Economics

Introduction

In 1974, Muhammad Yunus began experimenting with an initiative to give small loans to impoverished rural women to foster a sense of empowerment through entrepreneurial start-ups – an initiative that was institutionalised through the famous Grameen Bank. In just a couple of years, this initiative had snowballed into the United Nations declaring 2005 the International Year of Microcredit, with Yunus winning the Nobel Peace Prize for economic development.

In an age of international globalisation and neoliberal theories, microcredit seemed to be the solution to the ills of the developing world. Economists, development theorists, and journalists began to discuss the multiple success stories from the Grameen Bank and the vast impact small loans were having on people.

But a much darker reality came to take place. Although Yunus said that credit is a human right, he failed to address the fact that debt follows. Stories like Razia’s became far too frequent.

The Feminisation of Debt: Razia’s Story

Razia had taken out an initial microcredit loan of around $50 from Grameen Bank to put food on the table and pay for her children’s education; to her, this money was a lifeline to meet her family’s immediate needs. She was offered an interest rate of 20%, which she did not initially realise due to her limited fiscal literacy, and she could not pay.

Loan sharks targeted her family with violent threats when they were unable to meet payment deadlines; she had to sell her heirloom jewellery, her belongings, and eventually her home to make the payment – and even now, she continues to face threats from the loan sharks.

Razia’s story is not uncommon and illustrates how a linear model of microcredit has led to the feminisation of debt: women took out these loans to cover basic needs and fulfil their societal roles as caretakers, only to be uniquely burdened and targeted because they were unable to meet deadlines. This led women to be prone to economic vulnerability, social shame due to the procurement of debt, and violence from debt collectors.

Questioning the Efficacy of Microfinance

In addition to Razia’s story, the reality of the Grameen Bank’s efficacy is also up for debate. More and more economists became wary of the narrative that microfinance helps start income-generating enterprises, and recognised that this led many to feed their families or afford education. Another fundamental assumption was that microfinance would empower the poor, especially women, through microenterprises, given their financial bargaining power within the community. The neoliberal social policies used to model microenterprises for poor rural women to sell their labour or to ‘sub-contract’ their services were broadly not adopted, and forced women into disempowering roles in the informal sector.

Dr. Lamia Karim conducted research on the particular claims on gender empowerment by microcredit programmes and ended up creating a ‘local economy of shame’; repayment of these loans was tied to a woman’s standing and honour within the community, and these norms created environments of disempowerment, subjugation, and stress to repay the loans.

Theoretical Frameworks: From WID to GAD

Yunus’s microcredit initiative followed the theoretical prescriptions of Women in Development (WID), which sought to address gender-based economic disparities and integrate women into existing economic systems. The Grameen Bank was able to meet these goals; however, the linear model of empowerment used and the integration of women within the neoliberal economic market failed to meet the overall goals of empowerment.

As organisations, advocates, and economists saw the initial model struggling to meet the holistic goals of empowerment, they integrated theoretical prescriptions from Gender and Development (GAD), which sought to confront the root causes of gender inequality and to meet both the practical and strategic needs of women. This empowers women not only to meet economic goals to ensure survival, but also to develop collective action skills to confront power structures that lead to their subjugation.

Proshika: A New Model for Empowerment

Proshika was formed in 1979 under the WID model and focused on targeting rural communities, but realigned its goals with a GAD model in 2009. Their mission statement was revised to reflect the integration of collective-action training into their microcredit initiatives. As an organisation, they planned to “develop their capacity, so they can claim their due rights from the government” and “ensure life security” – a revolutionary shift within the broader conversation about microcredit.

Proshika had a model very similar to the Grameen Bank microcredit programmes; however, they added organisational spaces for women to meet and discuss community issues, embedding collective action within the programme. When a woman signed up for a loan, she was connected with other women in her community and asked to discuss pressing issues. Proshika organised a total of 42,809 groups; these various groups looked into important societal issues, such as the prevention of child marriage, the prevention of violence against women, and the abolition of dowry practices.

These trainings connected women with existing government systems and taught them how to access the judicial system, enabling them to pursue institutional avenues of change.

Building Social Capital and Political Agency

These spaces within the community allow women to build social credit, serving as places where information flows and as essential spaces for building trust and relationships. They increase social awareness, social interaction outside of one’s family unit, and increase domestic power and civic participation.

Dr Paromita Sanyal studies the role of microfinance agencies in Bangladesh, and credits NGOs such as Proshika for building both vertical and horizontal lines of social credit. Vertical social credit enables women to build essential connections within their own communities, and horizontal social credit allows them to connect with NGOs, politicians, and governing bodies. This axis of power builds political agency within communities and empowers women to challenge restrictive gender norms.

Proshika operates in 8,784 villages, 1,639 unions, 266 sub-districts, 42 districts, and 7 divisions within Bangladesh – they have organised 33,982 female groups across the nation. Through their collective action programmes, they were able to see a statistically significant decrease in child marriages, dowries, and gender-based violence within rural villages.

Towards True Empowerment

Proshika’s microfinance initiative not only enabled income-generating activities in rural villages but also empowered women to make a difference in their communities. Proshika’s success story should serve as a model for reforming existing microfinance institutions and incorporating collective action mechanisms into programmes.

Unlike the Grameen Bank, which focused solely on women’s practical needs, Proshika made an effort to address women’s and community members’ strategic needs. This led to statistically significant decreases in domestic violence and child marriages, as well as increased awareness of government systems and the justice system as a whole, with civic engagement opening accessible avenues for change.

Dr. Andrea Cornwall’s critical feminist analysis of women’s empowerment suggests that true empowerment is about changing asymmetrical power relations and requires building critical consciousness to help people recognise fundamental inequalities. Empowerment is relational and involves the interplay between personal and political to create a process, rather than focusing on an outcome.

Unlike the Grameen Bank, Proshika focused more on the various aspects of empowerment, without adopting a linear view of tangible results. This led to successful grassroots movements that brought attention to women’s structural needs and raised awareness of women’s value to community spaces.

Empowerment comes from changing power relations within the community, and Proshika met both women’s practical and strategic needs. It is essential to address the extreme poverty that women face, but also to build avenues for them to challenge the institutions they participate in.

Canadian Prime Minister Mark Carney arrives in Mumbai on his first official visit to India seeking to reset strained relations and advance an ambitious trade agenda designed to reduce Canada’s dependence on the United States.

The visit marks a significant recalibration in Ottawa’s foreign policy. After years of diplomatic friction under Justin Trudeau, Carney is positioning Canada as a pragmatic middle power, intent on diversifying alliances and building new trade corridors with fast-growing economies.

From Mumbai, Carney will travel to New Delhi for talks with Indian Prime Minister Narendra Modi, with negotiations expected to accelerate toward a comprehensive trade agreement that Canadian officials hope to conclude by November.

Repairing a Fractured Relationship

Canada–India relations deteriorated sharply after Trudeau publicly alleged that Indian agents were linked to the assassination of a Canadian citizen associated with Sikh separatism. New Delhi strongly denied the accusation, and diplomatic ties cooled considerably.

Carney’s itinerary reflects a deliberate attempt to lower political temperatures. Unlike previous Canadian leaders, he will not visit Punjab, a state central to India’s Sikh population and a major source of immigration to Canada. Sikh separatist activism has long been a sensitive issue in bilateral relations, and avoiding the region signals Ottawa’s intent to keep the focus on trade and investment rather than diaspora politics.

This shift has drawn criticism from some Sikh organizations in Canada, which argue that Ottawa risks sidelining concerns about foreign interference. However, Carney’s government insists domestic security remains non-negotiable while economic engagement proceeds.

Trade as Strategic Rebalancing

The India trip forms part of a broader diplomatic tour that includes Australia and Japan — countries Carney views as fellow “middle powers” capable of shaping a more diversified global trading system.

The strategy is driven by two pressures.

First, Canada’s economic dependence on the United States leaves it exposed to protectionist policies, including tariffs and threats to trade access. Second, global supply chains are being reshaped by geopolitical rivalry, creating opportunities for countries that can act as connectors rather than competitors.

India, now the world’s most populous nation and one of its fastest-growing major economies, represents both a vast consumer market and a strategic counterweight in global trade realignments.

Reports suggest negotiations may include a long-term uranium supply agreement worth billions of Canadian dollars, alongside cooperation in oil and gas, artificial intelligence, quantum computing, education and environmental technology. Such sectoral diversification would deepen economic interdependence beyond traditional commodities.

The momentum is reinforced by the European Union’s recent trade deal with India, which has raised expectations that New Delhi is increasingly open to structured economic partnerships with Western economies.

A Style Contrast With the Trudeau Era

Carney’s approach also signals stylistic change. Trudeau’s 2018 India visit drew criticism for perceived overemphasis on symbolic gestures and cultural theatrics, which some observers argued distracted from substantive negotiations.

Carney, a former central banker, projects a more restrained and technocratic image. Business leaders describe the trip as tightly focused on capital flows, market access and long-term economic sovereignty rather than domestic political optics.

This repositioning aligns with Carney’s broader message that Canada must adapt to what he calls a reordered global economy one less dominated by a single superpower and more defined by regional blocs and mid-sized powers coordinating strategically.

