- Between Chokepoints and Corridors: Connectivity, Competition, and the Future of Emerging World Order

#Chokepoints #Corridors #GlobalConnectivity #BRI #IMEC #Geopolitics #GeoEconomics #MiddleEast #Gulf #Hormuz #IndianOcean #EmergingWorldOrder

https://globalconnectivities.com/2026/04/between-chokepoints-corridors/

“A creditor is worse than a slave-owner; for the master owns only your person, but a creditor owns your dignity, and can command it.”*…

Developing countries around the world are deeply in hock. According to UNCTAD (UN Trade and Development), global public debt reached a record high of $102 trillion in 2024. Although public debt in developing countries accounted for less than one third of the total – $31 trillion – it has grown twice as fast as in developed economies since 2010. Those developing nations had debt service on that external public debt of $487 billion in 2023– which meant, for half of them, paying at least 6.5% of export revenues to service external public debt. More practically, that means that 3.4 billion people are living in countries that spend more on interest than on healthcare or education. [See the UNCTAD fact sheet here.]

Not surprisingly, developing countries sometimes fall sufficiently behind to call their loans into question. When that happens, an under-the-radar “informal group” of creditors– the Paris Club– gets together to negotiate a way forward…

The Paris Club is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by debtor countries. As debtor countries undertake reforms to stabilize and restore their macroeconomic and financial situation, Paris Club creditors provide an appropriate debt treatment. Paris Club creditors provide debt treatments to debtor countries in the form of rescheduling, which is debt relief by postponement or, in the case of concessional rescheduling, reduction in debt service obligations during a defined period (flow treatment) or as of a set date (stock treatment).

The origin of the Paris Club dates back to 1956 when Argentina agreed to meet its public creditors in Paris. Since then, the Paris Club has reached 484 agreements with 102 different debtor countries. Since 1956, the debt treated in the framework of Paris Club agreements amounts to $616 billion.

– Paris Club web site

The 22 members of the Paris Club are mostly the larger OECD members, plus Russia. South Africa is a prospective member, and China and India are Ad Hoc members. Organizations like the IMF, the World Bank, the African Development Bank, the Asian Development Bank, the Inter-American Development Bank, and the OECD are “observers.” Participants representing members are government officials. The U.S., for instance is represented by a State Department official (relying on positions formulated by the Treasury Department).

Sven van Mourik puts all of this into context…

In today’s world, finance is dominated not by states, but by private actors. The market capitalization of a company like Apple in December 2023 reached $3 trillion, exceeding the combined GDP of at least 140 countries. Last year, global private financial assets reached a record $291 trillion, of which some 50 percent is concentrated in North America. By contrast, the world’s nations together owed a global public debt of a record $102 trillion in 2024, of which so-called “developing” countries owe $31 trillion. While there’s a playbook for private debt and corporate bankruptcy, it’s a different story for the official debt owed by nation states. What happens when a state can no longer repay its foreign creditors?

Following a deep global debt crisis in the early 1980s, the world’s poorest states struggled to service impossible debts to foreign capital, leading to widespread revolts and humanitarian crises across the formerly colonized, developing countries of the Global South. Following the COVID-19 pandemic of 2020, the burden of this public debt is once again immense…

[van Mourik reviews some of the startling statistics cited above…]

… It is puzzling to see states prioritize the servicing of foreign debt, even when it directly harms their populations. Why not default? Experts at the International Monetary Fund and World Bank in Washington, D.C. claim that “there is no alternative” to what has become an ossified response to sovereign debt crises: cut the government budget, facilitate the private sector and grow your economy to repay your foreign debt. But what about when a state, fully cooperative with the policy measures prescribed by these institutions, still cannot repay its debts? 

As a financial historian, this question led me to investigate a creditor that routinely takes center stage as countries attempt to navigate sovereign default, an institution so secretive that it has largely escaped the public eye. The Paris Club, an informal forum of representatives from creditor countries largely in the Global North, has steered the destinies of nations in financial peril, restructuring over half a trillion dollars in sovereign debt since its first meeting in 1956. Without its approval, countries face default and can effectively be prevented from accessing long- and short-term trade credit — credit that facilitates the uninterrupted flow of goods across borders, and can be compared to a country’s life blood. Without it, states are unable to access vital imports like food, fuel and medicine.

