but-surely/

Trade Liberalisation Never Lifted All Boats

Jomo — Tue, 04 Aug 2026 08:08:35 GMT

Trade Liberalisation Never Lifted All Boats

· Trump Tariffs Creating Less Manufacturing Jobs

KUALA LUMPUR, Malaysia, Aug 4, 2026 (IPS) - President Trump has blamed trade liberalisation advocated by globalists for US deindustrialisation. Instead, his own weaponisation of economic policies, instruments and institutions purport to ‘make America great again’ (MAGA).

Trump 1.0 claimed to do so by ‘reshoring’ industries that had relocated abroad. Trump 2.0 uses more threats to secure investments, markets and other economic advantages for US big business, at the expense of others, including allies and especially the Global South.

While rejecting globalists’ claim that trade liberalisation enhances growth, employment and incomes for all, his own ‘America First’ policies are slowing the world economy, including the US.

Post-war trade policy
The US has dominated international relations and institutions, including multilateral economic governance, since World War Two (WW2). The US Congress rejected the 1948 Havana Charter proposing the International Trade Organisation (ITO).

Selective trade liberalisation was key to the ‘neoliberal’ Washington Consensus, which has been recommended, if not required, by multilateral economic institutions from the 1980s.

Meanwhile, the neoliberal era has been associated with slower, more volatile growth than the post-war Keynesian ‘Golden Age’ of the first quarter-century after WW2.

The West pushed for the World Trade Organization (WTO) to consolidate the international economic order on a neoliberal basis. The 1994 Marrakech Agreement establishing the WTO left little room for development policy initiatives.

For many in the West, neoliberal trade liberalisation ended with the first Trump presidency from 2017. However, the reversal had begun earlier in the 21st century, especially after the 2008-09 global (actually Western) financial crisis.

However, Trump should be acknowledged for brazenly weaponizing international trade and investment instruments against the rest of the world, including US allies.

Hegemony
Free trade advocate Jagdish Bhagwati showed that anything less than trade multilateralism, including plurilateral and bilateral free trade agreements, is sub-optimal and unfair.

Compromises, including those promoted by international financial institutions and the OECD, have, instead, strengthened US and Western hegemony.

Postwar decolonisation of Asia and Africa has seen discontent grow in multilateral institutions, prompting selective Western undermining of multilateralism after the Cold War.

Unable to ensure the WTO’s dispute settlement system consistently protects and advances its interests, the US has paralysed it by blocking key appointments since the Obama presidency.

Collective assertiveness by developing countries in multilateral fora has mitigated some adverse consequences of international economic integration under Western auspices.

Partial and uneven trade liberalisation has constrained Global South industrialisation. Recent deindustrialisation has reduced manufacturing’s share of national output in many developing countries.

Little new manufacturing capacity has developed in Africa beyond some minimal import-substituting and resource-processing activities protected by high transport costs.

Divide and rule
Economic concessions, such as trade preferences, to developing countries have been used to divide the Global South, including the ‘least developed countries’ and ‘small island developing states’, effectively weakening their collective negotiating strength.

Trade liberalisation has also reduced tariff revenue, especially important for the poorest developing countries, where it often accounted for up to half of total tax collected.

Additional taxes, typically from consumption or income, have never compensated for tariff revenue losses due to trade liberalisation. This has undermined their already weak fiscal capacities, often requiring them to borrow even more.

Promoting food agriculture in supposedly ‘land-abundant’ African countries was supposed to make them more food-secure and even export-competitive but there is no evidence this has happened.

Developing nations have long unsuccessfully asked the Global North to eliminate agricultural subsidies, tariffs, and non-tariff import barriers that protect their output.

This would make food production in developing countries more competitive. But rich countries have long insisted that developing countries must first ‘reciprocate’, e.g., by eliminating their manufacturing tariffs.

Structural adjustment has also undermined agricultural infrastructure and smallholder productivity in many developing countries. Meanwhile, lower farm subsidies in Europe have raised many food import prices in the South.

Gains from trade?
Purported gains from trade liberalisation are often either merely theoretical or one-time gains from static understandings of comparative advantage, with no cumulative potential.

Claims of gains from trade liberalisation presume internationally competitive productive and export capacities capable of generating a strong positive supply response.

Such preconditions are unlikely in most developing countries, especially the poorest, and need to be developed, typically by protecting against external market pressures.

Most studies of realistically achievable outcomes of WTO Doha Round negotiations from 2001, including those for the World Bank, projected net losses for most developing economies, except for a few Asian economies.

There is also no robust evidence of trade liberalisation significantly reducing poverty and hunger. Developing countries, especially the poorest ones and those in sub-Saharan Africa, would be worse off.

One may well ask why developing countries have to be bribed with ‘aid for trade’ if it is in their own best interests to commit to trade liberalisation, multilateral or otherwise.

Worse, trade liberalisation has made sustainable development nearly impossible by significantly reducing policy options for aspiring developmental states, especially for trade, industrial, investment and technology policies.

