economics

In 2024, Argentina’s far-right President Javier Milei launched an economic overhaul that slashed public spending, gutted state institutions and triggered massive protests.

The government dubbed it “chainsaw economics”. Critics say it’s deepening poverty and pushing the country into chaos, while Milei continues to make headlines for bizarre behaviour, including claims he takes political advice from his dead dog’s clones.

So who is really running Argentina – and at what cost?

Mehdi Hasan goes head-to-head with Diana Mondino, who served as Milei’s foreign minister before being abruptly fired. She defends the president’s policies, brushes off Milei’s personal attacks, and distances herself from his more extreme views, including his support for organ sales and his insults towards the late Pope Francis.

Joining the discussion are:
Matias Vernengo – Economics professor at Bucknell University and former official at Argentina’s Central Bank
Maxwell Marlow – Director of public affairs at the Adam Smith Institute
Martina Rodriguez – Member of the Argentina Solidarity Campaign and the Feminist Assembly of Latin Americans

The Valdai Discussion Club, in partnership with the South African Institute of International Affairs (SAIIA), will hold the 3rd Russian-African conference titled “Realpolitik in a Divided World: Rethinking Russia-South Africa Ties in a Global and African Context” in late July 2025. The primary goal of the conference is to form and expand communities of African and Russian experts interested in cooperation, the confidential discussion of the most pressing international issues, and the preparation of recommendations for practical foreign policy work.

It is no coincidence that South Africa has been chosen as the venue for the Valdai’s conference. In 2025, South Africa chairs the G20 summit. In preparation for the upcoming late July conference, Steven Gruzd, Head of the African Governance and Diplomacy Programme and the Africa-Russia Project at the South African Institute of International Affairs (SAIIA), offers an insight into the current Russia-South Africa relations, the United States trade issues with Africa, and Africa’s future prospects in this rapidly changing world. Here are the interview excerpts:

The South African Institute of International Affairs (SAIIA) will host the 3rd Russian-African conference of the Valdai Discussion Club in South Africa. Within the context of the shifting geopolitics, what would you say, in terms of current Russia-South Africa relations, its status and prospects, as one of the themes for discussion?

Steven Gruzd: SAIIA looks forward to co-hosting the Third Russian-African Conference of the Valdai Discussion Club later in July 2025. We believe that it is important to interact and engage with a variety of actors in a balanced and nuanced way. We do not believe that academic boycotts are constructive.

The event is being held against the backdrop of rapidly shifting global geopolitics and the erosion of the “rules-based international order,” as nationalism is reasserted and conflicts endure in the Great Lakes in East-Central Africa and in the Middle East.

South Africa has maintained good relations with Russia throughout the last decade, although trade remains at a relatively low level and there is much scope to improve it. Diplomatically, relations are warm and constructive, and have been enhanced by regular interaction between the two countries in both BRICS and the G20. South Africa has tried to play a mediating role in Russia’s war with Ukraine, but here it has been one voice among many and does not have much concrete to show for these efforts, as the war rages on. Nevertheless, it remains a key driver of the African Peace Initiative. At the UN, most of South Africa’s votes on the Russia-Ukraine war have been abstentions, in line with its declared non-aligned stance.

To what degree are the few points raised above influencing or reshaping Russian-African relations? Do you also think Russia is rivaling and competing with its own BRICS members, for instance, China and India, across the continent?

SG: Russia-Africa relations have been steadily growing, as the two well-attended Russia-Africa Summits in 2019 and 2023 attest to. As Russia has faced sanctions and been shunned by the West, it has sought new markets and to strengthen ties with the Global South, including in Africa. Russia supported the membership of Egypt and Ethiopia to become full BRICS members at the 2023 BRICS Summit in Johannesburg. The 2024 BRICS Summit in Kazan, Russia, was successful and added Algeria, Nigeria, and Uganda as “partner countries.” This was an important occasion for Russia to show that it was not internationally isolated and could still rely on many countries as friends.

The operations of the Wagner Group, especially in the Sahel, have been gradually subsumed under the Africa Corps of the Russian Ministry of Defence.

Russia has been strengthening bilateral relations with many African countries and is looking to provide peaceful-use nuclear technology to about 20 African countries. It is heavily involved in the building of a nuclear energy plant in Dabaa, Egypt.

Russia’s BRICS partners—China and India, but also the UAE and Saudi Arabia—are active on the African continent, but at this stage it seems that all are able to achieve their strategic objectives in Africa without coming into conflict with one another.

Do you view South Africa’s G20 presidency as a unique factor for fighting neo-colonialism and Western hegemony and for addressing thorny trade issues with the United States?

SG: South Africa’s G20 presidency is important. It remains the only African member state of the G20, although the African Union has joined as a full member since 2023. This is the first time that the G20 is hosted in Africa. As the president, South Africa has the ability to influence the G20’s agenda. It is the fourth developing country in a row to host the G20—after Indonesia (2022), India (2023), and Brazil (2024). It has continued several of the initiatives of these Global South states in its focus. South Africa’s priorities include strengthening disaster resilience and response, ensuring debt sustainability for low-income countries, mobilizing finance for a just energy transition, and harnessing critical minerals for inclusive growth and sustainable development. The aim is for a more equitable, sustainable, and resilient global economy.

So far, the US has not sent its top leaders to preparatory meetings in South Africa, and there is doubt whether US President Donald Trump will attend the G20 Summit in November. This threatened to damage South Africa’s leadership, but the other G20 members have rallied to support South Africa.

I do not think that the G20 is the venue to “fight neo-colonialism, Western hegemony, and trade issues with the United States,” or at least not in using that language. I think BRICS may be a more appropriate platform to air these issues. South Africa will nevertheless push the concerns of the Global South this year.

Can South Africa’s presidency change perceptions of the G20’s role in global politics and its invaluable contributions to Africa’s development?

SG: I believe South Africa is doing well in its G20 stewardship so far and will hopefully host a successful summit, which has become especially challenging in the current geopolitical environment. If Trump does not attend, it will be damaging to the G20, particularly because the US is the host for 2026. South Africa’s relations with the US have deteriorated, including over Trump’s views on the treatment of white farmers, the expulsion of Ambassador Ebrahim Rasool from Washington, and threatened high tariffs, among many other issues.

The summit will hopefully showcase South Africa and change perceptions about failed or failing African states. South Africa remains a key player in Africa, contributing to the continent’s development through peace efforts, trade, and political interactions.

But I also think South Africa should be and has been modest in its expectations of what the G20 can do during any one-year presidency. The G20 remains one of the few forums where Russia and the West still sit around the same table, and it has been challenging to reach consensus.

South-South cooperation is frequently resonating, as is the United States skipping the G20, Trump, and the new world architecture featuring in bilateral and multilateral discussions. Can African leaders change attitudes and face geopolitical development realities? Can Africa remain non-aligned? What then can we expect as future prospects, especially for Africa?

SG: There is no doubt that South-South cooperation is happening and being talked about more and more, and it is set to continue. The global environment is subject to profound geopolitical tensions, not least due to Trump’s “America First” policies, including high trade tariffs. The entire world of development assistance or foreign aid is likewise undergoing far-reaching changes. Trump has destroyed the United States Agency for International Development (USAID), putting at risk or shutting down countless development projects in Africa. European countries—for a long time generous donors to Africa—are diverting billions of euros in development funding to defense and dealing with migration-related issues.

African countries will be under continual pressure to “pick a side” in what some have called the “New Cold War,” and for the most part they will continue to assert their non-aligned stances. How long they can continue on this path is unclear. And many say they are non-aligned but continue to lean closer to either the West or China and Russia in reality. African leaders are having to adjust to a rapidly changing and uncertain world, the contours of which are not entirely clear at this point. African leaders have been forced to deal with a world with less aid. Hopefully this will encourage African states to be more self-reliant, curb corruption, and pursue their national interests.

States no longer employ war as a tool to achieve their goals. Preferring to utilize more peaceful methods, states employ it to pursue highly consequential objectives. BRICS serves as a manifestation of this notion. The emergence of BRICS increasingly challenges the Global North. The establishment of this cooperation reflects the efforts of the Global South to alter the global order and break free from the long-standing dominance of the Global North.

BRICS represents more than a symbol of cooperation. It is actively engaged in a geopolitical chessboard that shapes today’s global economy. Gradually yet steadily, it is shifting the global balance of power through the strength it has accumulated. This is evident in the growing interest among developing countries to join the group.