The Paris Club convenes to set up a new payment schedule for a country at risk of defaulting on its “official” debt owed to other countries. It is unique in that despite its pivotal role, it remains an informal institution. It comprises 22 major creditor countries, including the United States, Germany and France, and occasional ad hoc participants like India and China, which together coordinate reduced or rescheduled debt payments for a country facing default.

The Paris Club itself doesn’t lend new money. Instead, it “treats” a country’s debt payment schedule, either through rescheduling interest payments or, since the late 1980s, by offering the poorest countries a “haircut” and partially restructuring the debt. In its 70-year history, including the recent Debt Service Suspension Initiative, the Paris Club has treated a total of $863 billion of debt for 102 countries through 543 agreements; this amounts to around two-thirds of the world’s sovereign debt restructurings through 2010. A staggering legacy for a group that lacks any public oversight. With some pride, former chairmen of the Paris Club’s secretariat have called the Club a “non-institution” and “totally discreet if not secretive.”…

[van Mourik unpacks the operations of the Club and explains its symbiotic relationship with the IMF and its “structural adjustment” programs– AKA “austerity,” the reduction of debtor government expenses, often on social welfare, education, and healthcare (and often to painful effect)

… While the Paris Club rescheduled debt payments, the IMF designed programs that served to optimize a country’s ability to pay back interest and principal; the arrangement has over the years evolved into a debt restructuring routine in which debtor countries have little say.

The IMF today remains an institution in which the countries of the Global North have nine times more voting power than the countries of the Global South, as voting rights are tied to economic weight. In the Paris Club, a similar power differential is reflected in the spatial and temporal arrangement of the procedures, which borders on the theatrical. A debtor country’s delegation only ever confronts its creditors alone and is required to leave the room when they deliberate to set the terms of a deal…

[van Mourik explores the consequences of these deals, concluding…]

… creditor-dominated organizations like the IMF and the Paris Club allow rich countries to remain at the helm of a sinking ship. After all, as economist Daniel Munevar concluded following the COVID-19 pandemic, continuing within our current framework of debt servicing would “sound the death knell” for the world’s climate ambitions, as it prevents debtor countries from implementing the costly policies needed to meet ambitious climate targets. Others conclude that a serious degrowth strategy, one that prioritized ecological sustainability and social well-being over growth for its own sake, would require the countries of the Global South to default. 

Various formations of countries across the Global South have proposed debt restructuring regimes, like the UN Framework Convention on Debt, that would “improve the fairness and transparency of debt resolution mechanisms.” Gabor, the economist, has called this new UN framework “a bid to wrest deliberative control away from the closed-door clubs where Northern financial might prevails.”The question is under what circumstances such strategies might be successful. Despite the Paris Club’s inclusion of non-Western members like Korea and Brazil, or the IMF and the Paris Club’s recent collaboration with China and the G20, the deck remains stacked against low-income borrowing countries, who “have little voice in any of these fora.”

The deeper challenge for all states is to reform a global financial architecture that evolved based on the interests of a handful of Western creditor states, at the cost of austerity and social destruction elsewhere. Debtor countries that wish to retain access to global markets — even for the most vital imports — must participate, and service their debt within regulatory frameworks over which they have no control and which have proven to be defective…

Who really controls international debt? “The Quiet Powerbroker,” from @thedialmag.bsky.social.

All this said, it’s important to note that in fact an alternative is emerging, but not one that’s in the spirit of the UN Framework. Even before the Trump Administration took the U.S. off the field, China had become the world’s largest development lender.