Related IPS Articles

· Trade Liberalisation Undermines Development

· No African Development from Western Trade Policies

· Trump Undresses Rival Trade Myths

· Trump’s ‘Shock and Awe’ Tariffs

· Trade Liberalisation Kicked Away African Development Ladder

· Trade Deception Returns in Pan-Africanist Guise

· Trade Liberalization for Development?

· Agricultural Trade Liberalization Undermined Food Security

https://www.ipsnews.net/2026/08/trade-liberalisation-never-lifted-all-boats/

Don’t Cry for Milei, Argentina

Jomo — Thu, 23 Jul 2026 06:44:08 GMT

Don’t Cry for Milei, Argentina

By Jomo Kwame Sundaram and Iggy Rodriguez

KUALA LUMPUR, Malaysia, Jul 23 2026 (IPS) - Sunday’s World Cup final focused world attention on the stench of corruption, past and current, surrounding some of its main protagonists, including Argentina, and the presidents of FIFA, Argentina and the main host nation.

Messi football
Nick Corbishley has exposed the corruption of World Cup football and Argentina’s Milei government, enthusiastically supported by US President Trump’s ‘Donroe Doctrine’.

In the run-up, Argentina committed the most fouls — largely in midfield to disrupt their opponents’ play — but only received a controversial red card in the final. It had the most opponents’ goals disallowed but never conceded a penalty.

Of course, there are always subjective elements in applying football rules, and it is difficult to prove foul play. But it is suspicious when referees refuse to use a video-assisted referee (VAR) to check for fouls.

In Argentina’s first game, Messi stepped on an Algerian opponent’s Achille’s tendon with his studs up. Such an offence would typically get a red card, but in this case, there was no card or VAR check.

As many presume, FIFA would not allow the biggest star of world football, now playing in the US league, to get a match ban at the start of the tournament; it would have been a business disaster.

Many believe the ‘inconsistent’ use of rules and VAR checks helped Argentina reach yet another World Cup final. With VAR, the inconsistent application of rules and procedures, such as awarding cards, can tip games with narrow margins in a team’s favour.

Considering the history of FIFA corruption and its willingness to bend rules at President Trump’s behest, such suspicions are rife. Worse, the Argentine Football Association is reportedly under Federal Bureau of Investigation (FBI) investigation for fraud and money laundering.

While controversial refereeing and VAR decisions were common in this tournament, Argentina has been accused more than any other team. Many believe the level football field was tilted to favour Argentina and its superstar, Messi.

Such advantages only work at the World Cup level if the team is highly competent and competitive, which Argentina certainly is. The latest World Cup has seriously tarnished the reputation of FIFA and football itself.

Billionaire haven
Meanwhile, Argentine President Javier Milei is trying to remove most remaining restrictions on foreign ownership of Argentine land.

A day after the England semi-final, the Argentine Senate began debating Milei’s bill on the “inviolability of private property”. If passed, it would repeal a 2011 law limiting the acquisition and ownership of rural land by foreigners.

As foreign purchases of Argentine land surged after its late 20th century crisis, its Congress limited sales to foreigners. Already, 13.2 million hectares, or 5% of Argentina, are foreign owned. The Milei government now wants to eliminate remaining restrictions on land sales to foreigners.

Foreign ownership of Argentine land is concentrated in specific areas such as Patagonia, rich in energy and mineral resources. Once approved, the bill will allow foreigners to own such strategic areas with water, minerals and foreign borders.

Peter Thiel, famous for arguing ‘competition is for losers’, is promoting the privatisation of public land by creating charter cities such as Prospera Inc in Honduras.

Thiel recently moved to Buenos Aires, where he is believed to be advising the Milei government. Apparently, he envisions Argentina as an economic haven cum ‘laboratory’ for his investments.

Forbes reports Milei is trying to attract billionaires like Thiel to his “new land of freedom” with a full-citizenship-by-investment scheme and by eliminating property ownership restrictions.

Milei scolded Argentina’s footballers and fans for protesting Britain’s ongoing rule of the Falkland Islands at the England semi-final as his government tries to sell off the most valuable rural Argentine land.

As the dispute between Honduras and Prospera Inc. has shown, once sovereign land is transferred into foreign hands protected by international investment treaties, getting that land back is nearly impossible.

From Nazi to Zionist refuge
Milei enjoys Netanyahu’s and Trump’s support, both of whom want him to stay in power.

Asked why he supported Argentina in the World Cup, Netanyahu made clear it had more to do with Milei than Messi. “Milei is a huge friend of Israel”, recently calling himself the “most Zionist president on the planet”.

Patagonia was identified as a possible site for the establishment of a Jewish State by Theodor Herzl, the father of political Zionism, in the late 19th century. After World War Two, the southern cone of South America became a haven for fascist war criminals fleeing Europe.