Led by two major powers perceived as threats to the Global North, China and Russia hold substantial leadership roles. China dominates the global economic landscape and poses a challenge not only to the United States but also to Europe. The European Union consistently asserts that China is a rival in the renewable energy sector, particularly in electric vehicles. Russia, on the other hand, holds significant energy leverage over Europe and poses a geopolitical challenge to NATO, which is led by the United States. The development of this cooperation is further reinforced by the accession of strategically significant global actors such as Iran and the United Arab Emirates, with their vast oil reserves; Ethiopia, with its port access; and Egypt, with its strategic geographic position in relation to the West.
The inclusion of these countries further destabilizes the seemingly absolute dominance of the Global North.

Power has long been synonymous with the realist approach, which is grounded in strength.
However, the definition of strength and power has evolved. Power is no longer solely defined in terms of military capability or weaponry. In today’s global context, power is also measured by a state’s influence in shaping the rules of the game. Cooperation serves as the foundation of this new form of power.

BRICS leverages this expanded notion of power and influence. It builds coalitions to undermine dominance not by overt force, but by subtly shifting the balance—leaving its opponents unaware that a transformation is underway. BRICS undoubtedly presents a substantial challenge to the Global North’s dominance. In response, Western countries have adopted equally measured diplomatic strategies aimed at undermining BRICS from within.

During a G7 summit, former U.S. President Donald Trump expressed regret over Russia’s removal from the G7 following its annexation of Crimea in 2014.

“I would say that was a mistake, because I think you wouldn’t have a war right now if Russia were still in, and you wouldn’t have a war right now if Trump had been president four years ago.”

Trump also did not object to the possibility of China joining the G7, stating:

“Well, it’s not a bad idea. I don’t mind that. If someone wants to suggest China joining, I think we should suggest it, but you want people you can talk to,” he added.

At first glance, these remarks appear to suggest a constructive approach to U.S.–China relations. However, upon closer examination, they may be interpreted as part of a broader strategic effort to weaken U.S. involvement in China’s global agenda.

This statement illustrates the extent to which the Global North powers are monitoring and responding to the actions of two principal BRICS members—China and Russia—as part of their efforts to undermine alliances among the Global South countries. Beyond these two core members, the G7 extended invitations to three strategically important BRICS countries—India, South Africa, and Brazil—to attend the forum as guest participants. This move represents a calculated geopolitical effort by the Global North to engage selectively with the Global South actors on the international stage.

In early July 2025, BRICS convened a summit in Rio de Janeiro, Brazil, from 6–7 July. The summit was attended by all member states, including Indonesia as the newest addition to the group. Amid widespread global instability, the summit focused on pressing international issues, particularly those concerning the global economy and sanctions imposed by the United States. The meeting also addressed and condemned the Israel–U.S. military action against Iran, characterizing it as a violation of international law. These discussions served to foster a shared perspective and unity among BRICS members, with the expressed objective of challenging and dismantling systemic dominance.

The global chessboard, once governed exclusively by the most powerful Global North actors, is now being gradually redefined by emerging powers. These new actors, having grown weary of external direction, are seeking to establish their own platforms for influence and victory.

In conclusion, cooperation may serve as a strategic instrument for gaining power—one that cannot be easily condemned by any state. It represents the power to shape a new world order. Moreover, cooperation can also function as a tool for existing powers to engage with emerging actors and potentially undermine them from within the very system those new actors have established. Thus, cooperation in this context is not merely a symbol of unity but a form of conflict—one that is waged without conventional weaponry or the noise of warfare, yet still aimed at securing or contesting global dominance. Whether that dominance is preserved or overtaken remains the central struggle.

This summer, the global economic stage is hosting two wildly contrasting blockbusters in trade policy, each promising a different future for international commerce. On one side, we have China, rolling out the red carpet for a grand gala of zero-tariff delights for a vast swathe of African nations. On the other, we see the specter of a protectionist act, with U.S. President Donald Trump announcing plans to send out 150-plus letters to countries worldwide, each containing a polite (or not-so-polite) invitation to pay a new 10% or 15% cover charge. It’s a tale of two philosophies: one building bridges with open arms, the other, perhaps installing a very large, very expensive global toll booth.

Let’s first RSVP to China’s “Open Arms” party. Beijing’s commitment to high-level opening-up is currently in full swing, underscored by its long-standing and now significantly expanded zero-tariff policy for African nations. This isn’t just a fleeting summer fling; it’s a deepening relationship. Starting December 1, 2024, China granted 100% zero-tariff treatment to products from 33 African Least Developed Countries (LDCs) that have diplomatic ties with Beijing, making it the first major developing economy to do so. In a bold move this June 2025, China announced its intention to extend this 100% zero-tariff treatment to 98% of taxable goods from all 53 African nations with diplomatic ties, a policy set to fully mature through new economic partnership agreements. Imagine: a vast market of 1.4 billion consumers, suddenly accessible without the usual customs hurdles for everything from Rwandan dried chilies to Malagasy lamb.

This isn’t merely about trade figures; it’s a strategic embrace. China frames this as fostering “shared prosperity” and helping African nations build their “blood-making” capabilities – a rather vivid metaphor for self-sustaining economic growth. It’s about supporting industrialization, enhancing local value chains, and providing a crucial diversified export market for African goods, especially as traditional markets face headwinds. In essence, China is inviting Africa to a grand buffet, where the food is free, and the kitchen is open for new recipes. The message is clear: “Come on in, bring your best, and let’s grow together.” While some analysts raise eyebrows, suggesting it benefits China more or could impact local industries, the sheer scale and intent of this open-door policy represent a significant commitment to multilateralism and South-South cooperation.

Now, let’s turn to the other side of the global stage, where the curtain might soon rise on a very different kind of show: the “Global Toll Booth” policy. Reports indicate that Trump, known for his unique approach to trade, is currently sending out letters to over 150 countries, informing them that they’ll soon be subject to a blanket 10% or 15% “reciprocal tariff.” Think of it as a universal cover charge for entering the American market, with a potential surcharge for those deemed to have “taken advantage” in the past.

This approach, rooted in an “America First” philosophy, aims to slash trade deficits, encourage “reshoring” (bringing production back home) and “de-risking” (reducing reliance on specific, often adversarial, supply chain nodes). It’s less about a shared feast and more about ensuring America gets the biggest slice of the pie, even if it means baking a smaller pie for everyone. The humor here lies in the sheer audacity and scale: imagine the postal service grappling with 150-plus individually tailored tariff notices, each potentially sparking a new round of trade negotiations or, more likely, retaliatory tariffs. The central economic joke, of course, is the argument that “they pay for it,” while most economists agree that tariffs are largely paid by domestic consumers and businesses through higher prices, potentially increasing the overall U.S. price level by over 2% and leading to a significant loss in real GDP.

The contrast between these two approaches couldn’t be starker. China’s strategy is akin to a seasoned architect, meticulously designing new, interconnected trade routes and inviting everyone to build along them, especially those who need a leg up. It’s about fostering a complex, interwoven tapestry of global supply chains where every thread, no matter how small, contributes to the strength of the whole. The goal is deep integration, shared growth, and a vision of resilience through interdependence.

Conversely, the U.S. strategy resembles a determined gardener, carefully pruning away what it perceives as unhealthy or risky branches from the global supply chain tree. While the stated aim is resilience, the method risks fragmentation, higher costs, and a more unpredictable global trade environment. One approach seeks to expand the pie for all; the other aims to secure a larger, more controlled slice of a potentially shrinking pie.

For global businesses and consumers, these divergent paths present a fascinating, if somewhat bewildering, future. China’s zero-tariff policy offers tangible incentives for market access and development, potentially creating new growth poles in Africa and beyond. It signals stability and a long-term commitment to global engagement. Trump’s tariffs, however, introduce a significant element of volatility. Businesses would face increased costs, disrupted supply chains, and the constant uncertainty of shifting trade policies, forcing them to re-evaluate sourcing, production, and market strategies on a global scale. The humor might be lost when the price of your morning coffee or favorite gadget suddenly jumps due to an unexpected “reciprocal tariff.”

In the grand theater of global economics, China is betting on an ensemble performance where everyone gets a chance to shine, especially the emerging stars. The U.S., under Trump presidency, seems poised for a solo act, where the star demands a hefty entrance fee from the audience, regardless of their role in the show. As this summer unfolds, the world will be watching to see which blockbuster strategy ultimately fosters genuine prosperity and stability, and which one merely leaves everyone paying more for the ticket.