The “Middle Powers” Doctrine

Carney’s Davos speech earlier this year laid out the intellectual framework for this pivot: a coalition of middle powers pursuing “principled and pragmatic” cooperation to hedge against great-power volatility.

India fits squarely into that concept. It maintains strategic autonomy, balancing relations with the United States, Europe, Russia and the Global South. Canada hopes to mirror that flexibility while leveraging its strengths in energy, natural resources, finance and advanced technology.

After India, Carney’s stops in Australia and Japan underscore the Indo-Pacific tilt of Canada’s strategy. Together, these engagements suggest Ottawa is prioritizing economic resilience over ideological alignment.

Can Trade Override Political Tensions?

The key question is whether economic pragmatism can overcome lingering distrust.

India remains sensitive about Sikh separatist activism in Canada. Canadian authorities remain concerned about allegations of foreign interference. These issues are unlikely to disappear entirely.

However, both governments appear motivated by economic incentives. Canada seeks market diversification and foreign investment. India seeks reliable energy supplies, advanced technology partnerships and expanded global trade networks.

If negotiations proceed smoothly, Carney’s visit could mark a turning point not a full reconciliation, but a reset grounded in mutual economic interest rather than political grievance.

In an era of fragmented globalization, Ottawa is betting that strategic trade partnerships with rising powers like India can secure both growth and autonomy. Whether that bet pays off will depend on how effectively Canada balances principle with pragmatism in one of its most complex bilateral relationships.

With information from Reuters.

Across advanced and emerging economies, central bankers are confronting an increasingly assertive political class. Populist leaders and fiscally strained governments are pressing for lower interest rates, easier financing and, in some cases, greater influence over monetary authorities themselves.

The response from central banks has been firm but not without risk. In defending their independence, they risk appearing political, blurring the very boundary they are trying to protect.

The U.S.: Digging In at the Federal Reserve

In the United States, the confrontation has been direct. Jerome Powell has faced repeated criticism from President Donald Trump over interest rates, with Trump arguing that tighter policy undermines economic growth.

Rather than soften its stance, the Federal Reserve has emphasized its legal independence and data-driven approach. Powell has repeatedly stressed that decisions will be based on inflation and employment data, not political preference.

The stakes are high. With U.S. federal debt at $36 trillion and large refinancing needs ahead, pressure to keep borrowing costs low is intensifying. Any perception that the Fed is yielding to political demands could unsettle bond markets and erode confidence in its anti-inflation mandate.

Europe: Pre-Emptive Exits and Institutional Defense

In Europe, resistance has taken a subtler form. François Villeroy de Galhau is stepping down from the Bank of France months before elections that polls suggest could benefit the far right. Though officially described as a personal decision, the move is widely seen as an attempt to preserve institutional continuity before a potential political shift.

Similarly, Christine Lagarde has not ruled out the possibility of leaving the European Central Bank before completing her term, even while stating her baseline intention is to stay.

Such pre-emptive departures highlight a paradox: central banks are trying to shield themselves from politicization, yet early resignations can themselves be interpreted as political maneuvers. Critics argue this risks undermining the perception of neutrality.

European institutions are legally insulated by treaties, but they are not immune to democratic pressures particularly as high debt levels in countries such as France and Italy fuel debates over whether central banks should help finance public spending.

Japan: Market Discipline as a Shield

At the Bank of Japan, the dynamic is slightly different. Prime Minister Sanae Takaichi appointed dovish economists to the board, a move seen by some as an effort to temper rate hikes.

Yet the BOJ has maintained its commitment to policy normalization. In Japan’s case, currency markets have provided reinforcement. A weakening yen during earlier periods of ultra-loose policy heightened political sensitivity to inflation risks. Market volatility effectively strengthened the central bank’s hand, illustrating how investor reactions can discipline governments as well as monetary authorities.

Why Independence Matters

The battle is about more than institutional pride. Central bank independence emerged in the late 20th century as a response to the inflationary spirals of the 1970s. Countries that subordinated monetary policy to political cycles often experienced runaway prices and capital flight.

More recent examples underscore the danger. In countries such as Turkey and Argentina, political interference in rate-setting has coincided with surging inflation and currency instability.

For advanced economies now grappling with record sovereign debt and rising defense spending, the temptation to lean on central banks is clear. Lower rates ease fiscal pressure. But if investors believe policy is being distorted for political convenience, borrowing costs may ultimately rise rather than fall.

The Blurred Line Between Mandate and Mission Creep

The past decade has complicated the picture. Massive bond-buying programs during the global financial crisis and the pandemic pulled central banks deeper into fiscal territory. In Europe and Britain, limited climate-related initiatives sparked accusations of overreach.

Critics argue that such expansions of mandate have made central banks more politically visible and therefore more vulnerable.

This creates a delicate trade-off. Remaining silent in the face of political pressure may preserve appearances but risk policy distortion. Publicly resisting may safeguard inflation credibility but invite accusations of entering the political arena.

Markets as Final Arbiter

Ultimately, financial markets may determine how much room politicians have to maneuver. Governments can pressure central banks, but they cannot easily compel investors to finance deficits at artificially low rates.

If markets sense that independence is eroding, they may demand higher yields, weaken currencies or pull capital outcomes that raise inflation and undermine growth. In that sense, investor discipline can reinforce central bank autonomy more effectively than legal protections alone.

A Costly Defense

Central bankers today face a more hostile and fragmented political landscape than their predecessors. The old assumption that technocrats could quietly manage inflation while politicians handled everything else no longer holds.

By fighting back, they defend hard-won credibility. But in doing so, they risk appearing as participants in political struggles rather than neutral arbiters of economic stability.

The challenge is no longer simply setting interest rates. It is preserving trust in institutions designed to stand above politics at a time when politics increasingly refuses to stand aside.

With information from Reuters.

Economists are cautiously optimistic that advances in artificial intelligence could boost productivity across major economies, potentially helping governments manage soaring debt. Debt levels in most rich nations already exceed 100% of GDP and are projected to rise further due to ageing populations, higher defence spending, climate commitments, and rising interest payments.

U.S. policymakers, in particular, see AI as a potential driver to lift post-2008 productivity and free workers for higher-value tasks. Yet experts warn that even a strong AI-driven growth surge would not fully offset the structural pressures on public finances.

AI’s Potential Impact on Public Debt

The OECD and economists working with Reuters estimate that a productivity boost from AI could lower projected debt in OECD countries by up to 10 percentage points by 2036. That would reduce the expected rise from roughly 150% of GDP to around 140%, still sharply higher than current levels of approximately 110%.

In the U.S., best-case scenarios suggest debt could rise to 120% of GDP over the next decade instead of 100%, with one economist projecting little change. The key variables include whether AI creates more jobs than it displaces, whether firms pass productivity gains to workers via wages, and how governments manage spending.

Demographics and Limits

Demographics remain a central constraint. Ageing populations and entitlements tied to them are the root causes of long-term debt growth. Economists note that even with a productivity surge, labour shortages and slower immigration could offset AI gains. Countries like Italy and Japan may see smaller benefits from AI due to lower adoption rates and smaller sectors that can leverage the technology.

Fiscal Uncertainty

AI could raise government revenues through higher productivity and wages, but the effect is uncertain. If automation primarily benefits profits and capital rather than labour, fiscal gains could be limited. Additionally, public spending may rise alongside growth, dampening potential debt relief. Social security and other entitlement programs, indexed to wages, will continue to pressure budgets regardless of AI-driven efficiency.

Interest rates and debt servicing costs add another layer of uncertainty. Economists warn that recessions or financial shocks could prevent AI-driven productivity gains from providing timely relief.

Analysis

AI offers a potential “breathing room” for overstretched economies, buying time for governments to tackle structural deficits. Even if growth rises to 3% in the U.S. through 2040 above Federal Reserve expectations it will not solve fundamental fiscal challenges.

Economists stress that AI is a supplement, not a replacement, for fiscal reform. Rising productivity may help governments manage debt growth more sustainably, but without structural policy adjustments addressing demographics, entitlement programs, and spending priorities, the debt trajectory remains precarious.

Ultimately, while AI could improve efficiency and output, it is unlikely to carry the heavy lifting required to stabilize public finances on its own.

With information from Reuters.

President Donald Trump has repeatedly touted the U.S. economy as “roaring” and declared inflation “defeated” since returning to office in January 2025. In his recent State of the Union address, he called it “the golden age of America,” claiming unprecedented economic prosperity.

However, a new Reuters/Ipsos poll suggests that most Americans across party lines do not share that view. The poll, conducted online with 4,638 adults and a two-point margin of error, finds that 68% of respondents disagree with the statement that “the U.S. economy is booming.” Even among Republicans, who form Trump’s political base, opinion is sharply divided: 56% agree the economy is booming, while 43% disagree.

Cost of Living Remains Top Concern

Americans interviewed cited rising costs as their primary worry. In Tennessee, manufacturing worker Marcus Tripp said: “Even as a two-income household, we are struggling… I am worried more about how much my rent and everything is going up than I am about whether the guy down the street has citizenship documents or not.”