Milei’s government has cut public spending and welfare benefits for Argentine citizens. During the last Argentine summer from December to February, vast Patagonian forests went up in flames after Milei cut Argentina’s fire-fighting budget by 80%!

Many believe the government has agreed to allow Israeli settlement on the scorched earth after an Israeli was caught setting fire to 17,000 acres in Chilean Patagonia over a decade ago.

Milei has already signed agreements with the Netanyahu government to grant Israeli citizens living in Argentina access to all government benefits, including pensions, maternity leave and disability allowance.

In the final, Argentina went down to Spain, one of a few European countries to oppose Israel’s genocide in Gaza and the US-Israeli war against Iran, despite repeated threats by Trump.

Despite Spain’s conquistador and fascist past, much of the world supported Spain today against the land of Maradona and Messi, two of the most popular icons of the beautiful game.

Iggy Rodriguez is a Filipino artist and football enthusiast. His solo exhibition in Kuala Lumpur, ‘Under a Borrowed Sun’, runs till mid-August.

https://www.ipsnews.net/2026/07/dont-cry-for-milei-argentina/

Western Imperialist Unity Split by Rival Priorities

Jomo — Tue, 14 Jul 2026 16:31:53 GMT

Selasih Minda: Budaya, Nilai dan Pembinaan Bangsa.

Western Imperialist Unity Split by Rival Priorities

· Trump Rips off Velvet Glove from Mailed Fist

KUALA LUMPUR, Malaysia, Jul 14, 2026 (IPS) - Trump insists the West must unite on his terms against the Rest, particularly China and Iran. Europe, however, wants greater Trump support for Ukraine’s Zelensky regime to replace Putin’s leadership of Russia.

Europe v China?
In June 2026, European officials accused China of training Russian military personnel to fight in Ukraine.

After Secretary of State Marco Rubio’s Munich appeal for Western unity based on shared race, culture and imperial history, this appears to have been a European effort to strengthen its alliance with the US.

The unsubstantiated charge of Chinese military support to Russia against Ukraine, a claim never corroborated by Kyiv, is expected to worsen relations between Europe and China.

Portraying China as a strategic threat to Europe justifies greater belligerence against Beijing. It no longer seems to matter that China has never endorsed Russia’s invasion of Ukraine.

However, China retains strong ties with Kyiv, calling for a ceasefire and political settlement, while repeatedly offering to mediate between the warring neighbours.

The G7summit of the seven largest rich economies in late June followed the EU in trying to consolidate Western strategic solidarity against Russia, China and Iran.

With financial crises from 1997 threatening G7 legitimacy, then US Treasury Secretary Larry Summers initiated the G20. But the recently expanded G7 role marginalises the more inclusive but less amenable G20.

Neoliberalism over
Since the 2008 global – actually Western – financial crisis, Europe has become even more protectionist.

More Chinese goods have entered European markets, with prices and quality that most others cannot match. For years, Western leaders happily enabled this by liberalising trade, appreciating cheap Chinese imports, for keeping inflation low.

After decades of state-encouraged investment, China’s still growing industrial capacity now supplies the world, enabled by Western-drafted WTO rules.

Before Trump 2.0, Washington had imposed investment restrictions, Section 301 measures, sanctions, tariffs and more following Obama’s ‘pivot to Asia’. Facing less US market access, more Chinese exports have gone elsewhere.

European industry can no longer compete, even where it once led. Instead of neoliberal WTO trade liberalisation, EU protectionism supposedly ‘levels the playing field’.

US advisers increasingly warn European officials that China’s industrial ‘overcapacity’ will soon scale up the ‘China shock’ in most industrially significant supply chains.

China now refines and processes most of the world’s ‘rare earth’ minerals, exercising near-monopsonistic leverage over suppliers by processing at scale at much lower cost.

With China successfully countering Trump’s trade policies, Western leaders worry Beijing will abuse its near-monopolistic control of rare earth elements, which downstream industries need.

Jeffrey Sachs argues that New York and London rare earth market reactions indicate major institutional investors view recent developments as significant.

G7 vs China
Protecting European industry, labour and economic sovereignty is now constrained by the rules Western leaders put in place over decades, often coordinated by the OECD.

Splits inside the EU soon extended beyond commercial faultlines to ostensible strategic interests defined by the fluid geopolitics after the first Cold War.

German car exports to China have been superseded by Chancellor Metz’s military Keynesianism, in line with Trump’s demand for NATO allies to spend much more on the military to greatly strengthen Western military power and global dominance.

French President Emmanuel Macron’s earlier push for unaligned European ‘strategic autonomy’ has given way to a NATO+ strategic view embracing Western imperialism.

Meanwhile, smaller EU member states remain cautious, fearing the collateral effects of new Western ambitions, such as Chinese restrictions on imports that Europe depends on.

Great power rivalry
With the Iran war refusing to fade from daily headlines despite Trump’s on-off-on ceasefire, other myths are also evaporating. Few still believe Israel will accept a ‘two-state solution’ or that peace will prevail between trading partners.