If we are going to make an overview of what is going on now through the lens of the so-called dangerous opportunity, we can list some challenges and opportunities that Iran and China both face through this tension. I will try to name challenges and opportunities.

Challenges

The first challenge is that the United States of America is in a big competition and rivalry against China, which is the main actor trying to compete against the Western order. The US tries to create a “burned land” within the Middle East by using the major strategy of balkanization. In this strategy, the United States attempts to create a weak, failed, chaotic space for China throughout the region to actually block any attempts to initiate the Belt and Road Initiative and land corridors from China to the western part of the world. You can see a clear idea of balkanization throughout the region, and of course, we can see this example in Syria. The main role that Israel and the United States try to duplicate in different parts of the region may be seen in Yemen, Iraq, and even Afghanistan. The challenge is that we will have a burnt land in the Middle East that actually makes it impossible to follow initiatives like the Belt and Road.

The second challenge could be an energy crisis in the Middle East. We know that China tries its best to mediate between Saudi Arabia and Iran to secure regional security and stability, and of course, energy stability within the Middle East and at the global scale. This crisis and tension, which Israel initiated through unprovoked actions, could lead to a worldwide energy crisis because Iran and Tehran have mentioned multiple times that there are different options available for Iran to affect the whole region if there is more tension or further attacks from any foreign actors, especially the United States or Israel.

The third challenge we can name is the corridor blockade or dead-end. We can name different initiatives and corridors made and created by the United States, such as I2U2, Quad, AUKUS, and of course IMEC, as initiatives to create a kind of blockade for China through maritime corridors. If the United States and Israel follow through with their goals in the current tension, there would be a kind of corridor blockade from the East to the West.

Another challenge we can name is about the Abraham Accords. China and Beijing should understand that this kind of alliance is not really just about Palestine or normalization with the Zionist regime; it is a big alliance and outsourcing of the regional order from Washington to Tel Aviv. In this regional order, which is totally supported and facilitated by Washington, the Middle East—or better said, Southwest Asia—would be a total ally of the United States. This could strongly affect the national interests of Beijing.

Last but not least, a challenge after the current tension between Iran and Israel is the possibility of initiating the next big conflict. Currently, we have two big open wounds from previous years: the Ukraine crisis and Palestine. The result and balance of power around these two hot zones will create a balance of power around a third hot zone, which is Taiwan. Therefore, the outcomes of Ukraine and Palestine will directly affect the Taiwan situation in the upcoming months and years.

Opportunities

The Chinese letter for crisis shows us that there is an opportunity in this kind of crisis. If we can name them:

The first opportunity is that supporting policy, especially for the nations of the region and the Global South, is simply being on the right side of history. Every actor who supports Palestine gains favorability within nations, especially in the Global South. As you can see, Iran has gained much soft power within the current tension with Israel in the region. This is a real comeback from the Arab Spring for Iran’s image in the eyes of the Middle Eastern people. Actually, China may understand that in the region there is a deep real desire to resist Israel. Every actor who stands against the operations of Israel will gain and has gained much favorability in the region and even the world. This is the big, big side of the resistance idea.

The second opportunity during this kind of conflict is that Iran can show and test its military capability against the Western alliances. It is not a clear and accurate vision if you consider the current situation and tension as a simple war between Tehran and Tel Aviv. Tehran, in the current 12-day war, stands and fights against Washington, the whole NATO, and some regional actors. Iran has not only avoided defeat in this situation but also tried to push the whole Israel and Western alliances to a ceasefire point.

The third opportunity is the chance and moment for almost all old actors in the region to shift their ideas towards a strong region without the US. It seems that even countries like Saudi Arabia and other regional states are thinking about a region without the presence of the United States. The good news is that if Iran and its allies can play a good role during the conflict and upcoming tension, there could be a regional order emerging from the regional actors, and there would be no vacuum of power.

The next opportunity I want to mention, after the experience of this war, is really important for Beijing nowadays and the current situation of the international order. China could not find any other strategy or reliable partner within the region with the capability of military, social soft power, enormous energy resources, and favorable geography other than Iran.

Conclusion

It seems that the fundamental strategy of the United States during the Trump administration for the Middle East, called “peace through strength,” is just a choice between two options: surrender or war. Surrender would mean a regional order controlled by Tel Aviv. Iran, as it seems, is trying to prepare itself for full-scale war. As mentioned in the early stage of this note, during the tension, this is a period of rebalancing of actors’ powers. Therefore, the ability and will of order-writers like China to play a role in this conflict will determine the upcoming role of this actor in the new world order.

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Indonesia is apparently seeking a secure position in an unstable world situation. It fosters cooperation through partnerships for this purpose. In this situation, Indonesia’s President Prabowo Subianto has recently engaged in dialogue and cooperation with world powers. Last weekend, on 6-7 July 2025, Prabowo went to the summit in the BRICS meeting. They discussed economic orientation and a few of the members’ common interests. They called an emerging power against the old power that had ruled the world for decades. Indonesia seems to join the cooperation to get a huge benefit since it is the largest economy in the world, namely China, Russia, and India. As the 10th member of BRICS, Indonesia clearly focuses on economic development through cooperation among countries.

This is not just stopping there. Just a week later, on Sunday, 13 July 2025, Prabowo met and discussed in front of journalists cooperation between Indonesia and the EU in developing Indonesia’s economy. Not only for the economy but also for geopolitical reasons. Indonesia’s effort to make agreements, dialogue, and meetings with actors who highlight global issues recently seems to secure its position.

“We found out that Indonesia’s motto is ‘unity and diversity’; one of our core sentences in the European Union is ‘united in diversity.’” Ursula von der Leyen said they share common sense.

In the EU-Indonesia joint presser to officially announce their strategic partnership in an uncertain economy and a confusing world. The partnership between them is not only for their economic interest but also as a depiction of what countries should do amid the instability and confusing situation.

Europe favors this cooperation first to strengthen the supply chain of critical raw materials, which Indonesia has abundant resources for. Europe is also seeking power for the clean and digital transition. Moreover, Europe would like to set a goal on geopolitics and security, particularly in ASEAN. Indonesia clearly says that the European Union is a significant partner for Indonesia’s economy and geopolitical stability in the global situation right now.

“Partnership between Europe and Indonesia, also being a large part of ASEAN, I think will be a very important contribution to economic and geopolitical stability in the world. We consider Europe to be very important for us. That’s why we would like to see more European presence and more European participation in our economy,” said Prabowo Subianto.

Future action of this agreement EU-Indonesia, it potentially massive investment in mining since the EU mentions critical raw materials in Indonesia. Indonesia will please welcome the EU to invest in this sector to leverage economic development. Despite this future prediction, Indonesian societies will have easier access to Europe as Ursula von der Leyen said,

“I’m pleased to announce that the European Commission has adopted a decision on a visa cascade. It means that from now on, Indonesian nationals visiting the European Union for a second time will be eligible for a multi-entry Schengen visa. This will make it easier to visit, but also to invest, to study, and to connect.”

Both of them have a beneficial partnership with a long-term goal. It seems Indonesia does not want to lose its investor and 5th market for commodities. Also, Europe does not want to lose its core country to secure its position in Southeast Asia and its supply chain of raw materials, obviously for its goal of energy transition. To secure a position in an uncertain world is one of the most important things for the EU to maintain its leadership, especially in the energy transition.

To conclude, Indonesia’s action in making cooperation with the EU one of its strategies in this uncertain world. We can see that prior to this agreement, Indonesia had met the BRICS countries in a summit with the same purpose of economic development. This action is a reflection of Indonesia’s principle of action in foreign policy, called “bebas-aktif.” Bebas means “free” in English, which is the right of Indonesia to act however they want without relying on one side; aktif means “active.” Is Indonesia actively promoting peace throughout the world? We can see Indonesia’s effort, which is one reflection of this principle.

A New Chapter in Global Escalation

Israel’s attack on the heart of Iran in June 2025 was not just the latest episode in the long history of the Middle East conflict. It was a loud signal that great power rivalry is now transforming into an open struggle, with Asia and the Global South as the main arenas of interest. For China, which has always maintained a balance between Iran and Israel, this war is a real test of its diplomatic strategy and national interests.

China: From Balancing to Taking Sides?

China has historically pursued a policy of “dual engagement” in the Middle East—strengthening economic ties with Israel while building a strategic partnership with Iran, especially in the areas of energy and security. However, the 2025 war revealed a significant shift in Beijing’s attitude. Just a day after the Israeli attack, China’s Ambassador to the UN, Fu Cong, openly called Israel’s actions a violation of Iran’s sovereignty and territorial integrity, while urging an end to Israel’s “military adventurism.” This strong statement was reinforced by President Xi Jinping and Foreign Minister Wang Yi, who reiterated their support for Iran’s right to self-defense and rejected further US military involvement.