“How China Lends: A Rare Look into 100 Debt Contracts with Foreign Governments“:

We collect and analyze 100 contracts between Chinese state-owned entities and government borrowers in 24 developing countries in Africa, Asia, Eastern Europe, Latin America, and Oceania, and compare them with those of other bilateral, multilateral, and commercial creditors. Three main insights emerge. First, the Chinese contracts contain unusual confidentiality clauses that bar borrowers from revealing the terms or even the existence of the debt. Second, Chinese lenders seek advantage over other creditors, using collateral arrangements such as lender-controlled revenue accounts and promises to keep the debt out of collective restructuring (“no Paris Club” clauses). Third, cancellation, acceleration, and stabilization clauses in Chinese contracts potentially allow the lenders to influence debtors’ domestic and foreign policies. Even if these terms were unenforceable in court, the mix of confidentiality, seniority, and policy influence could limit the sovereign debtor’s crisis management options and complicate debt renegotiation. Overall, the contracts use creative design to manage credit risks and overcome enforcement hurdles, presenting China as a muscular and commercially-savvy lender to the developing world.

For a fascinating and illuminating on-the-ground consideration of these issues, see/hear Mary Kay Magistad‘s On China’s New Silk Road.

* Victor Hugo

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As we redesign debt, we might send thoughtful birthday greetings to Jean-Jacques Laffont; he was born on this date in 1947. An economist, he made pioneering contributions in public economics, development economics, and the theory of imperfect information, incentives, and regulation. Over the course of his career, he wrote 17 books and more than 200 articles. His 1993 book A Theory of Incentives in Procurement and Regulation, written with Jean Tirole, is a fundamental reference in the economics of the public sector and the theory of regulation. Laffont died in 2004; had he lived, he might well have shared the 2014 Nobel Prize for Economics awarded to his colleague and collaborator Jean Tirole for the work they did together.

He was uninvolved in the Paris Club; indeed, his last book, Regulation and Development, discussed policies for improving the economies of less developed countries in ways more consistent with the UN’s new framework than the IMF’s old-but-still-dominant playbook.

source

- Chokepoints, Corridors, and Pakistan: Regional Conflict & the Politics of Connectivity

#GeoEconomics #GeoEconomicWar #EconomicCorridors #BRI #IMEC #MiddleEast #Strait_of_Hormuz #PersianGulf #ArabianSea #Connectivity #Pakistan #EmergingWorldOrder

https://www.wgi.world/chokepoints-corridors-and-pakistan-regional-conflict-the-politics-of-connectivity/

“Standard trade models underestimate the impact because they miss the bottleneck mechanism: energy disruptions cascade through chemicals and fertilizer production into food prices, amplifying losses for the world’s poorest countries.”

Kiel Policy Brief #KielInstitute

Authors Hinz J. Mahlkow H. Sogalla R. Willmann G.

#EnergySecurity #FoodPrices #Geoeconomics
Emerging Markets & Developing Countries

International Trade

https://bsky.app/profile/chadbourn.bsky.social/post/3mhuu2ta2ds2e

- Global Connectivity in Crisis: The Hidden Geo-Economic War in the Middle East

#GeoEconomics #Geopolitics #MiddleEast #EconomicCorridors #BRI #IMEC #GlobalConnectivity #GeoEconomicWar #NewTradeOrder

https://globalconnectivities.com/2026/03/geo-economic-war

“The metaphors we use deliver us hope, or they foreclose possibility”*…

It feels only too clear that the global order that defined geopolitics, geoeconomics, and life in the world’s constituent parts is changing fundamentally. But what lies on the other side of this change? It’s a sucker’s bet to try to predict that outcome with any precision; there’s just too much fundamental uncertainty. As Antonio Gramsci said (of another era, though he might have been describing ours): “The old world is dying, and the new world struggles to be born: now is the time of monsters.”

Still, it’s important that we try. It’s only by wrestling with what’s going on to determine what’s possible, then what’s desirable, that we can shape a future in which we want to live.