NATO, OECD, G7, EU and other such arrangements have become variable links in the hegemonic US-led bloc. Such coalitions – including Europe, Canada, Australia, and Japan – were never seamless together or fully fit-for-purpose.

Trump expects unilateral US aggression against Washington’s chosen enemies must be fully supported and subsidised by NATO allies, with reluctance deemed disloyal, even antagonistic.

Countries not aligned with the major poles may be alternatively courted and coerced by rival poles, especially by the affluent West. Cooperation among others may be seen and portrayed as proof of the existence of an antagonistic bloc.

Multiple poles are likely to coalesce into the West versus the Rest, competing for support and influence, as those courted try to gain from their suitors.

With reduced government engagement and less sustained inter-state cooperation and order, disruptions in an increasingly anarchic world economy have required governments to prioritise resilience as businesses, consumers and labour face rising costs.

As the US and its allies weaponise economic rules and arrangements to discipline both friends and foes, the world economy is slowing unevenly as prices rise sporadically.

The US-Israel war on Iran underscores how current conflicts can develop in unpredictable ways as states and other significant non-state ‘actors’ innovate strategically in unexpected conditions.

Related IPS Articles

· Rubio Seduces Europe with Imperial Nostalgia

· Massive US War Spending Hike Raises Debt, Taxes, Doubts

· Trump Reboots US National Security Strategy, Foreign Policy

· European Duplicity Undermines Anti-Pandemic Efforts

· Will Europe Wage Peace?

· Globalization, Inequality, Convergence, Divergence

· Trump’s Trade War in Perspective

· Opinion: Global Justice Necessary For Lasting Peace

https://www.ipsnews.net/2026/07/western-imperialist-unity-split-by-rival-priorities/

Should BRICS+ Lead the Global South?

Jomo — Fri, 26 Jun 2026 07:10:47 GMT

Should BRICS+ Lead the Global South?
By Jomo Kwame Sundaram and Nurina Malek
KUALA LUMPUR, Malaysia, Jun 26 2026 (IPS) - 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.
Golden Age
The post-World War Two (WW2) Keynesian ‘Golden Age’ saw significant postwar reconstruction and post-colonial development, especially in South Asia.
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.
G7-encouraged financial liberalisation, especially the IMF-promoted opening of national capital accounts in the 1990s, increased the frequency and impact of crises.
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.
Related IPS Articles
· A New Non-Alignment for the Global South
· Can East Asia Show the Way?
· Will Europe Wage Peace?
· New Geopolitics Worse for Global South
· The Global South in the New Cold War
· IMF Urges Non-alignment in Second Cold War
· Deepening Stagflation: Out of the Frying Pan into the Fire
· War or Peace, Barbarism or Hope
https://www.ipsnews.net/2026/06/should-brics-lead-the-global-south/

Trump’s World Stagflation Also Undermines Dollar Hegemony

Jomo — Fri, 19 Jun 2026 08:30:47 GMT

Trump’s World Stagflation Also Undermines Dollar Hegemony

KUALA LUMPUR, Malaysia, Jun 19, 2026 (IPS) - 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.

Bretton Woods
In July 1944, delegates from some 44 countries met in Bretton Woods, New Hampshire, to create a new multilateral monetary and financial system.

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.

The US federal government could fund its large and growing budget deficits by selling Treasury bills. This debt is now around $39 trillion, over 125% of annual GDP!

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. Dollar-based arrangements are now 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.

Related IPS Articles

· US Fed- Induced World Stagnation Deepens Debt Distress

https://www.ipsnews.net/2026/06/trumps-world-stagflation-also-undermines-dollar-hegemony/

New Geopolitics Threatens More Food Crises

Jomo — Tue, 09 Jun 2026 08:03:33 GMT

New Geopolitics Threatens More Food Crises

By Jomo Kwame Sundaram and Felice Noelle Rodriguez

KUALA LUMPUR, Malaysia, Jun 9 2026 (IPS) - Recent geopolitical trends threaten more food crises, especially in developing countries. A new IPES-Food report urges a strategy of ‘resilient self-reliance’, proposing available opportunities to improve equity, sustainability and solidarity.

Enhancing vulnerability
The New Geopolitics of Food. Navigating policies for resilient self-reliance argues that international food systems have been profoundly transformed by the geopolitical changes of the last four decades.

Geopolitics – referring to political sanctions, trade disputes, military conflicts, multilateral challenges, aid cuts, planetary heating, and corporate interests – is affecting food availability worldwide.

Corporate interests have increasingly reshaped food systems over the last half-century – promoting selective trade liberalisation, deregulation, privatisation, financialization and cost reductions, ostensibly to improve food security efficiently.

Prioritising cost and fiscal savings led to the neglect and closure of buffer stocks. Food systems became more vulnerable as price volatility worsened.

Just-in-time supply chains have also been more susceptible to geopolitical shocks, planetary heating, and market manipulation.