Poll respondents overwhelmingly rejected Trump’s claim that inflation has been defeated. Only 16% agreed with the statement that “there is hardly any inflation in the U.S.,” while 82% of independents and 72% of Republicans disagreed. Democrats were even more skeptical, with a strong majority rejecting the notion of a booming economy.

Awareness of Trump’s Economic Policies

The poll also revealed limited public knowledge of Trump’s specific proposals:

• 44% had never heard of the plan to restrict large investors from buying single-family homes.
• 48% were unaware of the proposed cap on credit card interest rates at 10%.
• By contrast, 78% were aware of tariff increases on imported goods, with many expecting the tariffs to raise the cost of living 54% overall, including 69% of Democrats and 42% of Republicans.

Some voters expressed frustration that policies emphasizing tariffs may not address the issues they feel most acutely. Independent voter Tiffany Ritchie of Corpus Christi said, “We’re not going to tariff our way out of this.”

Political Implications Ahead of Midterms

The poll’s results are a warning for Trump and the Republican Party as they head into the November 3 midterms, defending majorities in both the House and Senate. Cost-of-living concerns are emerging as a decisive factor for voters, potentially outweighing immigration and other campaign issues that Trump has emphasized.

Primaries are already underway in states such as Texas, North Carolina, and Arkansas, with both parties beginning to select candidates for the midterms. Economists predict modest growth this year, but few expect the kind of “booming” economy Trump describes.

Analysis

From my perspective, the poll highlights a growing disconnect between Trump’s rhetoric and the lived experience of many Americans. While the administration touts economic successes, households are still struggling with rising rents, groceries, and energy costs.

The division among Republicans is also notable. While Trump’s base remains partially supportive of his economic claims, nearly half of the party’s voters see little evidence of a boom. This split could weaken the Republican message in key battleground districts, especially where cost-of-living pressures are most acute.

Moreover, the limited public awareness of some Trump policies suggests that policy communication is lagging. Tariffs are well-known, but policies targeting housing and credit remain obscure, potentially limiting their political impact.

In short, while Trump frames the U.S. economy as a “golden age,” the reality for many voters is very different. Rising living costs, skepticism among independents, and division within his own party suggest that economic messaging alone may not be enough to secure midterm victories.

With information from Reuters.

Artificial intelligence could deliver the productivity surge policymakers have been hoping for since the global financial crisis. But even if it does, economists caution that faster growth will not be enough to solve the mounting debt burdens weighing on advanced economies.

Public debt already exceeds 100% of GDP across most rich nations and is projected to rise further as ageing populations strain pension and healthcare systems, interest bills climb and governments ramp up defence and climate spending. Against that backdrop, AI is increasingly being framed as a potential fiscal lifeline.

The reality is more complicated.

Productivity: The “Magic” Ingredient-With Limits

Economists broadly agree that sustained productivity growth can dramatically improve fiscal dynamics. Higher output boosts tax revenues without raising tax rates, makes existing debt easier to service and reassures bond investors worried about long-term solvency.

At the Organisation for Economic Co-operation and Development (OECD), modelling suggests that if AI meaningfully raises labour productivity and if employment also expands public debt across member countries could be about 10 percentage points lower by the mid-2030s than otherwise projected. Even then, debt would still climb to roughly 150% of GDP on current trajectories, up from around 110% today.

In the United States, best-case projections from several economists suggest debt could rise more gradually, to roughly 120% of GDP over the next decade rather than accelerating more sharply. But that still represents historically elevated levels.

As one economist put it, productivity is “like magic” for fiscal sustainability yet today’s debt challenges are too large for productivity gains alone to offset.

Demographics: The Structural Headwind

The fundamental constraint is demographic.

Ageing populations mean fewer workers supporting more retirees, pushing up pension and healthcare costs. In the United States, Social Security alone accounts for roughly one-fifth of federal spending, and benefits are indexed to wages. If AI lifts wages, it may simultaneously increase future benefit obligations.

Slowing immigration in some countries, particularly the U.S., compounds the issue by limiting labour force growth. If AI boosts output per worker but the total number of workers stagnates or declines, overall fiscal relief may be limited.

In short, AI may buy time but it does not reverse the demographic arithmetic driving long-term deficits.

Growth vs. Interest Rates: A Delicate Balance

For debt sustainability, what matters is not just growth, but the relationship between growth and borrowing costs.

If AI-driven productivity pushes economic growth above interest rates for a sustained period, governments can stabilise or even reduce debt ratios more easily. But if faster growth also lifts real interest rates for example, because higher productivity raises returns on capital then debt servicing costs could rise in parallel.

This debate is already unfolding among policymakers at the Federal Reserve, where officials are assessing whether AI could permanently raise the economy’s potential growth rate.

Bond markets will be decisive. Since the pandemic, investors have shown a willingness to punish governments perceived as fiscally profligate. Higher yields can quickly offset any growth dividend from technological gains.

Employment and Wages: The Distribution Question

Much depends on how AI reshapes labour markets.

If AI complements workers and creates new categories of employment, tax revenues may rise meaningfully. But if automation displaces workers faster than new jobs are created, or if profits accrue disproportionately to capital rather than labour, fiscal gains could disappoint.

Capital income is often taxed more lightly than wages. A productivity boom concentrated in corporate profits rather than payrolls may widen inequality without generating proportionate public revenue.

On the spending side, governments might benefit from efficiency gains in public administration. Yet history suggests higher growth can also lead to higher spending demands from infrastructure upgrades to social transfers.

No Substitute for Fiscal Reform

Even in optimistic scenarios where AI lifts U.S. growth closer to 3% annually for an extended period, debt ratios are projected to stabilise at elevated levels rather than return to pre-crisis norms.

In pessimistic scenarios where AI disappoints or a recession strikes before productivity gains materialise debt trajectories could worsen significantly, potentially reaching levels that trigger market instability.

The consensus among economists is clear: AI can ease fiscal pressure, but it cannot substitute for structural reforms. Addressing entitlement sustainability, improving tax efficiency and managing spending priorities remain central.

A Race Against Time

There is also a sequencing risk. If financial markets grow nervous about fiscal trajectories before AI-driven gains are realised, borrowing costs could spike. In that case, the productivity dividend may arrive too late to calm bond investors.

Technological revolutions historically take time to diffuse across economies. Infrastructure, regulation, workforce training and corporate adoption all shape how quickly productivity benefits materialise.

For debt-laden economies, the gamble is that AI’s boost will be large, broad-based and timely. That is possible but far from guaranteed.

AI may help governments breathe easier. It will not absolve them of the harder political choices required to put public finances on a sustainable path.

With information from Reuters.

And while grid physics remains the starting point, the innovations shaping the 2030 landscape extend far beyond conductors and transmission lines. The energy transition of the early 2020s was framed as a moral and political imperative. But from 2026 onward, the debate shifts decisively. The center of gravity moves from ideological declarations to hard technical realities, material constraints, and industrial competitiveness. The path to 2030 is no longer about announcing targets; it is about solving the physical, economic, and infrastructural parameters that will determine whether decarbonization can advance without destabilizing grids or bankrupting entire sectors.

EU deserves a clear reminder. LNG corridors from the Atlantic and the Mediterranean are helpful, but they cannot resolve Europe’s energy challenges. They remain complementary measures. They do not correct the structural difficulties created over decades. A persistent green ideological rigidity limited the role of firm capacity. Domestic hydrocarbon production was phased out. Permitting essential infrastructure slowed significantly. These choices had predictable effects. They overlooked grid physics, materials, storage, reliability, and industrial policy. They weakened the system Europe now relies on. Three forces now shape the landscape. Grids must remain stable under very high RES penetration. Critical materials, from copper and aluminum to gallium, are becoming scarce and expensive. Existing fossil infrastructure must be used strategically to avoid premature asset stranding. Innovation is adjusting to these realities. New conductors, new storage solutions, new fuels, and updated regulatory frameworks are emerging because the previous assumptions no longer hold.

Materials and Conductors: The Silent Revolution in Grid Reinforcement

The rapid expansion of data centers and large RES clusters has exposed the limits of traditional copper‑based infrastructure. Prices, weight, and installation requirements make the full network reconstruction prohibitive. Aluminum, meanwhile, cannot handle the required current densities. This is where copper‑clad aluminum (CCA) becomes critical: it offers higher conductivity than aluminum, lower cost and weight than copper, and reduced thermal load in dense electrical environments. By 2030, CCA will be widely deployed in data centers, EV fast‑charging networks, and medium‑voltage grids across Europe and North America. Instead of rebuilding entire networks, operators turn to targeted CCA upgrades to ease congestion and unlock dormant capacity. Yet another constraint emerges: transformer shortages and slow permitting, now as acute as the bottlenecks facing RES deployment.