This policy is not just rhetoric. China is a major buyer of Iranian oil, with more than 80% of Iran’s oil exports going to China—even amid Western sanctions. The 25-year partnership signed in 2021 deepens energy dependence and infrastructure investment, making Iran a key pillar of the Belt and Road Initiative (BRI) in the region. This relationship, economically and geopolitically, positions China as the main defender of Iran’s interests in global forums.

However, this position carries significant risks. China-Israel relations, which previously flourished in the technology and infrastructure sectors, are now experiencing serious rifts. Israel and its Western allies see China’s stance as a bias that undermines trust and narrows the space for dialogue. Iran, on the other hand, views China as an important strategic partner in the face of Western pressure, although it remains aware of the limits of Beijing’s commitment to direct military involvement.

Immediate Impact on Asia and the Global South: Energy, Economics, and Uncertainty

The domino effects of the conflict were immediately felt in Asia and the Global South. The surge in world oil prices—topping $75 per barrel—triggered inflation, increased the fiscal burden on energy-importing countries, and depressed people’s purchasing power. Indonesia, India, and ASEAN countries immediately evacuated residents from conflict zones, strengthened energy reserves, and prepared for economic contingency scenarios.

Asia’s dependence on Middle Eastern energy has now become a strategic vulnerability that cannot be ignored. Any threat to the Strait of Hormuz, a vital route for one-third of the world’s oil supply, immediately shakes markets and creates investment uncertainty. For countries in the Global South, energy price volatility means the risk of slowing growth, weakening currencies, and rising living costs—issues that exacerbate inequality and increase the potential for domestic political instability.

China as Mediator: Ambitions, Challenges, and Realities

China is seeking to capitalize on this momentum to assert itself as a global mediator. Beijing has actively offered itself as a mediator, pushed for a ceasefire, and called for multilateral dialogue in forums such as the UN and the Shanghai Cooperation Organization (SCO). In its official narrative and state media editorials, China has emphasized the importance of a political solution, respect for sovereignty, and rejection of Western-style “unilateral intervention.”

However, the effectiveness of China’s mediation role faces real limitations. China’s influence over Israel is very limited, given Tel Aviv’s closeness to Washington and skepticism of Beijing’s neutrality. On the other hand, China’s over-involvement risks provoking a confrontation with the United States, which remains the dominant player in the Middle East. The reality on the ground shows that while China has been able to construct a narrative as a new counterbalance, its ability to truly change the dynamics of the conflict is still constrained by its limited military and political leverage.

Strategic Implications: Global Polarization and the Future of Asia

The Iran-Israel conflict deepens global polarization between Israel’s pro-Israel bloc (the US and its Western allies) and Iran’s pro-Iran bloc (China, Russia, and much of the Global South). Asian and Global South countries are now faced with a strategic dilemma: balancing relations with the two great powers without getting caught up in a rivalry that could undermine regional stability.

For China, this conflict is a test of its ambition to become a leader of the Global South and a counterweight to Western dominance. Beijing’s firm stance in defending the principle of sovereignty and rejecting military intervention is a strong message to developing countries that have long felt marginalized in the global order. However, the challenge ahead is how to transform this diplomatic capital into real influence in resolving conflicts and building inclusive collective security mechanisms.

Conclusion: Asia and the Global South as Deciders of the Future

The Iran-Israel conflict and China’s response mark a new chapter in world geopolitics. Asia and the Global South are no longer spectators, but rather determiners of the future of the global order. By strengthening solidarity, policy innovation, and collective diplomacy, developing countries can take a greater role in maintaining world peace and prosperity. The challenges are great, but the opportunities to build a more inclusive and equitable world order are now wide open—and China, along with Asia and the Global South, is at the center of that change.

After the recent military escalations between Iran and Israel, where the U.S. was involved symbolically but in a limited manner, the focus of the international strategic community has shifted back to one of the world’s most important maritime chokepoints: the Strait of Hormuz. Although the matter of closing such a waterway has been around in various forms of threats since the 1980s, the current situation in the Middle East is a clear signal that those threats are going to be actual events instead of mere rhetoric. Accordingly, the issue of how the world would react to a decision of Iran to shut down or impose restrictions on the Strait is now not a merely theoretical discussion—it is a current situation that is capable of affecting the whole world.

Why Hormuz Matters

The Strait of Hormuz acts as the main artery through which around 20% of the world’s oil for trade and more than 30% of global liquefied natural gas are transported each day. Its narrow geography—only 33 kilometers wide at the narrowest point—makes it a region that is unstoppably within Iran’s influence. This location is critical as it is the area where the Middle East’s vast oil resources are transported to the world’s markets. A conflict here would not only be equivalent to cutting off the energy export infrastructure in Gulf countries like Saudi Arabia, the UAE, and Qatar but also to a power outage in international energy markets. In a global economic scenario currently facing various challenges such as supply chain realignments, inflationary trends, and geopolitical rivalries, the closure of Hormuz would not just be an energy crisis; it would be a major systemic event.

Military Feasibility and Constraints

Technically, Iran definitely has the capabilities to disrupt or block the Strait for a short period. The Islamic Revolutionary Guard Corps (IRGC) has multiple layers of assets in the region, such as fast-attack boats, coastal missile batteries, naval mines, and drone systems. It has been building and rehearsing asymmetric strategies that are intended to fool the shipping lanes and stop the U.S. from intervening in its navy; these strategies are implemented through repeated exercises. On the other hand, Iran could carry out such a closure or be the major disruptor, but the continuation of it would be difficult. This move would most probably incite a very strong and well-coordinated military counterattack from the United States and its partners, which may also include a multinational maritime security coalition, apart from those opponents mentioned. Besides that, the international community would certainly impose severe penalties on Iran in the form of retaliatory actions, diplomatic isolation, and economic free-fall. Therefore, it is possible that Tehran wants to continue to calibrate its harassment or partial closures instead of implementing a full-scale blockade.

Energy Security and Economic Fallout

An incident in the Strait of Hormuz would cause a very rapid increase in oil and gas prices, and Brent crude would probably go up to more than $150 a barrel in the first few days of the crisis. Energy-exporting countries—especially in Asia, where China, India, South Korea, and Japan are the main players—would not only have energy shortages but also energy price inflation. After the Ukraine crisis, Europe changed the direction of its gas imports to Gulf LNG, but it is still going to be affected. Though some capacity exists in the form of overland pipelines, like Saudi Arabia’s East-West system, these alternatives are not sufficient to make up for the shortage of the flow through Hormuz. The impact would be felt globally—through inflation, increased shipping insurance charges, currency instability, and lack of investor confidence in emerging markets. At the end of the day, the economic cost would not be limited to energy consumers alone; it would also hit the very core of the global economic interdependence structure.

Diplomatic and Legal Implications

International law legally defines the Strait of Hormuz as an international strait—that means it is the free navigation route allowed for ships under the law of the sea. This right of passage is given to ships registered as UNCLOS (United Nations Convention on the Law of the Sea). Although Iran is not a party to UNCLOS and they firmly believe that they have the right to issue regulations for traffic, especially at times of insecurity, they are nonetheless free to assert their prerogatives. This situation of uncertainty in the interpretation of the laws only goes to highlight a bigger issue: necks like Hormuz are not only regulated by law but also by power. When the legal norms conflict with geopolitical situations, the implementation of the law is more influenced by the use of force, negotiations, or peacekeeping units than by court decisions. In the course of the global order’s evolution toward multipolarity, traditional means of enforcement are more and more divided; the international community has to come to terms with the fact that maritime governance is at its end.

Global Responses and Strategic Calculus

If Iran were to interfere with the transit in the Strait of Hormuz in a serious manner, it would necessitate a strong reaction from the United States. The latter has always considered the freedom of navigation as a vital interest. To this end, they could send their naval forces, form coalitions as in 2019 and carry out Operation Sentinel, or ask the UN Security Council to solve the issue, though Russia or China are likely to block any resolution. European countries could request the de-escalation and the mediation of the conflict, but they do not have a unified military force in the region. China and India, on the other hand, need to think about their next moves: they can’t lose their energy security, but they shouldn’t look like they’re sticking with the West; otherwise, they’ll be in trouble with their other friends. Russia might be in a good position to profit from the rising oil prices, but on the other hand, it has to be careful not to damage its partnerships in the region. Most importantly, nations in the Gulf region such as Oman, Qatar, and the UAE are expected to be at the forefront of diplomatic efforts to calm down tensions, using their secret communication channels to reach a truce, thus preventing the situation from spiraling into open warfare.

