Mentions International Monetary Fund (IMF)

This is a brilliant explainer. Here's the punchline:

Industrial policy was once central to the rise of today’s wealthiest nations. Yet, after achieving their own development, many downplayed the state’s role, promoting free-market rules abroad. The climate crisis forces a re-evaluation of that legacy. China offers a striking example of what strategic planning can achieve. Long before emerging as a global leader in green technologies, it used industrial policy to build manufacturing capacity, infrastructure and innovation. Through the coordinated efforts of state-owned enterprises, long-term planning, public procurement and technology transfer, China now leads global production of solar panels, wind turbines and electric vehicles. These interventions have helped drive down global costs, making renewables more accessible and helping to accelerate the energy transition worldwide.

This kind of coordination cannot be replicated by merely relying on market inducements like carbon pricing. When climate action is framed primarily as a problem of mobilising finance, the role of the state is reduced to simply enabling private investment rather than leading the transformation. Public institutions are cast not as planners or investors but as guarantors, tasked with making green investments more attractive to private actors. Tools like blended finance and public-private partnerships are promoted as solutions, but their logic reinforces the idea that structural change must be routed through private investors’ incentives. In practice, this limits the scope of public ambition and steers policy toward projects with clear financial returns rather than broader social or ecological value.

Market mechanisms may help reduce emissions at the margins, and may generate some revenue, but they are not designed to coordinate across sectors, manage trade-offs, or drive large-scale transitions. Treating finance as the central constraint sidelines the essential questions of what gets built, by whom and in whose interest. The belief that markets alone can deliver the necessary scale and direction has not only delayed progress but also distorted priorities—placing finance at the centre while allowing questions of production, capacity, and coordination to fade into the background.

As the United States retreats from managing the international order, returning under Trump to a more transactional and coercive approach to foreign policy—ditching the Paris Agreement, undermining multilateralism, and waging tariff wars under the banner of economic nationalism—it also exposes the fragility of the existing system. The version of globalization built on US financial dominance, free capital flows and market liberalization is beginning to crack under the weight of its own contradictions.

If this chaos has an upside, it is that it presents an opportunity to build an alternative—and radically more just—financial architecture, and to confront the economic orthodoxies that needlessly constrain what is considered possible.

A debt crisis of epic proportions in the Global South is unfolding. The debt crisis—on top of the continued economic and social fallout of the Covid-19 crisis, the climate crisis, democratic deficits in several national contexts, and the breakdown of cooperation and traditional alliances in the global community—dim the prospects of mobilizing vast quantities of the medium- and long-term financial resources necessary to reverse backsliding and make progress on the full range of the UN SDGs by the looming 2030 target. SDG 5 provides the impetus for this paper.

As with previous debt crises and the pandemic, the burdens of today’s debt crises are borne disproportionately by women and other vulnerable groups and nations. It’s therefore crucial that we explore opportunities for expanding and creating the fiscal space that national policymakers can use to support SDG 5.  I consider strategies that focus on a subset of external financial flows (namely, external debt, concessional finance, and special drawing rights). Some of the strategies I discuss are “gender-indifferent,” meaning that they are neither informed by concerns about gender nor do they directly target gendered inequalities. That said, gender-indifferent external finance strategies directly increase fiscal space and can indirectly support gender equality, if national policymakers have the political commitment and tools to use the space created toward this end. I also discuss gender-informed external finance strategies that can, to various degrees, directly support gender equality. And because austerity policies disproportionately affect women and girls, any strategies that ease external financing burdens and constraints necessarily support gender equality. It’s my intention that those advocating for women the world over will find a set of attractive and viable strategies for creating, expanding, and engendering fiscal space through strategies aimed at external finance at a time of overlapping crises. It’s my hope that this paper will be of use to those advocating for green transitions and for a just, inclusive global economy.

In this paper we provide an in-depth analysis of Pakistan’s macroeconomic situation.
We argue that although the stabilisation program signed with the IMF in November 2008 could
restore some "macroeconomic stability", it will depress the investment and unemployment
outlook, and it will not create the conditions that Pakistan needs for sustainable long-term
development. We put forward the foundations for a sustainable macroeconomic program for
Pakistan. This contains policy advice that differs markedly from that of the IMF. The essence of
the proposal is the consideration that a government that issues its own currency faces no financial
constraints or solvency risk. This implies that the usual “government budget constraint” has no
economic content. Based on this, we examine the potential role that the country’s fiscal and
monetary policies could play in promoting growth and in generating full employment and price
stability.

By following the IMF’s prescriptions, often at significant cost to national development goals, one would at least expect countries to have stabilised and avoided debt crisis. But 54 countries are now in a debt crisis and many are spending more on servicing their debt than on financing education or health.

The IMF has actively failed to prevent the present debt crisis which is today more severe than it was in the late 1990s and early 2000s.

Indeed, this hints at a basic problem. Debt is the source of power for the IMF. It is debt that forces countries to come to the IMF as the lender of last resort. It is debt that forces countries to accept the IMF’s harsh loan conditions and coercive advice on austerity, undermining their own development goals. Without debt, the IMF would be powerless!