World Bank structural adjustment programmes made developing countries more reliant on food and input imports. Tariffs and sanctions have disrupted food supplies worldwide.

Supplies have become more vulnerable to disruption, whether due to poor harvests or political sanctions. Price volatility has also worsened food insecurity, even in large countries.

Wars in Ukraine, Iran and elsewhere have disrupted supplies, spiking prices, and have most hit poor food-importing countries. Powerful governments have also weaponised food supplies for political reasons, as against Cuba.

Major donor countries have cut aid, with lethal consequences for the most vulnerable, as in Sudan, Palestine, Afghanistan, and the Democratic Republic of Congo.

The legitimacy and capacity of multilateral institutions – such as the UN, World Trade Organization (WTO) and World Health Organization (WHO) – have been deliberately undermined by superpowers abusing international arrangements for their own advantage.

Food prices have been much higher since 2020, following the COVID-19 pandemic, the Ukraine and Iran wars, and other major disruptions. For instance, the Hormuz fertiliser disruptions will hurt food supply for some time to come.

Import bills have risen sharply, worsening debt burdens in poor food-importing countries. Food inflation has hurt low-income communities most, especially when governments juggle imports with debt servicing.

Corporate concentration has also worsened fertiliser and food supply and price volatility, especially hurting smaller producers. Powerful interests have also abused food crises for profit.

Geopolitics has also worsened environmental crises, as planetary heating intensifies extreme weather events, hurting crop yields and food availability.

Managing markets
To enhance food security, governments must effectively influence markets with appropriate policy instruments.

The report proposes adapting policy tools once widely used before corporate-inspired neoliberal reforms, to improve contemporary market management, supply resilience and price stability.

Public stockholdings (PSHs) involve government procurement, storage, and timely release of stocks to enhance food security, including by stabilising prices. PSHs can thus help smallholdings while improving emergency preparations.

Using minimum support prices with its Targeted Public Distribution System, India subsidises grain for two-thirds of its people, while insulating national food prices from international volatility.

Meanwhile, the Economic Community of West African States (ECOWAS) has established a Regional Food Security Reserve to pool members’ stocks and collectively respond to crises.

Supply management
Other supply management mechanisms include production quotas, marketing boards, and import controls.

Market management has also supported other policy goals aimed at improving rural vitality, equity, food sovereignty, environmental sustainability, and democratic participation.

Thus, unlike in the US, Canada’s dairy, poultry, and egg production is subject to quotas and negotiated minimum prices to limit price volatility and stabilise farm incomes.

But policy implementation remains challenging. PSH programmes are often complex and costly, and risk leakage, corruption, and inefficiency.

Government commitments, such as trade agreements, limit policy options. Supply management measures may also raise consumer prices and favour wealthier farmers, as neoliberal critics have been quick to exaggerate.

But these policy tools can also support small-scale producers, reduce waste, strengthen national supply chains, and mitigate risks posed by highly centralised industrial agriculture.

Resilient Self-Reliance
The report promotes resilient self-reliance, requiring appropriate market management to stabilise food supplies and improve equity, sustainability, and food sovereignty.

Resilient self-reliance combines resilience (the ability to withstand and recover from shocks) with food self-reliance (the capacity to meet food needs with domestic production and cooperative trade).

The report recommends innovative trade partnerships, including international buffer stocks and cooperative regionalism, citing CARICOM’s regional food strategy.

Resilient self-reliance upholds food sovereignty norms, emphasising farmer rights, agroecology, territorial markets, and democratic governance, stressing equity, diversity, ecological balance, and flexibility.

Managing markets can also support agroecological transitions, culturally appropriate food diversity, territorial markets, and strategic reserves to cushion shocks.

Vulnerable countries, often due to earlier neoliberal reforms, typically try to reduce their susceptibility to international market volatility, but are usually less able to do so.

Market management mechanisms, agroecological practices, territorial markets, and cooperative trade arrangements can help ensure more stable and equitable food systems.

Stressing the urgent need for policy reform, the authors argue that recent geopolitics not only threatens crises but also offers new opportunities to reform food systems for greater equity, solidarity and sustainability.

For instance, the Hormuz crisis may spur developing economies to accelerate transitions to more renewable energy, thereby reducing their vulnerability to fossil fuel and other energy imports.

Related IPS Articles

· Food Systems and Policies Undermining Food Security

· Food Systems Worsen Diets, Health

· Beware UN Food Systems Summit Trojan Horse

· Struggle for the Future of Food

· Agribusiness Is the Problem, Not the Solution

· Agricultural Trade Liberalization Undermined Food Security

https://www.ipsnews.net/2026/06/new-geopolitics-threatens-more-food-crises/

New US Fed Policy Deepens World Stagflation

Jomo — Tue, 26 May 2026 16:53:16 GMT

New US Fed Policy Deepens World Stagflation

KUALA LUMPUR, Malaysia, May 26 2026 (IPS) - 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.