Conclusion: A Chokepoint as a Global Fault Line

The hypothetical closing of the Strait of Hormuz has attracted attention not only to it as a regional conflict but also as a challenge for the international system. It displays, first of all, the weakness of energy and trade flows, which are extremely dependent on special narrow geographic corridors. Oddly enough, after so many years of discussions about energy diversification and supply chain resilience, the world still remains terribly dependent on several maritime corridors that are at the center of geopolitical struggles. The second point is that this event shows the absence of any credible regional security framework in the Persian Gulf. Several next attempts to build inclusive architectures—whether led by the United States, Russia, or even China—were not successful in creating crisis prevention or conflict resolution mechanisms. As a result of this situation, the region is no longer strategically stable but becomes reactive all the time.

On the third point, the whole situation with Hormuz undermines those sea governance foundations that still remain. Legal concepts like transit passage only work when they are supported by a multilateral consensus and have credible enforcement. In their absence, rules give way to power politics, and coercive signaling becomes a tool of diplomacy. Way, The precedent it would establish at Existing even time would lead to other chokepoints at play: the Suez Canal, the Bab el-Mandeb, and the South China Sea. In conclusion, the crisis would be a strong reassertion of the supply of preventive diplomacy. The current escalatory spiral between Iran and Israel, compounded by the lack of sustained dialogue mechanisms, leaves the door open for miscalculation and unintended conflict. Restoring regional diplomacy, be it through a new Gulf security initiative or improved nuclear talks, is not an option—it is a must.

In conclusion, the Strait of Hormuz is definitely not only a maritime corridor. It is a political fault line where local crises meet with global insecurity. The manner in which the international community deals with or neglects the danger could be the factor that decides the path of world peace in the next ten years.

Abstract: Amidst the challenges of digital transformation in developing countries, M-Pesa emerges as a local innovation that successfully empowers communities through mobile phone-based financial services. Launched in Kenya in 2007, M-Pesa expands access to financial services, drives regional economic integration, and opens up new opportunities for small businesses. While offering great potential to expand global financial inclusion, M-Pesa faces challenges such as global fintech competition, digital security risks, and regulatory misalignment between countries. To maintain its relevance, M-Pesa must continue to innovate while remaining rooted in local needs and the principle of inclusivity.

In the midst of global digital transformation, many developing countries face major challenges in accessing and utilizing technology to drive economic growth. Limited infrastructure, low levels of digital literacy, and unequal access to financial services are major obstacles in this process. Despite these challenges, local innovations have emerged that address the specific needs of their communities. One example is M-Pesa, a mobile phone-based financial service introduced in Kenya in 2007. From a simple need for a safe and fast money transfer system in areas with limited access to banks, M-Pesa has grown into a global phenomenon that is changing the face of local and regional economies.

M-Pesa not only offers easy financial transactions for individuals but also opens access to microcredit, insurance, and business payment services (Kagan, 2023). Thus, M-Pesa shows how innovation based on local needs can be a catalyst for inclusive digital transformation. The presence of M-Pesa contributes to economic integration, both at the national level and between countries in the East African region. This service proves that digital solutions designed with local context in mind can address structural challenges, accelerate economic growth, and improve social stability. Through the design of M-Pesa, it can be understood that empowering local innovation is essential in driving sustainable digital transformation for local needs while strengthening economic connectivity in an increasingly digitized world.

M-Pesa: Local Innovation in the Digital Age

In the discourse of digital transformation in developing countries, M-Pesa has become a hot topic of discussion as one of the successful models of innovation based on local needs. Understanding the significance of M-Pesa needs to be seen through the process of formation, development dynamics, and the implications of this innovation on socio-economic structures. M-Pesa emerged in 2007 in Kenya, developed by Safaricom—a subsidiary of Vodafone—as an answer to the lack of access to formal banking services (Wachira & Njuguna, 2023). At the time, the majority of Kenyans, especially in rural areas, did not have bank accounts. This created a need for a simple, cheap, and widely accessible financial system. Herein lies the main strength of M-Pesa, which does not seek to replicate Western banking systems but rather builds solutions that fit local realities. This shows that successful innovation in the digital age is not a mere transplant of global technology but rather a smart contextual adaptation.

The rapid development of M-Pesa brings features from an SMS-based money transfer service to a financial ecosystem that includes bill payments, goods purchases, savings, microloans, and insurance (Schachter, 2018). This transformation not only expands financial services but also disrupts the traditional role of banks, which has been exclusive to the upper middle class. Amidst the praise for M-Pesa’s financial inclusion, there is also criticism about the unequal access to technology. Although based on a relatively simple SMS, the service still requires ownership of a mobile phone and a stable telecommunications network, two things that are unevenly distributed across Kenya and East Africa. This shows that digital innovation, if not accompanied by investment in basic infrastructure, can deepen the gap between those who are connected and those who are left behind. M-Pesa is proof that local innovation can be a lever for structural change. In the current context of globalization, the challenge ahead is to ensure that digital transformation based on local innovation is not just a tool of market integration but also an instrument of sustainable social empowerment.

M-Pesa as an Instrument of Economic Integration

In the era of economic globalization, integration is no longer only determined by the relationship between large countries but also by the ability of lower society groups to connect directly through technology. In this context, M-Pesa emerges as an innovative instrument that accelerates economic integration, especially in the Global South, which has often been marginalized in global finance. M-Pesa accelerates cross-border transactions by providing a simple and fast money transfer solution, even without requiring access to a traditional bank. Services such as Mobile Money Transfer (MMT) enable migrant workers in the East African region to send money to their families at a much lower cost and in a much faster time than conventional financial institutions (Safaricom, 2023).

M-Pesa also opens up opportunities for small businesses to connect with a wider market. With easily accessible digital payment services, micro-merchants can conduct transactions across regions without having to rely on expensive banking infrastructure. This strengthens the position of small businesses as important actors in the global supply chain while encouraging more inclusive, people-based economic growth. Innovations in M-Pesa are able to overcome classic barriers, such as the inability to access credit. With M-Pesa, there is an increase in regional financial connectivity, particularly in East Africa. With widespread adoption in Kenya, Albania, the Democratic Republic of Congo, Egypt, Ghana, India, Lesotho, Mozambique, Romania, and Tanzania, M-Pesa creates a kind of digitally connected regional financial ecosystem (Owigar, 2017). This reduces both domestic and cross-border transaction costs and ultimately increases the efficiency of the region’s economy. In the long term, M-Pesa shows potential to accelerate the formation of a more integrated and competitive regional market.

Opportunities and Challenges of M-Pesa in the Future

Given its multiple successes in revolutionizing financial services in East Africa, M-Pesa has a great opportunity to expand its role in the global digital economy. M-Pesa’s success cannot rely solely on the old model. Continuous innovation and adaptation to new technology trends are key to sustaining M-Pesa. Despite its success in Kenya and several other countries, many other regions in the Global South still face similar problems. By adapting its approach to local characteristics, M-Pesa has the potential to become an inclusive financial platform that transcends regional boundaries and becomes a global player in digital financial inclusion.

While M-Pesa offers great opportunities to expand financial inclusion and strengthen economic integration, it is undeniable that the platform also faces serious challenges that could hinder or even reverse its achievements. When M-Pesa is not managed properly, its success today can become a source of vulnerability in the future. One of the main challenges is the increasing competition from global financial technology companies. With the entry of big players like PayPal and various local fintech startups, the digital financial services market has become increasingly competitive. When M-Pesa fails to innovate or expand services according to the needs of the new digital generation, it will be very risky to be abandoned, especially by the younger generation, who are more sensitive to faster and more flexible technology options. In addition, digital security issues are a threat that cannot be ignored. The growing volume of transactions through M-Pesa makes the platform a potential target for cyberattacks, data theft, and digital fraud. In a context where many users do not yet have strong digital literacy, a security breach can destroy the trust that has been built over the years and worsen the stability of the service.