Hydrogen and Methane Pyrolysis: The End of the Universal Green Solution

The myth of the early transition collapses in the 2020s. Hydrogen is no longer viewed as a universal green solution. Life‑cycle analyses show that green hydrogen is only as clean as the electricity feeding the electrolyzers, while methane leakage undermines the value of blue hydrogen. This opens the door to methane pyrolysis, which produces hydrogen and solid carbon with lower emissions, provided methane leakage is tightly controlled. Yet its economic viability depends on stable, low‑cost methane supply. The shift from blue to pyrolytic hydrogen changes the chemical approach, and the geopolitics. Pyrolysis does not free Europe from geopolitical exposure because the continent still depends on external methane suppliers, such the US, Qatar, Algeria, East Med producers, and African exporters. Europe’s pursuit of low‑carbon hydrogen therefore intersects with the strategic interests of actors whose priorities do not always align with EU climate policy.

Hard Carbon and Sodium‑Ion Batteries: The New Geopolitics of Storage

As hydrogen is reconsidered, another development is quietly reshaping the storage landscape. Research from 2024–2025 shows significant advances in sodium‑ion batteries (SIBs). They use hard‑carbon anodes and improved electrolytes that extend performance, safety, and lifespan. Their cost structure is attractive, and their reliance on abundant materials makes them resilient to supply‑chain shocks. They remain short‑duration technologies, typically up to 10 hours, but they offer a robust alternative for stationary applications where energy density is less critical. Lithium keeps its lead in mobility and high‑power applications, yet it gradually loses its monopoly in grid storage.

The absence of lithium, cobalt, and nickel drastically reduces dependence on unstable or concentrated supply chains. Sodium, abundant and low‑cost, makes SIBs ideal for stationary applications. By 2030, SIBs will be deployed across industrial sites, distribution grids, substations, and hybrid long‑duration systems, often combined with hydrogen or thermal storage. China leads production, while Europe attempts to build its own supply chain to reduce import dependence. Sodium‑ion technology is emerging as a strategic counterweight to China’s dominance in lithium refining and cathode materials. By shifting to sodium, a resource with no geopolitical constraints, Europe and India seek to dilute China’s leverage over global battery supply chains. Storage is no longer just a technical field; it is a geopolitical chessboard.

Long Duration Storage Beyond Lithium

Lithium batteries remain essential for short‑duration storage, but the 2030 system increasingly depends on Long Duration Energy Storage (LDES). The cause is simple: high RES penetration creates multi‑day and multi‑week imbalances that no battery chemistry can economically cover. Hydrogen becomes the backbone of these long‑duration needs, not because of efficiency, but because it provides security of supply and seasonal flexibility. In shipping, e‑methanol emerges as the most practical ambient‑temperature hydrogen carrier, balancing energy density, safety, and infrastructure readiness.

The LDES ecosystem expands rapidly. Iron‑air and zinc‑air systems offer multi‑day discharge at low cost. Flow batteries provide long cycle life and deep‑discharge flexibility. Thermal storage and mechanical systems add further diversity. Together, these technologies form a portfolio that complements lithium and sodium‑ion, each serving a different segment of the duration curve.

Hydrogen‑Ready Infrastructure and the Management of Stranded Assets

This shift toward hydrogen‑compatible combined‑cycle gas turbines (CCGTs) is not ideological but economic. It allows investors to continue amortizing fossil infrastructure while gradually reducing emissions. Technical challenges such as, flame speed (much higher than natural gas), NOₓ formation, and material stress, are significant. By 2030 many such units will operate with 20–30% hydrogen blends. They will not eliminate emissions but provide a transition bridge and prevent massive asset write‑offs while stabilizing the grids during low‑RES periods. In fact, dispatchable capacity is becoming a strategic asset in a world where energy security is increasingly weaponized. From Russia’s pipeline leverage to Middle Eastern LNG politics, the vulnerabilities are unmistakable. In this environment, hydrogen‑ready CCGTs are not merely engineering choices; they function as geopolitical insurance policies.

SMRs and the Return of Firm Power

Small Modular Reactors (SMRs) will move from concept to implementation in the late 2030s. Their value lies not only in nuclear physics but in industrial standardization, factory manufacturing, harmonized licensing, and integration into industrial heat networks. By 2030, the first SMRs will operate as firm‑power anchors for mining regions, isolated grids such as data centers, and large industrial sites. In a world of tightening supply chains and rising geopolitical competition, their role becomes both technological and strategic.

CBAM and the New Era of Tariff Diplomacy

As the transition moves from engineering constraints to system‑wide restructuring, the pressures are no longer purely technical. Materials, grids, storage, and firm capacity define what is physically possible and the global environment in which these technologies operate is increasingly shaped by trade policy, industrial strategy, and geopolitical competition. This is where the next layer of the transition emerges: the regulatory and commercial instruments. They determine who captures value, who bears cost, and how global supply chains realign. Among these instruments, none is more consequential than the EU’s Carbon Border Adjustment Mechanism. This mechanism does not offer technical solutions, it turns decarbonization from a voluntary commitment to a tool of trade. Exporters of steel, aluminum, cement, fertilizers, and electricity must prove low carbon intensity or pay tariffs that erase their competitiveness. For the European Union, CBAM is expected to accelerate investment in low‑carbon processes, often supported by IPCEI programs. Yet the counter‑argument gains weight: CBAM relies on ideological rather than technocratic CO₂ accounting. It ignores life‑cycle emissions, methane leakage outside the EU, the energy intensity of European grids, and emissions embedded in imports. Instead of reducing global emissions, it risks creating carbon leakage under another name.

CBAM sits at the intersection of great‑power competition and the emerging fracture lines of the global economy. For the United States, it is both challenge and opportunity. First, a challenge because European border carbon pricing can collide with U.S. industrial and trade interests. Secondly, an opportunity because, together with the Inflation Reduction Act, it can support a transatlantic low‑carbon industrial block capable of setting de facto global standards. Whether Washington and Brussels coordinate or drift into regulatory rivalry will shape investment flows for decades.

For China, CBAM is more than a tariff, it signals that the EU is prepared to weaponize market access in the name of climate policy. Beijing reads it alongside export controls on critical technologies and restrictions on Chinese clean tech in Europe. In response, China accelerates its own standards, consolidates its dominance in batteries, solar and critical materials, and secures long‑term offtake agreements with countries that feel penalized by European rules. CBAM thus reinforces Beijing’s narrative of Western “green protectionism” aimed at containing China’s industrial rise.

The BRICS expansion adds another layer. Many BRICS and “BRICS‑plus” countries, from India and Brazil to Gulf and African states, view CBAM as a unilateral imposition of European norms on their development paths. As they deepen South‑South cooperation, build alternative financial mechanisms, and explore their own carbon accounting systems, CBAM risks catalyzing parallel regulatory ecosystems: one centered on the EU, another around a looser BRICS‑led bloc rejecting externally imposed climate conditionality.

For much of the Global South, CBAM reinforces a long‑standing grievance: that advanced economies, having built their prosperity on cheap fossil energy, now deploy climate policy in ways that restrict others’ industrial development. Many fear it will confine them to raw‑material roles while eroding the competitiveness of their energy‑intensive sectors. This perception fuels diplomatic pushback, draws some countries closer to China or BRICS frameworks, and complicates Europe’s attempt to position itself as a partner in a “just transition. In this sense, CBAM is more than a tool of market protection or climate ambition. It is a lever that can either place Europe at the center of a rules‑based low‑carbon trade system or accelerate the fragmentation of the global economy into competing regulatory and geopolitical blocks.

Conclusion

The energy transition is not a single technological narrative. Some innovations concern grid physics, conductivity, stability, and thermal management; others shape the energy mix, storage, and industrial architecture of the coming decade. The energy system of 2030 will not be shaped by slogans but by physics, materials, and economics. The question is whether Europe will adapt in time, or whether reality will violently adjust its ambitions.

The 10th summit of the Organization of Turkic States (OTS) was held on November 3 in Astana, the capital of Kazakhstan. The main theme of this year’s summit was ‘Turk Time’. The organization, which has set goals such as the long-term Vision of the Turkic World 2040 and the short-term Strategic Roadmap of the OTS 2022-2026, has added a new vision with ‘Turk Time’. So, is the Turk Age possible in the 21st century? Could Turks become an effective political center in the new era? Is Turk Time just a slogan? Or is it based on reality?

Turmoil in the Current Global System gave birth to the Organization of Turkic States

The 2008 economic crisis, the COVID-19 pandemic, and the weakening of United States (US) hegemony that emerged with its military withdrawal from Afghanistan and Iraq left great chaos and a vacuum in international order.[1] Especially with the COVID-19 pandemic and the US debt ceiling crisis, the US hegemony tool, dollar hegemony, has suffered a major shake-up and has become controversial.[2] This vacuum and chaotic environment triggered an effort to build a new alternative order for countries that were uncomfortable with the existing international order, and to gain a position in the new order to be established. As the rise of Asian economies continued in the global economy, organizations such as the Shanghai Cooperation Organization and BRICS accelerated the construction of an alternative multipolar order. The world was divided into two camps: defenders of the old unipolar world order and proponents of the new multipolar world order. The weakening of US hegemony and global chaos paved the way for the OTS. The transformation of the organization in 2021 coincided with the US troop withdrawal from Afghanistan and Azerbaijan’s victory in the Second Nagorno-Karabakh War.