Ex-Duquesne Capital chairman Stanley Druckenmiller, former George Soros ‘clone’ and right-hand man, has suggested that Fed adoption of reserve management implies it is running out of policy options.

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.

In December 2025, Fed chair Jerome Powell announced that the Fed would purchase $40 billion in Treasury bills each month. This new mode of money creation finances government debt.

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.

Related IPS Articles

· US Fed- Induced World Stagnation Deepens Debt Distress

· IMF Urges Non-alignment in Second Cold War

· Economic Crisis Can Trigger World War

https://www.ipsnews.net/2026/05/new-us-fed-policy-deepens-world-stagflation/

Food Systems and Policies Undermining Food Security

Jomo — Tue, 12 May 2026 06:58:18 GMT

Food Systems and Policies Undermining Food Security

By Jomo Kwame Sundaram and Felice Noelle Rodriguez

KUALA LUMPUR, Malaysia, May 12 2026 (IPS) - Transnational agribusinesses increasingly shape food policies worldwide. Claiming to best address recent food security concerns, they seek to profit more from innovations in food production, processing, and distribution.
Post-war food security
Food policies in the Global South have evolved significantly since World War Two (WWII), especially after nations in Asia and Africa gained independence, often after experiencing wartime food deprivations.

The early post-WWII and post-colonial eras saw new emphases on food security, especially following severe food shortages before, during, and after the war.

Many starved as millions experienced acute malnutrition. The wartime Bengal famine in India claimed over three million lives as Churchill prioritised British imperial interests and military priorities.

After WWII, colonial powers weaponised food supplies for counterinsurgency and population control purposes, especially to overcome popular anti-imperialist resistance.

Many who died were not military casualties but victims of deliberate counter-insurgency food deprivation. Unsurprisingly, food security efforts became a popular policy priority after WWII.

Western-controlled research organisations, including the United Nations Food and Agriculture Organisation (FAO), became highly influential, shaping and even developing post-colonial food security policies.

Green Revolution
Public research institutions were established in developing countries, many of which are affiliated with the Consultative Group on International Agricultural Research (CGIAR).

The Green Revolution initially focused on increasing yields of wheat, maize, and rice. These efforts increased cereal production unevenly during the 1960s and 1970s.

Malthusian logic held that rising life expectancies meant population growth outstripped the increase in food supply, constrained by limited agricultural land.

As government funding from wealthy nations declined, powerful corporate interests and philanthropies became even more influential. They often promoted their own interests at the expense of farmers, consumers, and the environment.

The International Fund for Agricultural Development (IFAD) was established in the 1970s, channelling a small share of windfall petroleum incomes into food and agricultural development.

Soon after, the US transformed its Public Law (PL) 480 program into the World Food Programme (WFP). Thus, some FAO functions were ceded to donor-controlled UN funds and programmes also set up in Rome.

Embarrassingly, an FAO report found WFP food supplies were withheld from Somalia to avoid being taken by the ‘Islamist’ As-Shabaab militia. Chatham House also estimated two to three hundred thousand deaths as a consequence.

Neoliberalism
The counter-revolution against national development efforts in the 1980s undermined government fiscal capacities, import-substituting industrialisation, and food security efforts.

Neoliberal structural adjustment policies involving economic liberalisation were imposed on heavily indebted developing countries, mainly in Latin America and Sub-Saharan Africa.

The Global North promoted trade liberalisation, undermining earlier protection of and support for food and industrial production.

Powerful food conglomerates sponsored and promoted import-friendly food security indicators, undermining FAO and other civil society research and advocacy efforts.

Countries hardly producing any food were highly ranked, as civil society organisations tried to counter with their own indicators, mainly focused on food sovereignty.

Trump 2.0
A new phase has begun with Donald Trump’s re-election as US president.

Trump 2.0’s weaponisation of economic policies and agreements, including food supplies, has ominous implications for countries trying to assert some independence.

Economic and military threats have been used for diverse ends, including economic, political, and other ‘strategic’ goals. Tariffs and sanctions are now part of a diverse arsenal of such weapons deployed for various purposes.

Governments have even been threatened with tariffs and sanctions for personal reasons. Trump has demanded Brazilian ex-President Jair Bolsonaro’s freedom following his failed coup after losing the last presidential election.

Deploying such economic weapons has worsened the deepening worldwide economic stagflation, as various Trump economic and military policy threats exacerbate contractionary and inflationary pressures.

The US-controlled WFP was long used to provide food aid selectively. But there is little sympathy left in Washington for other nations’ food security concerns.

To cut federal government spending, Trump has ended official development and humanitarian assistance, including food aid, while the US remains the world’s leading food exporter.

Nevertheless, Trump may take unexpected new steps to boost farmers’ earnings to recover electoral support before the November mid-term election.

Weaponisation of food aid took an ominous turn during the Israeli siege of Gaza, by calibrating food access to enable selective ethnic cleansing.