The models and metaphors that we use are key to that wrestling. Our natural inclinations seem to tend in one of two directions. Either we tweak the models we have to try to accomodate the change that we see… which seems to work until (given that the change just keeps on coming) it doesn’t. Or we flip to the opposite– we imaging that everything simply falls apart. In geopolitical/geoeconomic terms, we assume that we get an incrementally-revised version of the world order that we’ve known; or we imagine dissolution (into what tends to be called a “multi-polar” world)… neither of which imagines materially different world orders that, as hard as they are to describe, are entirely plausible. Part of our problem in visualizing those new orders is our lack of models and metaphors for them…

The two pieces featured here posit frameworks and metaphors that, while they may or may not prove to be “accurate” in any comprehensive way, can help us open our thinking, and model the ways in which fresh metaphors can help us see problems anew and find new solutions.

First a piece from Trine Flockhart, from the Global (Dis)Order International Policy Programme of the British Academy and The Carnegoe Endowment for International Peace, part of a recent book)…

Is global order a thing of the past? Is the liberal international order fraying and what is
happening to previously stable alliances and cooperative relationships such as the
transatlantic relationship or the relationship between the United States and Canada? Not
such a long time ago, these questions would have been regarded as alarmist, but today the
prospect of large-scale order transformation is part and parcel of daily debates. This rupture
is probably as important as the transformation that followed the end of the Second World War,
and together with the simultaneous transformations in technology and science, the impact
on people and societies may well be on par with the Industrial Revolution. As Gramsci wrote
from his prison cell, we live ‘in times of monsters’ where ‘the old world is dying and the new one
struggles to be born’(Gramsci & Buttigieg 1992). In these circumstances, we see the political
consequences in populist parties as voters seek certainty in an uncertain and turbulent world,
whilst policymakers struggle to find their feet in the emerging world and seek to manage the
fallout from the ending of the old world.

To ensure that the policy decisions of today are relevant for the geopolitical reality of tomorrow,
policymakers must have a clear sense about the likely outcome of the ongoing transformation
– in other words what kind of global order will be in place and what kind of relationships can
be expected within it? These are big and complex questions that have no easy answers, yet
many scholars and policy practitioners seem to already have their answer – the world will be
multipolar (Ashford 2023; Bekkevold 2023; Borrell 2021). At least anecdotally, it seems there
is widespread agreement that the international system is transforming from a unipolar system
anchored in American hegemony, to a multipolar system reflecting the shift of power to a larger
number of states. However, although the idea that the international system will be multipolar
is persuasive, and although the use of analytical concepts such as polarity can be useful for
gaining an overview of complex matters, we must be aware that polarity as a concept rests on
a specific form of analysis that tends to emphasize states, sameness, power and interest, and
which is only partially sighted when it comes to values, identities, lesser powers and complexity.
I worry that the focus on multipolarity, means that policymakers are trying to understand the
current order transformation through conceptual lenses that are blurred and not very relevant.

This article presents a different position. It starts from the counterintuitive position that
it is logically implausible for the global ordering architecture to return to an international
system that was in place a century ago. Those suggesting that we are currently witnessing
a return to multipolarity emphasise shifts in the global distribution of power and the rising
number of powerful states, most notably China. These are certainly important changes, but
The arrival of the multi-order world and its geopolitical implications
other important changes are overlooked, which suggest a fundamentally different global
ordering architecture is in the making. Continuing to portray the world as multipolar belies the
complexity, significance, and extent of many other important changes. This paper presents an
alternative interpretation of the ongoing global order transformation, demonstrating why it will
be neither bipolar nor multipolar but rather multi-order.

A multi-order world is a global ordering architecture consisting of several international orders.
Gramsci was right that order transformations take time, so the multi-order architecture is still
in development, but can be glimpsed through the existence of three independent international
orders already clearly visible within the global ordering architecture – the American-led liberal
international order (albeit that American leadership under Trump is currently in question),
the Russian-led Eurasian order, and the Chinese-led Belt and Road order.1 Other orders and
other forms of relationships of importance are also in the making suggesting a more complex
architecture than a multipolar one. The paper does not claim to present a full picture of the
emerging ordering architecture but seeks merely to demonstrate the importance of embracing
new thinking to contemplate the possibility of an entirely new form of international system
in which multiple international orders with very different dynamics and different behavioural
patterns make up the global ordering architecture. The perspective brings into light important
relationships and dynamics that are not readily apparent in the multipolar perspective –
especially that relationships within orders are just as important as relations between different
international orders, and it leaves room for considering other aspects than powershifts and for
acknowledging the importance of other actors than just a handful of “pole states”. I argue that
awareness of the subtle differences between the multi-order architecture and more traditional
polarity-based understandings is an essential first step towards timely strategic policymaking
fit for the multi-order world.