Turkey, in particular, plays a decisive role in the OTS. In recent years, Turkey has experienced sharp ruptures in its relations with the US, EU, and NATO. The weakening of Turkey’s relations with the West is a reflection of the decline of US hegemony in the global order. At the same time, Turkey’s increasing cooperation and friendship with Russia and China played a positive role in the establishment of the OTS. The organization should be seen as an attempt to become part of a multipolar world order. For example, Turkish President Recep Tayyip Erdogan’s statement that the world is bigger than five is an expression of the need to build a just multipolar world order. As the Turkic states increase cooperation, trade, and prosperity among themselves, they serve regional peace and the establishment of a just order. With the OTS, Turkey aims to increase prosperity in the region, improve infrastructure, maintain a common culture, and increase its defense and counter-terrorism cooperation capabilities. Turkey’s objectives in the OTS in Central Asia are an effort to take part in a multipolar world that will strengthen peace and prosperity. President Recep Tayyip Erdogan aims to continue the Turk Time with Turkey and for the Turkic world to become the world’s rising power.[3] Turkey wants to be a subject, not an object, in the multipolar order. In sum, Turkey is trying to play a stronger role in the new international system to be established by establishing good relations with the advocates of the multipolar world order.

Organization Strengthens by Institutionalizing

After the transformation of the Cooperation Council of Turkic Speaking States into the OTS with the Istanbul summit in 2021, the organization entered the process of building a stronger institutional infrastructure. Analyzing the outcomes of the Astana Summit, efforts to complete the institutionalization of the organization stand out. This year, the organization continued to increase institutionalization in areas such as the Civil Protection Mechanism, the Turkic Judicial Training Network, the Union of Notaries of the Turkic World, the Turkic Investment Fund, and the Organization of Trade Unions of Turkic States. The final declaration expresses satisfaction with the activities carried out within the framework of the organization in one year.[4] For example, the Alliance of Turkic News Agencies (ATNA) was established after the summit between Turkey’s news agency Anadolu Agency (AA), Azerbaijan State News Agency (AZERTAC), Kyrgyz National News Agency (Kabar), Uzbekistan National News Agency (UzA), and Kazakhstan’s news agency Qazcontent. After the establishment of ATNA, Binali Yıldırım, Chairman of the OTS Council of Elders, said: “We aim to bring the truth to the people in the fastest way and to prevent colonialist countries from covering the events. Serdar Karagöz, who was elected president of ATNA, emphasized the importance of combating disinformation.[5] In short, in the field of media, OTS has placed establishment of a media network that will challenge the media of the unipolar world and represent the oppressed at its center. During the next few years, it is possible to predict that the organization will institutionalize in various fields.

The organization Aims to Strengthen Trade

There are two important cooperation areas between the member states of the OTS. The first is the development of cooperation in the energy field. Turkic states are rich in valuable minerals such as energy, natural gas, oil, and uranium. Therefore, the member states of the organization tend to deepen their cooperation in the field of energy. The second meeting of the OTS Working Group on Energy Cooperation of the Ministers Responsible for Energy of the OTS was held on September 28, 2022, in Almaty, Kazakhstan. The parties adopted the OTS Energy Cooperation Program and the related action plan for 2023-2027, which includes the exchange of information and ideas on legislation and national programs in the energy sector, renewable and alternative energy sources, fossil fuel energy, nuclear energy, energy efficiency, dissemination of new technologies, capacity-building programs, and enhancing cooperation in the international arena. Turkish Foreign Minister Hakan Fidan emphasized the importance of making efforts to make the Middle Corridor even more attractive for investment and to transport trans-Caspian resources, particularly Turkmen gas, to Turkey and Europe. Strategic energy infrastructure projects such as the Organization, Baku-Tbilisi-Ceyhan, Baku-Tbilisi-Erzurum, Southern Gas Corridor, Trans Anatolian Natural Gas Pipeline Project (TANAP), and Trans Adriatic Pipeline Project (TAP) contribute to the prosperity of Turkic states and European and global energy security. [6]

The second is to take steps to strengthen trade along the Silk Road belt. The member states of the OTS had a trade volume of $ 700 billion. However, only $ 18 billions of this trade volume is carried out among the member states themselves. This situation is the main driving factor in the establishment of the organization. Because Turkey and the member states are determined to develop trade among themselves. The member states of the organization focus on removing or facilitating trade barriers among themselves. Eliminating trade barriers and providing infrastructure investments on roads. In this respect, there is no other way but to work in harmony with the Belt and Road Initiative of the OTS. The implementation of the Action Plan for the Implementation of the 2023-2027 OTS Transport Connectivity Program adopted at the Astana summit is expected to significantly increase the transit potential of the Middle Corridor and make Caspian transits smoother.

The establishment of the Turkish Investment Fund was on the agenda at the Istanbul Summit. During the two-year period of the organization, sub-commissions carried out infrastructure work to establish the Turkish Investment Fund. On March 16, 2023, the Agreement on the Establishment of the Turkish Investment Fund was signed at the Extraordinary Summit of the OTS held in Ankara. Before the Astana summit, Turkey voted the proposal for the establishment of the Turkish Investment Fund as a law in its parliament: “The capital participation commitment of the Republic of Turkey to the Turkish Investment Fund and the payments to be made within the framework of this commitment cannot exceed the equivalent of USD 100,000,000.[7] The President is authorized to increase the amount up to five times.  Thus, the OTS has gained an institutional structure to finance its investments among itself. All of these developments are efforts to increase the economic trade volume of the organization and strengthen economic cooperation.

Russia, Iran, and China should be part of the OTS

The fate of Turkic states depends on the revival of the Silk Road and the Belt and Road Initiative. Historically, trade flowing from China to Europe via the Silk Road played an important role in enriching Turks and building powerful states. Today, China, the world’s second-largest economy, has regained its historical position. The revival of the historical Silk Road plays an important role in the revival of the Turkic world. There must be an air of unity in Eurasia in order for the OTS to succeed. In this respect, the accession of Iran, Russia, and China, which have Turkic-speaking peoples, to the OTS will add significant strength to the organization. There is already such an expectation in the OTS. Chairman of the Council of Elders of the OTS Binali Yıldırım stated that China and Russia are natural members of the OTS.[8]

The sanctions against Russia in the aftermath of Russia’s operation in Ukraine have highlighted the strategic importance of the Middle Corridor.[9] Moreover, although 96 percent of the trade from China to Europe is by sea, the US continues to blockade the South China Sea. Currently, the Middle Corridor is the safest port for trade flow. The most important goal of the OTS is to make the Middle Corridor more active. “We should also pay special attention to the development of transport networks between our countries. With this understanding, we continue our efforts to activate the Caspian Trans-Caspian East-West Middle Corridor. We should strengthen our cooperation in removing obstacles to transportation and trade, enriching transportation networks, facilitating border crossings, and visa procedures”.[10]

Conclusion

The world is on the brink of a global rupture, and OTS is an organization that emerged on the brink of this global rupture. Shortly after the Republic of Turkey celebrated its 100^th anniversary on October 29, the OTS organized a summit with the theme of ‘Turk Time’, which reflects the expectation of Turks to become a global actor for the 200^th year. To achieve this goal, the Organization of Turkic States must unite in Eurasia. In this respect, it is vital for the OTS to strengthen its cooperation with China, Iran, and Russia. These states are the leading powers of Asia and home to Turkic-speaking peoples. Economically, the Middle Corridor is vital for the OTS. Trade between China and Europe passes through Central Asia via railroads, which indicates the revival of the historic Silk Road. Controlling the Silk Road, the OTS can regain its historical role, gain a geopolitical advantage, and become an important figure in world politics. Turks have always had their own special goals, called the ‘Red Apple’. The Ottoman Sultan Mehmet the Conqueror set the conquest of Istanbul and the establishment of a new Roman Empire as the Red Apple. In the 16-18^th centuries, the Ottoman Sultans identified the conquest of Vienna and Rome as the Red Apple. In the 20^th century, Turkist ideologues had the Red Apple of establishing a Turan State. In the 21^st century, it is clear that the Turks’ Red Apple is the greatest ideal to be a center in the multipolar world order under the slogan of ‘Turk Time’.

The views contained in this article are the author’s alone and do not represent the views of Shanghai University.