The Gaza Humanitarian Foundation attracted hungry residents to its food centres, causing hungry families desperately seeking food to be shot while seeking food.

Poverty is primarily defined by inadequate access to food, while the FAO considers income the main determinant of food insecurity.

Although World Bank poverty measures have generally continued to decline, FAO indicators suggest a reversal of earlier progress in food security over the last decade.

These contradictory trends not only reflect problems in estimating and understanding poverty and food security but also suggest that resulting policies are poorly informed, if not worse.

Professor Felice Noelle Rodriguez is Director of the Centre for Local History and Culture, Universidad de Zamboanga, Philippines.

Related IPS Articles

· Food Systems Worsen Diets, Health

· Food Systems Summit’s Scientistic Threat

· Beware UN Food Systems Summit Trojan Horse

· CORRECTED VERSION: Struggle for the Future of Food

· Address Malnutrition with Food Insecurity

· Rethink Food Security and Nutrition Following Covid-19 Pandemic

· Agribusiness Is the Problem, Not the Solution

· Agricultural Trade Liberalization Undermined Food Security

· Hunger in Africa, Land of Plenty

· Tackle ‘Hidden Hunger’ by Improving Food Systems

https://www.ipsnews.net/2026/05/food-systems-and-policies-undermining-food-security/

US Military Strategy Document Misleads. Deliberately?

Jomo — Tue, 28 Apr 2026 06:37:32 GMT

US Military Strategy Document Misleads. Deliberately?

· Trump Rips off Velvet Glove from Mailed Fist

KUALA LUMPUR, Malaysia, Apr 28 2026 (IPS) - The January 2026 US National Defense Strategy (NDS) departs significantly from those preceding it, including from Trump’s first term. Is it deliberately misleading? Or is actual policy, including war, being driven by other considerations?

National Defense Strategy
The 34-page NDS begins by asserting: “For too long, the US Government neglected – even rejected – putting Americans and their concrete interests first”.

Much like the latest National Security Strategy (NSS), released by Secretary of State and National Security Adviser Marco Rubio in December 2025, the NDS claims to be about putting ‘America First’.

Both documents promise ‘no more business as usual’. They claim to change decades of strategy, supposedly in the national interest. Unlike earlier US military blueprints, the NDS is filled with vague rhetoric and eschews interventions abroad.

But in Trump 2.0’s first year alone, the US bombed ten countries, threatening at least four more, all in the Americas. Despite scant mention in both documents, the US-Israel war on Iran resumed on 28 February!

Europe
The NDS claims the US is reducing its direct military role in Europe but still wants to be influential.

It pledges to remain central to NATO “even as we calibrate US force posture and activities in the European theater” to meet US priorities.

Noting “Russia will remain a persistent but manageable threat to NATO’s eastern members for the foreseeable future”, the NDS insists NATO allies must “take primary responsibility for Europe’s conventional defense”.

The NDS blows hot and cold on Europe’s aggressive support for Ukraine’s Zelensky, envisaging a reduced troop presence on NATO’s borders with Ukraine.

Many European allies complain the Trump administration has created a ‘security vacuum’ by leaving Europe to confront Russia with uncertain US support.

They also complain about Secretary Pete Hegseth’s insistence on “credible options to guarantee US military and commercial access to key terrain”. The NDS insists on more than access to Greenland and the Panama Canal.

Issued days after Trump claimed he had a “framework of a future deal” on Arctic security with NATO chief Mark Rutte, he insisted it ensured the US “total access” to Greenland, long a territory of NATO ally, Denmark.

However, Danish officials insisted formal negotiations had not yet begun. Trump also threatened European nations opposing his Greenland plan with tariffs.

Western Hemisphere
The NDS supports the NSS and Trump’s ‘Donroe doctrine’ focus on the Western Hemisphere, envisaging the Americas as the US backyard.

In his January Davos speech, Canadian Prime Minister Mark Carney noted that recent US actions are disrupting established international norms.

The NDS was issued three days later, after a week of tensions between the White House and its Western allies. Cooperation with the Americas, including Canada, is conditional, to “ensure that they respect and do their part to defend our shared interests”.

It warns the US will “actively and fearlessly defend America’s interests throughout the Western Hemisphere. And where they do not, we will stand ready to take focused, decisive action that concretely advances US interests.”

Trump had declared the US should retake Panama and its Canal, accusing the government of ceding control to China. Later, however, Trump was more ambiguous about ‘taking back’ both the country and the canal.

Many also doubt Trump’s intentions in kidnapping Venezuelan President Nicolás Maduro and his wife, ostensibly for trial on drug charges in the US.

Asia-Pacific
The previous NDS, issued in 2022 under then-President Joe Biden, had deemed China the US’s principal threat. Biden also embraced Trump 1.0’s Indo-Pacific alliance to encircle China.

In contrast, the new NDS describes China as an established power in the Indo-Pacific region that only needs to be discouraged from dominating the US and its allies.