As M-Pesa expands, differences in legal frameworks and consumer protection between countries are a major obstacle. If there is no alignment in terms of policies, users in certain countries may become more vulnerable to data abuse. In facing the future, M-Pesa must stay true to its core principle of addressing the needs of the community through simple, affordable, and inclusive technology. Consideration of digital risk resilience, the courage to compete fairly, and a commitment to maintaining economic justice in the midst of an increasingly complex digital ecosystem need to be improved. Innovation created from local needs is the key for M-Pesa to survive, not only as a transaction tool but also as the foundation for a more equitable and sustainable digital economy.

As Canada hosts the G7 Summit in Kananaskis, Alberta, from June 15 to 17, 2025, an orchestra of economic collapse plays across free economies like Canada, the United States, and the European Union. The conductor is not war or scarcity but a silent plague: Anti-Job Creation Syndrome, fueled by a job-seeker mindset where individuals, driven by a quest for stability, prioritize secure careers over the daring act of building enterprises.

Job creators, those rare alchemists who forge businesses from dreams, are the antidote, yet they are stifled by a culture that clings to caution. Canada’s G7 presidency must spark a global shift toward job-creating prosperity or risk a financial collapse that reverberates across continents.

The spark of entrepreneurial mysticism—a primal force weaving prosperity from village squares to global markets—has long defined human progress. From the wheel’s invention to Steve Jobs’ digital revolution, this unexplainable drive has birthed enterprises, from humble workshops to towering giants.

In Canada, small and medium-sized enterprises account for 50% of GDP, yet too many falter under job-seeker policies that favor bureaucracy over risk. In contrast, China’s job creators drive 60% of GDP; their billion entrepreneurs are a symphony of innovation. Canada’s G7 stage must champion this mysticism to counter the syndrome’s chokehold, lest free economies fade into a dissonant fog.

Free economies suffer because 99% of their economic teams are job seekers, trained to support enterprises, not start them. Job creators, wielding tacit knowledge—the intuitive brilliance of innovation—face a world that prizes explicit skills like accounting or law. Canada’s education system, like its G7 peers, churns out resume-builders, not enterprise-builders, leaving small businesses to wither.

Across the European Union, 50% of small enterprises have closed since 2020, while India’s multi-million startups thrive on risk-taking. This divide fuels the Anti-Job Creation Syndrome, where job seekers caution against starving the entrepreneurial flame. Canada must lead the G7 in nurturing job creators, not coddling job seekers.

The global economy splits into abstract and real realms. Abstract economies, like those of Canada and the United States, indulge in financial games—stock manipulations and debt bubbles—while real economies, grounded in value creation, flourish in job-creator nations.

Canada’s enterprises, burdened by $1.3 trillion in national debt, struggle in this abstract haze, unable to match China’s relentless advance. G7 elections, despite bold promises, fail to launch grassroots prosperity, blinded by job-seeker policies. The summit’s focus on digital resilience and climate change risks missing the primal need for enterprise creation. Canada’s leadership must shift this narrative to real economies, where job creators forge lasting wealth.

Canada’s G7 presidency is a clarion call to host a global summit, uniting nations to forge strategies for real economies rooted in value creation. The absence of bold economic debates to address declining productivity demands this reckoning. When 99% of economic teams lack the spark to grow small and medium-sized enterprises, the damage is profound.

How long will Canada’s enterprises languish in debt’s shadow? A summit could draw lessons from job-creator nations, rekindling the entrepreneurial mysticism embedded in every community.

Five steps chart the path: promote entrepreneurial education to inspire job-creators; incentivize small and medium-sized enterprises with tax breaks; invest in training that blends tacit and explicit knowledge; foster public-private partnerships to break dependency; and convene a summit to share value-driven strategies.

The world watches as Canada stands at Kananaskis, its G7 baton poised to conduct a new symphony. Free economies teeter on collapse, their job-seeker mindset a weary colossus crumbling under caution.

Why is Expothon Worldwide gaining global attention? An international platform for entrepreneurial innovation and authority on National Mobilization of SME protocols, now so focused on 100 countries. Why is it challenging to use immediately deployable methodologies for all massive SME sectors within the GCC, OIC, European Union, African Union, Commonwealth, BRICS, and ASEAN for national mobilization of entrepreneurialism as pragmatic solutions? Over the last decade, these insights have been shared weekly and reached approximately 2000 selected VIP recipients at the National Cabinet-Level senior government officials across 100 free economies. This track record of expertise and trust forms the foundation of its proposed strategies.

Population-rich nations like India and China play a vibrant melody; their billion entrepreneurs are a testament to the reward of risk. Canada must lead the G7 in unleashing job creators, not job seekers, by forging enterprises that light up the global stage. Free economies and G& have some bigger challenges, like facing the anti-job creation syndrome.

Without this mega-shift, the old economic model risks a grand financial collapse, leaving free economies in darkness. Canada’s summit is the last stand to ensure job-creators triumph, creating a future of prosperity for all.

The rest is easy.

The public and dramatic clash between the incumbent President Donald Trump and tech tycoon Elon Musk—two of the United States’ most popular and powerful figures—has escalated the political chaos of a novel sort in the U.S. political culture. In addition to shocking their supporters, their recent rift has revealed the profound and growing ideological and economic divisions in American society. They were once close friends nonetheless. Using important quotes, posts on X, and reliable data, this essay explores the causes and effects of their conflict in order to shed light on the larger American crisis.

A Glance at Trump-Musk Amity

Deregulation, economic protectionism, and a shared detestation of what they called ‘wasteful government spending’ served as the foundation for Donald Trump and Elon Musk’s amity. According to Federal Election Commission filings, Musk was a major supporter of Trump’s 2024 campaign, giving an estimated $300 million. In order to reduce bureaucratic expenses and streamline federal agencies, Trump then created the Department of Government Efficiency (DOGE) and appointed Musk as its head. A new era of American political-cum-economic strategy was marked by this odd friendliness between the then-former president and a tech billionaire.

This amity was evident in Musk’s initial post on X. Musk posted on May 12, 2025:

“Proud to help make America more efficient and innovative. DOGE is about unleashing our true potential. #MakeAmericaEfficient”

On May 15, 2025, Trump returned the compliment by tweeting:

“Elon Musk is a true American genius. With DOGE, we’re cutting the waste and putting America first again! #MAGA”

The media extensively reported on their public amity, with many analysts pointing out that Trump’s populist rhetoric combined with Musk’s technological vision made them a powerful force in the U.S. political culture.

The Fault Lines of Ideology and Economics:

The Trump-Musk relationship deteriorated after Trump’s new spending bill was put into effect, despite their initial unity. The bill called for significant cuts to funding for healthcare and education, higher import duties, and large tax cuts for the capitalists, particularly entrepreneurs in America. The Congressional Budget Office estimates that over the next ten years, the bill would increase the national debt by $2.5 trillion. This bill exposed the profound differences over fiscal policy and social priorities and provoked intense debate among economists, politicians, and the general public.

Musk made his opposition apparent on May 28, 2025, in a widely shared X post:

“This new spending bill is fiscal insanity. We’re mortgaging the future of every American for the benefit of a few. Time to wake up! #DebtSlavery”

During a broadcast interview with CNBC, Musk clarified:

“We’re heading toward a debt crisis that will enslave future generations. Cutting essential services while giving tax breaks to billionaires is not just bad policy—it’s immoral.”

Never one to back down from a public challenge, Trump responded on his Truth Social account:

“If Elon wants to save money, maybe he should give up the billions in government incentives his companies get. No more free rides for Tesla! #AmericaFirst”

Millions of followers magnified these interactions, which soon made headlines and provoked contentious debates on all political sides.

Historical Context: Reminiscent of Roosevelt and Reagan

The Trump-Musk rift is not happening alone; Ronald Reagan, who promoted tax cuts, deregulation, and the dismantling of social programs from the New Deal era in the 1980s, is echoed in Trump’s rhetoric and policies. According to economists like Joseph Stiglitz, Reagan’s ‘trickle-down economics’ theory has mainly fallen short of its promise that the wealthy would eventually benefit the general populace.

In his book The Price of Inequality, Stiglitz notes:

“The top 1% have seen their incomes soar, while the middle class has stagnated. The idea that wealth would trickle down has proven to be a myth.”

The legacy of Franklin D. Roosevelt’s New Deal, which established the contemporary American welfare state in reaction to the Great Depression, has always been the true target of these policies. The Social Security Administration claims that these reforms created a social safety net that is still essential today and helped millions of people escape poverty. The American economy and society were radically altered by the New Deal’s organizations and initiatives, like Social Security and unemployment insurance, which offered security and hope in times of need.

