While geopolitical conflict has unfortunately taken centre-stage, it is in fact debt and climate that is among the most pressing challenges facing humanity. It is indeed not how future wars will be financed that should be the main focus, but how existing international law and multilateral institutions can be used, and augmented to evolve a global strategy to deal with the existential threat of climate change – and related ‘Pandemicene’ phenomenon – and dealing with an evolving global debt crisis, especially in developing countries.

In this regard, an April 2025 Project Syndicate (PS) published article ‘Climate action requires debt relief’ pointed out: ’In February, the IMF estimated that nearly half of the lowest-income countries were at risk of debt distress, at which point they may no longer be able to meet their debt obligations.

That number is expected to rise as conditions continue to deteriorate. Compounding the crisis, the world’s poorest countries – especially small island developing states – are highly vulnerable to climate change and biodiversity loss.

Extreme weather events like hurricanes, droughts, and floods can wipe out critical infrastructure and cripple agricultural production in an instant, while slower-onset changes like rising temperatures and shifting rainfall patterns require continuous and costly adaptation measures. The debt and climate crises are closely intertwined.’

Debt distress, and climate change crisis require counter-cyclical policies, while what is being prescribed under the International Monetary Fund (IMF) austerity-based programmes is squeezing aggregate demand through raising policy rate, and cutting expenditure, where what gets slashed is mostly the very expenditure needed to reach Sustainable Development Goals (SDGs) targets, climate related expenditures, and lack of revenues due to overall lack of economic growth, and lack of political will to go for meaningful broadening of tax base.

Moreover, lack of economic institutional quality and very........

© Business Recorder