[1] Francis Fukuyama, Francis Fukuyama on the end of American hegemony, 8 November 2021, https://www.economist.com/the-world-ahead/2021/11/08/francis-fukuyama-on-the-end-of-american-hegemony

[2] CFR, The Future of Dollar Hegemony, 22 August 2023, https://www.cfr.org/blog/future-dollar-hegemony

[3] Türkiye Yüzyılı’nda ‘Türk Devri’ başlıyor, 3 November 2023, https://www.trthaber.com/haber/gundem/turkiye-yuzyilinda-turk-devri-basliyor-809286.html

[4] Organization of Turkic States, “Declaration of the Tenth Summit of the Organization of the Turkic States”, 3 November 2023, https://www.turkicstates.org/assets/pdf/haberler/astana-declaration-3113-215.pdf

[5] AA, “Türk Haber Ajansları Birliğinin ilk genel kurulu yapıldı”, 6 November 2023, https://www.aa.com.tr/tr/kurumsal-haberler/turk-haber-ajanslari-birliginin-ilk-genel-kurulu-yapildi/3045736#

[6] Türkiye İletişim Başkanlığı, 21. Yüzyılın Parlayan Yıldızı: Türk Devletleri Teşkilatı, İstanbul, Cumhurbaşkanlığı İletişim Başkanlığı Yayınları: 2023

[7] Resmî Gazete, Türk Yatırım Fonu Kuruluş Anlaşmasının Onaylanmasının Uygun Bulunduğuna Dair Kanun, 11November 2023, https://www.resmigazete.gov.tr/eskiler/2023/11/20231111-1.htm

[8] Sputnik, Aksakallılar Konseyi Başkanı Yıldırım: Rusya ve Çin Türk Devletleri Teşkilatı’nın doğal üyesidir, https://tr.sputniknews.com/20211126/aksakallilar-konseyi-baskani-yildirim-rusya-ve-cin-turk-devletleri-teskilatinin-dogal-uyesidir-1051186836.html

[9] Zeynep Çetinkaya, & Zeynep Canlı, “Rusya-Ukrayna Savaşı Türkiye’den geçen ‘Orta Koridorun önemini daha da artırdı.” AA, 2022, 1 Mart 2022, https://www.aa.com.tr/tr/ekonomi/rusya-ukrayna-savasi-turkiyeden-gecen- orta-koridorun-onemini-daha-da-artirdi/2519232.

[10] Türkiye Cumhuriyeti Cumhurbaşkanlığı, “Türk dünyasının barışı, refahı ve güvenliği yönünde adımlar atmayı sürdüreceğiz”, 3 November 2023, https://www.tccb.gov.tr/haberler/410/150055/-turk-dunyasinin-barisi-refahi-ve-guvenligi-yonunde-adimlar-atmayi-surdurecegiz-

Most businesses believe that sales and customer service reside in separate departments.

Every small interaction sends a message. The way you answer a question, explain a detail, or handle uncertainty all influence how comfortable someone feels pulling out their card. Spending money is personal. People need to feel looked after before they commit.

They want straight answers. They want things explained properly. And they want to sense that the person helping them actually knows what they’re doing.

To boost sales, follow these five customer service strategies below:

1. Avoid Scripts

A lot of training initiatives teach people what to say, not how to think – and customers feel that immediately.

The moment someone sounds like they’re reciting lines, trust slips. Real confidence comes from understanding, not memorisation. When your team knows the product inside out, they stop performing and start having proper conversations.

They can adapt, explain things in their own words, and, most importantly, respond without that awkward pause where they search for the “right” answer.

• Empower Staff To Solve Problems

Empowering your team means your staff can actually help, without having to “check with someone” every five minutes – that just irritates your customers and your staff lose confidence.

Trust your team to make the right call and let them approve replacements and offer sensible credits so they can fix the small stuff immediately.

Demonstrate the kind of leadership that makes your team better.

When someone buys from you, browses certain products, or asks specific questions, they’re giving you clues about what they actually want.

Good CRM solutions simply help you pay attention.

They keep track of preferences, past orders, and birthdays – the small details that are easy to forget but powerful when remembered. The plan isn’t to inundate them with generic promotions or info they never wanted.

It’s to be there at the right place at the right time. For example, send out a reminder when they’re likely running low or make a suggestion that genuinely complements what they already bought.

Following up shouldn’t feel weird. It’s just care in action.

Most customers don’t need a big song and dance. They just want to know you’re still there after the payment goes through. A simple message, a few days later, is powerfully reassuring.

Not to push, and not to upsell, but rather just to make sure they’re in the loop.

• Reward Loyalty and Referrals

Rewarding loyalty shouldn’t feel like a corporate points program with fine print nobody reads.

It should feel like appreciation.

Let your regulars feel like insiders. Give them a first look at new ranges before anyone else sees them. Move their order up the queue when you can.

When someone chooses your business again and again, that’s trust. They’re choosing you. They’re betting on your quality, your service, and your word.

Final Thoughts

When service feels thoughtful and reliable, hesitation and doubt drop. Questions get answered on time. That sense of being looked after doesn’t just close one sale – it builds loyalty.

U.S. trade policy uncertainty has sent shockwaves through global markets, as President Donald Trump moved to impose a 15% tariff following the Supreme Court of the United States ruling invalidating his emergency trade levies. Investors reacted quickly, rotating out of risk assets and the dollar, while seeking shelter in gold, silver, and safe-haven currencies. The turbulence highlights the fragility of global investor confidence when policy reversals collide with high-stakes geopolitical and economic risks.

Wall Street and Currency Volatility

U.S. stock futures fell sharply, with S&P 500 futures down 0.5% and Nasdaq futures slipping 0.6%. The dollar weakened across major pairs, losing 0.21% versus the yen and 0.34% against the Swiss franc, while the euro gained 0.23%. European equities also reflected caution: the STOXX 600 fell 0.19%, Germany’s DAX slid 0.36%, and Britain’s FTSE 100 edged down 0.1%.

Asian markets, however, were mixed. The MSCI Asia index excluding Japan rose 0.83%, while Hong Kong’s Hang Seng surged 2.53% on expectations of lower tariffs for China. Japan’s Nikkei futures fell 0.4% ahead of a holiday, highlighting regional divergence driven by perceived winners and losers in U.S. tariff policy.

Safe-Haven Assets Rally

Amid the uncertainty, investors sought protection in gold and silver, which climbed 0.6% and 2% respectively. Safe-haven currencies, including the Japanese yen and Swiss franc, appreciated as risk-off sentiment grew. Government bonds saw slight gains, with the U.S. 10-year Treasury yield dipping to 4.077%, reflecting flight-to-quality buying. Brent crude prices fell 1.1% to $70.97 a barrel, reversing gains from earlier geopolitical risk sentiment linked to U.S.-Iran tensions.

Tariff Confusion and Its Economic Implications

Trump’s latest tariffs add layers of ambiguity. While the Supreme Court struck down his emergency powers, the new 15% levy relies on Section 122 of the 1974 Trade Act, an untested statute. Questions remain over timing, exclusions, and applicability by country. Some nations, including the UK and Australia, had lower tariffs under prior rules, while many Asian exporters faced higher duties. The Yale Budget Lab estimates the average effective tariff rate at 13.7% following the announcement, down from 16% pre-ruling, with the 15% rate potentially dropping to 9.1% after 150 days.

“This circular process of tariff announcements, legal challenges, and revisions is creating profound uncertainty for markets,” said Rodrigo Catril, senior FX strategist at NAB.

Market Sentiment and Investor Behavior

The episode reflects broader structural concerns about U.S. trade policy’s unpredictability. Investors are no longer just reacting to tariffs themselves, but to the instability and volatility of policy enforcement. The uncertainty affects supply chains, corporate earnings forecasts, and capital allocation decisions. Nvidia’s upcoming earnings, for example, are being closely watched, given the company’s 8% weighting in the S&P 500, demonstrating how trade policy shocks can amplify market sensitivity to specific corporate results.

Analytical Outlook

Trump’s oscillating trade policy highlights a critical tension between political objectives and market stability. While tariffs are framed as instruments to advance domestic economic priorities, the resulting unpredictability imposes systemic costs: currency swings, equity market volatility, and flight to safe assets. The mixed regional responses Asian equities partially rallying, European markets cautious underscore how interconnected global trade and finance are, and how unevenly shocks are absorbed.

In essence, this episode illustrates a modern economic paradox: protective trade measures intended to strengthen domestic interests can, in practice, destabilize markets worldwide. Investors now must hedge not only against tariffs themselves but also against the policy volatility that accompanies them a scenario likely to persist as long as U.S. trade decisions are made unilaterally and unpredictably.

Trump’s approach has transformed trade from a predictable framework into a high-stakes, reactive arena, forcing global markets to continuously recalibrate. The lesson is clear: in today’s interconnected financial system, the cost of policy uncertainty often outweighs the intended protectionist benefit.

With information from Reuters.

South Korea and Brazil have agreed to significantly deepen cooperation across key minerals, trade, technology and security, as President Lee Jae Myung hosted Brazilian President Luiz Inácio Lula da Silva in Seoul for the first Brazilian state visit in more than two decades. The summit, held at the Blue House, marked a symbolic reset in bilateral ties and produced an ambitious roadmap aimed at elevating relations to a strategic partnership.

The two leaders endorsed a four-year action plan designed to anchor cooperation in strategic minerals, advanced manufacturing, defence, space industries and food security. They also oversaw the signing of 10 memorandums of understanding covering trade and industrial policy, rare earths and other critical minerals, the digital economy including artificial intelligence, biotechnology and health, agricultural collaboration, small-business exchanges, and joint efforts to combat cybercrime and narcotics trafficking.

Critical Minerals at the Core

At the heart of the agreement lies a shared recognition of the growing geopolitical importance of critical minerals. Brazil holds significant reserves of rare earth elements and nickel, both essential to electric vehicles, renewable energy systems and high-tech manufacturing. South Korea, a manufacturing powerhouse heavily reliant on imported raw materials, is seeking to diversify supply chains amid intensifying global competition for resource security.