The paper proceeds in four moves. First, I outline three significant events over the past four
years which only partially fit the polarity-based narrative. Second, I outline the multi-order
perspective by focusing on order as a condition, a social domain, and as practices of ordering.
Thirdly, I show how changes in three characteristics of the global system indicate a multi-order
world rather than a multipolar one. Finally, I briefly consider some of the broader geopolitical
implications of a multi-order world and demonstrate the importance of ordering dynamics
within and between international orders. The picture that emerges challenges some of the
most foundational assumptions about international relations and global order including the
prospect of achieving convergence around common rules in multilateral governance to meet
shared challenges…

– “The arrival of the multi-order world and its geopolitical implications”

The second, by Jessica Burbank, takes a different– and in some ways, more provocative– tack…

… A new world order is here. States (countries) are no longer the highest form of power globally. Power has shifted to wealthy individuals who work in groups and operate across borders: syndicates of capital.

Syndicates of capital cannot be categorized as legal or illegal. They exist primarily in the extralegal sphere, where either no regulations apply to their behavior or, where laws do exist, there is no entity powerful enough to enforce them in a manner that asserts control over the syndicates’ behavior.

In many occasions, capital is both the power source for syndicates, and the shared goal. Wealthy individuals form syndicates if their strategic objectives align. Those objectives typically revolve around securing new capital flows and preserving existing ones. Syndicates’ power is vast but fragile. If all members of a syndicate were cut off from accessing capital and the resources they control, they would lose their power.

Author’s Note: ​​Sorry to disappoint the conspiracy theorists, but I am not speaking of secret societies, the illuminati, or a cabal. Syndicates of capital do not hide their power, nor do they operate in secret. Their multi-billion dollar deals and contracts are publicly disclosed. They are also not united in ethnic background, religious, or political beliefs.

It is not enough to say: ‘democracies are being replaced with oligarchies because wealthy individuals have too much power in society.’ That may be true, but is not the full picture. Oligarchies are states run by a small group of wealthy individuals. That may accurately describe the politics of one nation, but it does not suffice to describe how power is organized on a global scale.

‘Global oligarchy’ also falls short of describing how power is organized in our world, because there is not one small group of wealthy individuals, there are many, and they compete. Still, the identification of oligarchs is useful for global political analysis because many of the oligarchs within a state also operate globally as leaders or members ofsyndicates of capital.

The new world order emerged before it could be identified. Platitudes like: “our world has gone crazy,” served as an emotional crutch, and an implicit acknowledgement that we lack a sound analysis of contemporary global power. What has felt like an ineffable force, an inexplicable undercurrent of darkness, is the ambiance of global dominion by syndicates of capital.

Though abstract, examining how global power is organized is essential to understanding the world we live in. Developing a coherent framework for evaluating global affairs allows us to more effortlessly make sense of current events. You’ll be surprised how quickly things click and how easily your mind makes connections when you absorb the news with a conception of syndicates of capital…

– “Syndicates of Capital“

Both are eminently worth reading in full: whether or not one buys all– or any– of either set of conclusions, the mental calisthenics are the point…

* Robert Macfarlane

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As we muse on metaphors, we might recall that it was on this date in 1279 that Mongol forces led by Kublai Khan were victorious at the Battle of Yamen— ending the Song dynasty in China. Kublai has already conquered parts of northern and southern China, and had declared the Yuan dynasty (with himself as the emperor “Great Yuan”). With the fall of the Song, the Mongols ruled all of continental East Asia under Han-style Yuan rule, which was a division of the Mongol Empire.