Inconsistencies in the Economic Agenda of Trump

There are serious inconsistencies in Trump’s economic policy. He intends to increase revenue through tariffs, particularly on Chinese imports, while simultaneously advocating for additional tax breaks for corporations and the wealthy. He encourages domestic industrialization while undermining important organizations that foster economic planning and innovation, such as government agencies and universities. A contradictory outlook for the future of the American economy is produced by this combination of nationalist protectionism and pro-business incentives.

But instead of creating jobs at home, corporate tax cuts frequently result in offshore investments and profit hoarding, as the Tax Policy Center notes. According to the U.S. Chamber of Commerce, the imposition of tariffs has also harmed American manufacturers who depend on international supply chains. Both the business community and regular Americans, who perceive little improvement in their own economic prospects, are perplexed and frustrated by these contradictions.

Musk brought attention to these inconsistencies in his X post on June 1, 2025:

“You can’t cut taxes for the rich, raise tariffs, and expect manufacturing to boom. The math doesn’t work. We need real solutions, not slogans.”

Several economists, who have long maintained that balanced policies that promote both social welfare and innovation are necessary for sustainable economic growth, found resonance in this statement.

The Clash: Political and Social Repercussions

Both the Republican Party and the general American public have been rocked by the public rift between Trump and Musk. The possibility of losing Musk’s financial and technological support worries a lot of Republicans. The poor and middle class will be disproportionately harmed by the spending bill’s cuts to healthcare and education, according to critics. The debate has also revealed divisions within the Republican Party, with some members voicing worries that Trump’s strategy is alienating important groups and jeopardizing the party’s long-term viability.

According to a June 2025 Pew Research Center survey, 62% of Americans think the nation is ‘headed in the wrong direction,’ with growing worries about political dysfunction and inequality.

Trump has responded in his usual combative manner. At a rally on June 3, 2025, he said:

“We don’t need billionaires telling us how to run our country. We need strong leadership and American values. If Musk doesn’t like it, he can take his rockets and go home.”

In addition to energizing Trump’s supporters, this rhetoric has widened rifts both within the party and across the nation.

The U.S. image in the world amidst domestic chaos

The U.S. has become more assertive overseas as domestic tensions have increased. The U.S. has expanded its military presence in areas like Eastern Europe and the South China Sea because it is unable to keep up with China’s economic growth. In 2024, U.S. military spending hit $950 billion, the highest in the world, according to the Stockholm International Peace Research Institute (SIPRI). This aggressive foreign policy is seen by some analysts as a symptom of imperial decline, as the U.S. seeks to maintain its global influence despite mounting internal challenges.

In his book The Rise and Fall of the Great Powers, historian Paul Kennedy makes the following claim:

“Empires in decline often resort to military solutions as their economic base erodes, leading to overextension and eventual collapse.”

As America’s internal crises increasingly influence its actions on the international scene, these developments have important ramifications for maintaining global stability.

Lessons for other nations

For nations like Pakistan, which have traditionally depended on U.S. assistance, the Trump-Musk conflict and the larger American crisis provide crucial lessons. The dangers of becoming too close to a waning superpower increase as American politics become more erratic. Instead, countries are encouraged to steer clear of what Musk has referred to as ‘imperialist dollar wars’ and instead pursue autonomous, people-centered development. In an era of such volatility, it is becoming more and more dangerous to rely on the United States for economic or security guarantees.

In conclusion, more than just a personal disagreement, the public rift between Elon Musk and Donald Trump is a reflection of the profound inconsistencies and problems the U.S. is currently facing. The limitations of trickle-down economics, the perils of unbridled debt, and the brittleness of alliances based on expediency rather than values have all been made clear by their conflict. The world keeps a close eye on America as it struggles with its internal conflicts and external issues, knowing that the outcome of this superpower will have an impact on the entire world. The Trump-Musk rift is both a sign and a symptom of a country at a turning point, with its internal contradictions exposed for everyone to see and its future course uncertain.

ASEAN nations have been closely observing the trajectory of US-China relations and have expressed their apprehensions vis-à-vis the uncertainty arising out of Trump tariffs. Leaders of Singapore and Malaysia have been particularly vocal in expressing their apprehensions.

While speaking at the opening of the 46th ASEAN Summit held at Kuala Lumpur, the Malaysian PM, Anwar Ibrahim, referred to the imposition of tariffs by US President Donald Trump. Said the Malaysian PM:

‘Indeed, a transition in the geopolitical order is underway, and the global trading system is under further strain with the recent imposition of US unilateral tariffs,’

How ASEAN countries have benefited from the China+1 strategy

Here it would be pertinent to point out that ASEAN nations have also benefitted from the China+1 strategy of Western companies. Through this strategy, Western companies have been keen to reduce their dependence upon China and have been shifting to several ASEAN countries. Companies have moved from China not just to Vietnam but to other ASEAN nations like Indonesia and Malaysia as well.

Impact of China-US thaw on ASEAN

While many would have thought that ASEAN countries would heave a sigh of relief after the China-US agreement signed in Geneva, via which the US reduced tariffs against China from 145 percent to 30 percent. There has been a mixed reaction to the same, given the possibility of companies redrawing their China+1 plans.

Malaysia’s interest in BRICS+

Another important impact of Trump’s policies has been ASEAN countries seeking entry into multilateral organizations. Indonesia entered BRICS as a member in January 2025.

Malaysia, which entered BRICS as a partner country in October 2024, has also applied for full membership. Two other ASEAN countries, Vietnam and Thailand, also entered BRICS.

Malaysian Foreign Minister Mohamad Hasan, while commenting on the ASEAN nation’s interest in joining BRICS:

‘Malaysia’s desire to join BRICS represents its effort to uphold policies and identity as an independent and neutral country, striking a balance with great powers and opening up new business and investment opportunities,’

Malaysia shares close economic ties with China as well as the US and the EU. Malaysia’s bilateral trade with China in 2024 exceeded $200 billion ($212.04 billion). The ASEAN nation’s trade with the US was estimated at $80.2 billion in 2024.

The Malaysian PM, Anwar Ibrahim, had earlier proposed an ‘Asian Monetary Fund’ as an alternative to the International Monetary Fund (IMF). In recent years, Malaysia has been pushing for “de-dollarization,” or trade in non-dollar currencies, with several countries.

Anwar Ibrahim’s Russia visit and discussion of BRICS+

Apart from several other bilateral issues, the role of Malaysia in BRICS+ was also discussed during the recent meeting between Malaysian PM Anwar Ibrahim and Russian President Vladimir Putin during the former’s Russia visit. The Malaysian PM thanked Putin for his role in facilitating Malaysia’s entry into BRICS+. The Russian president, on his part, welcomed the entry of Malaysia and other ASEAN nations as partner countries into BRICS+ during Russia’s chairmanship of BRICS+ in 2024.

During the meeting of Australian PM Anthony Albanese and Indonesian President Prabowo Subianto during the former’s Indonesia visit, one of the issues that was discussed was Indonesia’s entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and OECD. The CPTPP—earlier the Trans-Pacific Partnership (TPP)—was initially conceived by former US President Barack Obama. During US President Donald Trump’s earlier presidency, the US had pulled out of TPP. While the organization did face a setback after the US exit from the CPTPP — members like Japan and Australia, which are wary of China’s growing clout in the Indo-Pacific, have been playing a key role in giving a push to economic linkages. Two other ASEAN countries—Malaysia and Vietnam—are already members of the CPTPP.

The Indonesian president thanked Australia for its support for Indonesian into the CPTPP.

The Australian PM, while commenting on his support for Indonesia’s entry into CPTPP:

‘I assure you, Mr. President, of Australia’s support for your joining the OECD as well as your accession to the CPTPP.’

The Australian PM also reiterated Indonesia’s strategic importance in the context of the Indo-Pacific.

Indonesia’s important role on the global stage

Indonesia has robust ties with both China and the US and seeks to use multilateral platforms for further enhancing its clout, as several middle powers have done in recent years. Indonesia has sought to present itself as an important voice of the Global South and as an important link between the G7 and G20.

ASEAN-China-GCC

On the sidelines of the ASEAN Summit, the first ASEAN-China-GCC Summit was held for the first time. The Malaysian PM dubbed this as extraordinary. Anwar Ibrahim also said:

‘I am confident that ASEAN, the GCC, and China can draw upon our unique attributes and shape a future that is more connected, more resilient, and more prosperous.’