For Seoul, closer ties with Brasília offer an opportunity to secure stable access to strategic inputs while reducing exposure to concentrated supply routes. For Brazil, the partnership represents a chance to attract South Korean investment into mining, processing and downstream industries, potentially moving up the value chain rather than remaining primarily a raw-material exporter.

Trade Expansion and Industrial Policy Alignment

Brazil is South Korea’s largest trading partner in South America, and both governments signaled an intent to broaden the scope of commerce beyond traditional commodity flows. Industrial policy coordination featured prominently in the discussions, suggesting a shift toward co-development in sectors such as semiconductors, batteries and green technologies.

The emphasis on the digital economy and artificial intelligence reflects a convergence of economic strategies. South Korea’s advanced technological ecosystem complements Brazil’s expanding digital market, creating potential for joint ventures and technology transfers. Cooperation in biotech and health also indicates a recognition of demographic and public health challenges that transcend borders.

Security, Stability and Shared Democratic Narratives

Beyond economics, the leaders framed their partnership within a broader narrative of stability and democratic resilience. Lee emphasized support for peace on the Korean Peninsula, while Lula underscored Brazil’s interest in a balanced and rules-based international order.

Their personal rapport, shaped by shared experiences of early-life factory work and social mobility, added a human dimension to the diplomacy. Lee publicly praised Lula’s life story as emblematic of democratic progress, reinforcing a symbolic alignment that may help sustain political goodwill between the two administrations.

The inclusion of joint policing initiatives against cybercrime and transnational threats signals that the partnership extends into non-traditional security domains. As digital connectivity deepens, cyber resilience and coordinated law enforcement become integral to safeguarding economic integration.

Strategic Diversification in a Fragmented World

The timing of the summit is notable. As global trade faces renewed uncertainty and supply chains continue to recalibrate, middle powers such as South Korea and Brazil are seeking to hedge against volatility by strengthening bilateral and regional ties. By formalizing cooperation in minerals, technology and defence, both governments aim to insulate their economies from external shocks while positioning themselves within emerging industrial ecosystems.

The ceremonial elements of the visit including a state banquet blending Korean and Brazilian cultural traditions underscored the leaders’ intent to broaden engagement beyond transactional trade. Whether the newly signed agreements translate into measurable investment flows and industrial integration will depend on sustained political commitment and private-sector participation. Yet the framework established in Seoul suggests that both countries see strategic partnership not as a symbolic upgrade, but as a practical response to an increasingly fragmented global landscape.

With information from Reuters.

Authors: Ajay Kumar Mishra and Shraddha Rishi*

At the Davos World Economic Forum, Mark Carney, the prime minister of Canada, shared his thoughts on the hegemonic and subservient world order. When integration turns into a source of subordination, one cannot “live within the lie” of mutual benefit in the midst of a collapsing global order. The trading communities appear to have a hegemonic and subservient relationship as a result of the dollar’s adoption as the world’s reserve currency. Furthermore, the competing global order between the US and China appears to be caving in to Chinese modus operandi without investigating the reasons for US authoritarian dominance, which could result in the acceptance of Chinese domination. The recognition of the US dollar as the worldwide currency and its dominance over oil, one of the most traded commodities, have put the US in leadership of the world trading regime. Furthermore, it appears that China’s monopoly over rare earth elements (REEs) is giving the Chinese yuan the same reserve currency power. Therefore, the globe might witness a change of control from the US to China, thus jeopardizing the world trading system to the whims and fancies of the country holding the reserve currency.

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According to this essay, the dollar’s reserve currency status is the true cause of the world order’s disintegration, which equates to allowing the US to take the only seat at the table. It contends that a multipolar currency is essential for a multipolar world order. This understanding is necessary to prevent the rule of any country based on currency supremacy. Diversifying the currency basket for trade transactions is encouraged. To show how the currency dominance of a reserve currency would rise to currency imperialism, this article looks into the petrodollar problem and the duality of reserve currency and trade deficit to delegitimize the necessity of the dollar as a reserve currency. Any currency in question is subject to the same reasoning. Thus, a multi-currency trading framework is advocated in this article.

Geoeconomics of the Petrodollar Crisis’s Spiral

The dollar controls trade, payments, and reserves. About 96 percent of trade in the Americas, 74 percent in the Asia-Pacific area, and 79 percent in the rest of the world is denominated in the currency. About 60 percent of international and foreign currency claims (mainly loans) and liabilities (mostly deposits) are in US dollars. Its proportion of foreign exchange transactions is roughly 90 percent. Approximately 60% of the world’s official foreign reserves are in US dollars. Furthermore, in Q1 2025, the US dollar’s percentage of global foreign exchange reserves dropped to 53.6%. Additionally, the 50-year security agreement with Saudi Arabia to price oil only in dollars and invest surpluses in U.S. Treasury bonds in exchange for military protection expired in 2024. This could result in a shift toward accepting different currencies, albeit it won’t happen right away. Additionally, countries like Russia, China, and Iran are increasingly using non-dollar currencies for energy trade, aiming to reduce reliance on Western financial networks.

To achieve its geoeconomic goals, US authorities have attempted to preserve the dollar’s reserve currency status in several ways, compensating for economic weaknesses such as a lack of competitiveness in particular. The US appears to be addressing the growing trade deficit by maintaining the dollar as the world’s currency and matching China’s hegemony over rare earth elements. The US’s current dominance over the trade regime is largely due to dollar-based trade. The oil trade in dollars gives the US significant influence to shape geopolitics globally, both bilaterally and multilaterally, as oil holds a premier position in the international trading landscape.One commodity (oil) and one currency (the US dollar) have the power to both destabilise and stabilise the global price system. Its “as good as gold” quality can only be maintained in a world where the dominant currency is no longer associated with gold if it is associated with oil, that is, if wealthy people have faith that oil prices won’t continue to rise relative to the US dollar. The US gains influence over the oil trade by controlling the petro-dollar trade.

The globe is essentially on an “oil-dollar standard” during the post-Bretton Woods system, when currencies are meant to be “floating.” The US is under pressure to control oil sources, which it does through coercion or persuasion, to maintain wealth-holders’ faith in the value of the dollar, without which the global economy will experience severe financial turmoil, particularly given the ongoing US current account deficit. In a nutshell, war is a result of today’s necessity to preserve US financial stability. It does, however, produce a spiral effect. To control a significant oil source for financial stability, the US attacked oil-rich Iraq and, more recently, Venezuela. However, as a result of the opposition this strike provoked, oil prices skyrocketed, increasing the threat to financial stability and the temptation to wage war on other oil-rich nations like Iran. Additionally, the US would experience the same spiral consequences in a much more severe form if it decided to go to war with Iran.

The Reserve Currency and Trade Deficit “Trade-off”

Trade deficit and reserve currency operate in a trade-off scenario wherein a nation whose currency serves as the world’s reserve currency must maintain a trade deficit. It is based on two fundamental ideas. The first is the ‘policy trilemma’ or ‘impossible trinity’ thesis of economists Robert Mundell and Marcus Fleming. It contends that an economy cannot sustain unrestricted capital flow, a fixed exchange rate, and an autonomous monetary policy at the same time. The second paradox bears the name of Robert Triffin, an economist. This states that where their money works as the global reserve currency, a nation must run huge trade deficits to meet the demand for reserves. Any candidate for a new global reserve currency position must run significant current account deficits and risk an intolerable loss of economic control.

However, trade imbalances are thought to be self-correcting. A nation’s currency is predicted to lose value when it has a trade imbalance. Exports will then rise, while imports will fall, resulting in a reduction in the trade deficit. However, as the dollar is the world’s reserve currency, this idea does not apply to the US economy. A large portion of a country’s foreign exchange reserves is invested in US government securities. As a result, the dollar is overpriced. A chronic trade deficit results from higher imports and lower exports due to an overpriced dollar. Therefore, the US has a trade deficit not because it imports more goods, but rather because it supplies the world’s reserve currency.

In the face of “unfair” trade and an overpriced currency, how can the US bring manufacturing back and lower the country’s trade deficit? Enter duties on imports. Tariffs will decrease imports and increase their cost, lowering the trade imbalance. By shielding American manufacturers from import competition, they will promote domestic production. However, the US’s return to a more protectionist policy through tariffs has led to increased bilateral commerce in non-dollar currency. For instance, India-Russia oil trade and China’s increasing use of bilateral currency swaps with its trading partners have caused major concern for the US reserve currency supremacy. Moreover, it caused a spiral effect. For example, the reserve currency of the central banks has become less dollarized as a result of the recent US policy of reciprocal tariffs to safeguard trade transactions in dollars. It promotes asking about options for a reserve currency basket and the possibility of de-dollarization. Trump has made no secret about retaining the US dollar’s global supremacy, even threatening the BRICS nations with 100% additional tax should they move forward with a unified currency to “degenerate” and “destroy” the dollar. After all, de-dollarization has the potential to tip the scales against the United States and reduce its capacity to influence international financial markets and the global economy. Furthermore, to protect dollar dominance from the assault of renewable energy, the US withdrawal from India’s solar alliance must be considered.