The goal “is not to dominate China; nor is it to strangle or humiliate them… This does not require regime change or some other existential struggle…President Trump seeks a stable peace, fair trade, and respectful relations with China”.

The NDS even proposes “a wider range of military-to-military communications” with Chinese counterparts! The U-turn followed the administration’s retreat from its threatened tit-for-tat tariff escalation after China’s successful retaliation.

Biden’s 2022 NDS promised the US would “support Taiwan’s asymmetric self-defense”. The new NDS offers no such assurances to the self-governing island province of China, which Beijing warns it will take by force if necessary.

The NDS also calls for “a sharp shift – in approach, focus, and tone”, insisting US allies must take more responsibility for countering adversaries such as China, Russia and North Korea.

It insists, “South Korea is capable of taking primary responsibility for deterring North Korea with critical but more limited US support”.

Cutting costs of empire
Like Trump, the new NDS wants allies to pay much more for US ‘protection’.

It echoes his frequent criticisms of allies for taking advantage of previous administrations to subsidise their defence and being ungrateful for US protection.

But the terms of such subordination remain ambiguous and arbitrary, even extortionate and corrupt. Gulf monarchies may now regret their generous donations to the president, apparently to little avail so far.

Trump’s treatment of allies, the Netanyahu-led war on Iran, and continuing US-led efforts to ‘contain’ China suggest both documents offer poor guidance to knowing and understanding, let alone anticipating, US policies abroad.

Nurina Malek is an economics graduate of the University of Wisconsin-Madison, currently working on policy research at the Khazanah Research Institute

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https://www.ipsnews.net/2026/04/us-military-strategy-document-misleads-deliberately/

Trump Rips off Velvet Glove from Mailed Fist

Jomo — Tue, 14 Apr 2026 08:40:54 GMT

Trump Rips off Velvet Glove from Mailed Fist

· Rubio Seduces Europe with Imperial Nostalgia

KUALA LUMPUR, Malaysia, Apr 14, 2026 (IPS) - 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.

Rule of law?
Trade liberalisation has been reversed for at least two decades. Almost all G20 developed nations raised trade barriers following the 2008-09 global, actually Western, financial crisis.

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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Iran War Threatens World Food Crisis

Jomo — Tue, 31 Mar 2026 09:22:38 GMT

Iran War Threatens World Food Crisis

By Jomo Kwame Sundaram and Kuhaneetha Bai Kalaicelvan

KUALA LUMPUR, Malaysia, Mar 31 2026 (IPS) - 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.

Hormuz chokepoint
Since the war began, only a few of the hundred or so vessels, previously passing through the narrow Straits of Hormuz daily, still do so.

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.

The Gulf’s populations, augmented by millions of migrant workers, have become reliant on food imports for wheat, rice, soy, sugar, cooking oil, meat, animal feed and more.

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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Central Bank Hedging Triggered Gold Fever

Jomo — Tue, 24 Mar 2026 08:54:10 GMT

Central Bank Hedging Triggered Gold Fever

By Jomo Kwame Sundaram and Kuhaneetha Bai Kalaicelvan

KUALA LUMPUR, Malaysia, Mar 24, 2026 (IPS) - 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.
De-dollarisation
Some believed that flexible exchange rates, replacing earlier fixed rates, would resolve the ‘Triffin dilemma’ of the ‘dollar system’, due to its role as world reserve currency.

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.

Many countries in the Global South have been purchasing gold rather than dollar-denominated assets for reserve accumulation.

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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Rubio Seduces Europe with Imperial Nostalgia

Jomo — Wed, 11 Mar 2026 06:50:10 GMT

Rubio Seduces Europe with Imperial Nostalgia

By Jomo Kwame Sundaram and Kuhaneetha Bai Kalaicelvan

KUALA LUMPUR, Malaysia, Mar 11 2026 (IPS) - US Secretary of State Marco Rubio’s Munich speech last month seemed to seduce the European elite behind President Trump, against the ‘Rest’, especially the resource-rich Global South.

New international order?
Recognising the deliberate ‘wrecking-ball’ demolition of the post-1945 world order, February’s 62nd Munich Security Conference theme was ‘Under Destruction’.

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

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

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

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

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

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

In January 2026, the US withdrew from dozens of mainly multilateral organisations. Old rules, even those revised during his first term, are out, alarming many accustomed to them.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Massive US War Spending Hike Raises Debt, Taxes, Doubts

Jomo — Fri, 27 Feb 2026 07:03:30 GMT

Massive US War Spending Hike Raises Debt, Taxes, Doubts

By Jomo Kwame Sundaram and Kuhaneetha Bai Kalaicelvan

KUALA LUMPUR, Malaysia, Feb 27 2026 (IPS) - 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.

US military spending increases
After bombing Venezuela, the Trump administration raised its war budget from $1.0 trillion, 47% of discretionary government spending in 2024, to $1.5 trillion!

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.

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

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