Conclusion

In conclusion, the interest of countries like Malaysia and Indonesia in entering multilateral organizations is driven by the changing geopolitical situation in ASEAN and beyond. These nations need to be deft and nimble and can not afford to have a zero-sum approach towards the same. The recent ASEAN Summit is a strong illustration of how ASEAN member states are seeking to diversify their relationships by seeking entry into important multilateral blocs. Apart from this, one point that is evident from the recent ASEAN summit was that ASEAN as a grouping is also seeking to strengthen ties with groups like the GCC.

In the world of international relations, foreign aid is not simply about altruism. It is a very complex thing, as Carol Lancaster points out in her fundamental work, Foreign Aid: Diplomacy, Development, and Domestic Politics: Aid is not just about pure altruism or even pure development. It is also about a country’s diplomacy, its domestic politics, and other broader strategic interests. In today’s evolving global landscape, this diplomatic element has increased even further. Today, the world is no longer dominated by one or just two superpowers, but rather a new multipolar order has taken shape, giving rise to a phenomenon or concept that we can call “competitive aid.”

Aid is no longer about who gives more, but rather about a high-stakes game in which countries use it to compete, gain advantage, and consolidate their influence in a country or region. Under these conditions, what does this increased competition mean for recipient countries? Does it really lead to better outcomes for developing countries? Or is it just creating a mess of fragmented efforts, redundant projects, and inappropriate prioritization by geopolitical shifting rather than actual development needs?

Foreign Aid Diplomacy in the New Global Era

To better understand “competitive aid,” we can recall where foreign aid diplomacy came from. For decades after World War II, especially during the Cold War, aid was largely a Western affair, with the United States in the lead. The narrative was often about rebuilding war-ravaged economies or, most importantly, preventing the spread of communist ideology. Aid is a key component of soft power, building alliances and promoting a particular vision of the global order.

Jump forward to the 21st century; the situation seems completely different. We have seen the rise of new economic giants, most notably China, as well as increasingly influential players such as India, Brazil, and the Gulf states. These are not just new faces on the list of donor countries. They bring very different philosophies, historical experiences, and, most importantly, strategic interests. China’s Belt and Road Initiative (BRI) is a very clear example. It is a massive infrastructure financing project that often offers large-scale loans on easier political terms than the approach of traditional Western donors. On the other hand, the European Union emphasizes human rights and good governance in its development cooperation. Meanwhile, US aid often ties its assistance directly to national security concerns, such as stabilizing an unstable region or securing vital supply chains. This diversity of donors, each with their own geopolitical strategies, has undeniably increased competition for aid.

The Dynamics of “Competitive Aid”

So, what exactly does “competitive aid” look like on the ground? It is a complex form of diplomacy where development projects are likened to pawns on a global chessboard. Donor countries are not just writing checks; they are actively competing for influence by offering what they expect to be the most attractive terms, the most impactful projects, or the most strategically aligned visions. The most prominent example of this competitive dynamic is seen in the global scramble for infrastructure development and connectivity. China’s BRI, launched more than a decade ago, has poured massive investment into roads, railways, ports, and digital networks across the continent. While Beijing insists that it is purely about economic growth and trade, it is hard to disregard the undeniable geopolitical implications of expanding China’s economic reach and gaining political influence as a result. A simple example is the Hambantota port project in Sri Lanka. While the project has economic aspirations, its handover to Chinese control due to Sri Lanka’s debt problems has sparked a heated debate on “debt trap diplomacy” and potential strategic leverage for Beijing.

In response, Western powers did not remain silent. The G7’s “Partnership for Global Infrastructure and Investment” (PGII) and the EU’s “Global Gateway” are a direct response and counter-response. These initiatives explicitly aim to provide a “value-based” alternative to infrastructure financing, emphasizing transparency, environmental sustainability, and fair labor practices. It is a clear competition over who will build the next big highway or port, with recipient countries finding themselves persuaded by many different parties offering favors.

However, competitive aid goes beyond just concrete and steel alone. It is also fiercely played out in efforts to gain access to resources. Donors might sweeten the aid package with agreements that guarantee access to vital minerals—for example, cobalt in the Democratic Republic of Congo or lithium in Latin America—or other important energy supplies. This could manifest as direct investment in extractive industries or broader development programs designed to stabilize strategic resource-rich regions. And let’s not forget the drive to grow political influence and shape the international norm. This can involve financial support for democratic institutions, judicial reform, or civil society groups, all aimed at promoting the donor country’s preferred governance model. Sometimes, it is more transactional in nature, with aid subtly or overtly linked to the recipient country’s support for the donor country’s position on international forums, such as votes in the UN or alignment on key geopolitical issues. This competition is not just about physical assets; it is about hearts, minds, and diplomatic solidarity.

So, what does all this competition mean for aid effectiveness and how it is coordinated? To be honest, it’s a double-edged sword that offers both exciting possibilities and significant headaches for recipient countries. On the one hand, a diverse donor landscape can be a good thing. With many players offering aid, recipient countries may find themselves in a stronger bargaining position. They can potentially negotiate better terms, more flexible loan conditions, or projects that are truly aligned with their own development plans. This is a bit like a “buyer’s market” for development, which, in an ideal world, could lead to more aid flows and faster progress. Just imagine a country in need of a new national railroad, perhaps getting attractive bids from Chinese, European, and American consortiums, allowing them to choose the best fit. This competitive pressure may even encourage donors to be more responsive to local needs.

However, the drawbacks of competitive aid are often greater, creating real challenges for aid effectiveness. First, when donors focus primarily on their own strategic interests, it often leads to a lack of coordination that is ultimately underwhelming. Donors may ignore existing national development strategies or multilateral coordination mechanisms and prefer to work bilaterally to maximize their own visibility and influence. This can result in fragmented aid efforts, where projects are undertaken in isolation, without synergy or a cohesive approach to a country’s overall development. Imagine a scenario where multiple donors fund separate, unconnected health clinics in the same district, rather than collaborating to build a comprehensive and integrated healthcare system. This duplication of efforts and resources is simply very inefficient and certainly wasteful.

Second, competitive aid can easily lead to misplaced development priorities. Recipient countries, desperate for funds, may feel pressured to accept projects that primarily serve the donor’s strategic agenda, even if it is not the most urgent or beneficial for themselves. This can result in the infamous “white elephant” projects with large-scale infrastructure that look impressive but are economically unfeasible or poorly integrated into the local economy. They become more about donor prestige than real development goals. And then there is the obvious risk of an increased debt burden. While the “debt trap diplomacy” narrative (the idea that China deliberately traps countries in debt to seize assets) is the subject of ongoing academic debate, the reality is that large, non-transparent loans from multiple sources can pile up very quickly. If these projects do not generate sufficient economic returns, recipient countries can find themselves trapped in ongoing debt and forced to divert critical resources from social services to debt repayment.

Finally, this competitive dynamic could erode multilateralism and established international development norms. If powerful countries consistently prioritize interest-driven bilateral aid over collaborative efforts through multilateral bodies, it will undermine institutions designed to promote coordinated, principles-based development. This could erode trust, create parallel aid structures, and make it harder to address global challenges that truly require collective action, such as climate change or future pandemics, which demand a united front. The recent decline in official development assistance (ODA) from some traditional donors, partly due to domestic refugee costs and shifting geopolitical priorities, further underscores how fragile the aid landscape is in this competitive environment.

A Path Forward: Navigating the New Aid Landscape

It is clear that foreign aid diplomacy has undergone a profound transformation. What was once a tool for post-war reconstruction has become a central player in today’s complex geopolitical arena. The rise of new global powers has undeniably ushered in an era of “competitive aid,” where development assistance is increasingly becoming a strategic asset in the pursuit of influence and advantage. Despite the tempting promise that this competition might offer more choice and leverage to recipient countries, fragmentation, duplication, distorted priorities, and the continuing shadow of debt present formidable obstacles to proper and long-term development.

So, where do we go from here? Responsibility certainly lies on both sides. For recipient countries, it is crucial to develop strong strategic planning capacity and sharpen their negotiation skills. This is not just about receiving money but rather about ensuring that foreign aid actually serves their national development agenda rather than being a mere pawn in a larger geopolitical chess game. For donor countries, while national interest will always be a driving force, there is a strong argument for a renewed commitment to coordination, transparency, and adherence to internationally agreed principles of aid effectiveness. In conclusion, moving beyond a purely competitive mindset towards a more collaborative approach to foreign aid diplomacy is very essential. It’s not just about being generous. It is about how to effectively address global challenges together and build a more just and prosperous world for all. The shifting balance of power demands not only new strategies but also a careful re-evaluation of the purpose and practice of foreign aid itself.