Economists fear that tariffs go against the concept of economic efficiency. Tariffs, they warn, will imply greater expenses for American consumers, an increase in the inflation rate, and an inefficient manufacturing sector. Moreover, tariffs will encourage nations to undermine the dollar’s standing as a reserve currency by making imports more expensive. It will portend the trading of multiple currencies. Even when Trump managed the inevitability of a trade deficit because of having a reserve currency, the US was still faced with two additional problems: the increasing bilateral trade in member countries’ currencies and China’s control over modern-era gold, ‘rare earth minerals’ critical for key industries. China’s hegemony over REEs and chip production challenges the US dollar’s hegemony.

Conclusion

It reflects that the actual geo-economic strength of the US lies in the acceptability of its currency as a global reserve and its hold over one of the most traded commodities, oil. The rise of China and the evolving structure of international trade are changing the dynamics of this area, even though the US dollar continues to be the most important reserve currency. However, there wouldn’t be any surpluses to invest or deficits to finance if trade were more bilaterally balanced over time, which would lessen the demand for a reserve currency like dollars. The world looks to be headed towards a multi-currency structure for harmonious commercial ties. By encouraging alternate payment methods among trading nations and choosing the currency used for the IMF’s reserve holdings, for instance, it is necessary to end the US monopoly on currency arrangements. The structure can be extended to incorporate trading blocs, where imbalances net out amongst members when aggregated. It suggests a world with several reserve and trade currencies.

This bilateral or multilateral currency autarky might unleash the potential to trade freely as well as to obtain investment capital for emerging economies. Moreover, this strategy is embedded in the evolving industrial structure driven by economic sovereignty. Meanwhile, the US’s capacity to finance its ongoing budget and trade deficits would be impacted by the dollar’s declining value. Dollar interest rates may have to climb, and the currency may depreciate. The role of its capital markets and financial institutions would shrink. It would give more space for the formation of a multipolar currency regime.

*Shraddha Rishi teaches Political Science at Magadh University, Bodhgaya. She has obtained her PhD from the Centre for South Asian Studies, JNU, New Delhi.

Almost fifty years after the revolution in 1979 that changed the political landscape of Iran, Iran is at the crossroads of its history, which is defined by economic pressures, social pressure, and the changing geopolitical environment. The Islamic Republic was constructed as a combination of revolutionary ideology, anti-Western response, and promise of social justice. In the present day, although the ideological framework is still maintained, the sustainability of that framework is being strained increasingly by the structural economic pressures of the day, generational shifts, and changing regional hegemony.

On the economic front, Iran is continually constrained by global sanctions and inefficiency in its structure. Withdrawal by the United States from the Joint Comprehensive Plan of Action (JCPOA) and the reimposition of massive sanctions in 2018 have cut off much of the oil exports of Iranian oil, banking, and foreign investment flows. The country works well under its economic potential despite the fact that Tehran has been able to sustain limited oil sales, especially through discounted sales to China and through surrogate routes. The inflation rate has been above 40 percent during the recent years, the Iranian rial is falling drastically, and unemployment among the youth is also a burning issue. It is the middle and lower classes that are directly impacted by these economic pressures and that pose a legitimacy challenge that cannot be solved only through rhetorical means of revolution.

The internal landscape is a manifestation of long-term frustration. Frequent demonstrations regarding fuel prices, the state of the economy, and social liberation indicate the growing disparity between state discourses of resistance and the realities that the citizens encounter. The newer generation born after the revolution has lost any connection with the revolutionary memory of 1979 and perceives governance less as ideologically symbolic and more based on economic performance and individual opportunity. The policy employed by the state has been based on the repressed handling of dissent, which consists of the limitation of the mobilization of protests and the prevention of the collapse of the system. Although this is a way of maintaining short-term stability, it does not deal with structural issues like brain drain, capital flight, falling purchasing power, and diminished faith in long-term economic potential.

The main political quandary is consequently a legitimacy transformation quandary. In the past, the Islamic Republic gained legitimacy through revolutionary mobilization, religious control, and confrontation with the external hostilities, especially the United States and Israel. Nevertheless, the contemporary politics demands more and more performance-based legitimacy—providing economic growth, stability, and material changes in the quality of life. The conflict between ideological stability and realistic adjustment is the characteristic of the contemporary crossroads of Iran.

Iran is geopolitically a country that exists in the complex web of pressures. The United States is still the main external agent, which affects the Tehran strategic calculations. The policy of Washington is alternating between the engagement of diplomacy and coercion, yet the ultimate goal is the same as it is: avoiding the possibility of Iran obtaining nuclear weapons competence and reducing its impact in the region. In Tehran, it will need negotiations that will help soften sanctions and stabilize the economy, but any deal will not collapse under the perception of submission over matters of sovereignty, ballistic missile potential, and relations with the region.

Meanwhile, the nuclear and missile programs in Iran are considered to be existential threats to Israel. The shadow struggle that has been there for a long time, including cyber attacks, precision attacks, espionage, and proxy wars, has heightened strategic mistrust. The intensity of this rivalry is shown by the fact that Israel has been carrying out its operations within Iran and against Iran-related targets in Syria. Any intensification would attract Gulf states and disrupt world energy supply, especially through the Strait of Hormuz, which is a choke point in the oil markets of the world. Even minor confrontations will have a global economic impact, as Iran is strategically placed in the important maritime paths.

The regional policy of Iran has focused on the establishment of strategic depth by alliance and coalition with non-state actors and supportive governments within Lebanon, Iraq, Syria, and Yemen. This system becomes a deterrence and leverage factor, making it difficult to engage in a direct military strike on the territory of Iran. Geostrategically, this doctrine of forward defense has enhanced the bargaining power of Iran. But it is likewise causing tension with the other Arab countries and creating the impression of destabilization in the region. The recent diplomatic thaw between Iran and Saudi Arabia, which was facilitated by China, shows that both sides noticed that continued confrontation is expensive in terms of both economics and strategy.

Iran is geographically at one of the most strategic points of Eurasia. It connects the Persian Gulf with Central Asia, the Caucasus, and South Asia. The International North-South Transport Corridor is one of the major trade routes that can make Iran a major transit route between India and Russia and Europe. This geo-economic location, in theory, has colossal prospects of being rolled into new multipolar trade systems. Sanctions and political isolation in reality prevent full access to the global markets. The latter can be said to be strategic convergence, as Iran was brought closer to Russia, especially after the war in Ukraine, as a result of Western pressure. But such convergence also subjects Tehran to secondary sanctions and makes it less flexible in its East-West balancing.

Iran—Concerns about the nuclear problem continue to be the major pivot of the external affairs. Tehran maintains that its nuclear program is nonviolent and has indicated that it is free for verification. But the Western governments require more guarantees and wider negotiations, which can feature missile capabilities and regional operations. It is possible that a strictly limited nuclear deal will minimize the risks of immediate proliferation and alleviate the economic pressure, which might make the Iranian internal situation more stable. Nonetheless, such a deal may not help solve any underlying rivalries between the region but could simply freeze the situation unless there are larger regional de-escalation mechanisms. On the other hand, the inability to find any solution will lead to the further worsening of the economy and the possible military clash.

In a more geo-strategically global understanding, the balance of power between the Middle East and the rest of the world will be influenced by the course of Iran. In case Tehran manages to negotiate the lifting of sanctions and turns in the direction of economic integration with the Gulf states, it will be able to shift from the resistance-focused model to the development-oriented state step by step. This would strengthen the stability of the region, safeguard the energy security, and minimize the motivation to intervene. It would also make the regional rivalry be based more on economic rivalry rather than military rivalry, especially in terms of infrastructure rivalry, trade corridor rivalry, and energy market rivalry.

Nevertheless, should the negotiations fail and the confrontation escalate, Iran might apply the asymmetric deterrence further, increasing the range of its missiles and extending proxy bases. That way would strengthen the preemptive stance of Israel and increase the presence of the US military in the Gulf. The escalation would disorient shipping routes, exert more volatility on oil prices, and disintegrate the security infrastructure in the region. To the surrounding Arab nations, which require diversifying and changing their economies, new warfare would destroy investment conditions and long-term strategies.

On the domestic front, economic resilience is what will sustain the strategic position of Iran. The political principle of endurance can only be stretched so far as inflation undermines the wages and the depreciation of currency undermines savings. This needs structural changes: enhancing transparency, welcoming foreign investment, and a non-hydrocarbon economy, and empowering the business sector. Foreign policy victories cannot entirely offset its dissatisfaction at home without economic change.

After all, the crossroads of Iran is not only ideological but also structural. The state has to strike a compromise between sovereignty and economic need, deterrence and diplomacy, and ideological identity and practical governance. Its strategic location means that its decisions will have a far-reaching impact, not only across its frontiers, but also on the energy markets of the world, the great-power politics, and the new security order of the Middle East. The future of Iran becoming a development-oriented regional power with full membership in multipolar networks or being a sanction-bound resistance state under continuous pressure will not only dictate the internal stability of the country but also the geopolitical orientation of a long-time conflict-ridden and strategically divided region.