Rethinking Development Finance in a Geoeconomic World Order
Advocates for ideas and draws conclusions based on the interpretation of facts and data.
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
The recent annual IMF-World Bank Spring Meetings convened the world's leading economists and policymakers in Washington, D.C. What was once regarded as a vital forum to discuss global economic projections and future planning, was overcome by a profound sense of trepidation this year.
As of 2025, the annual financing gap for achieving the sustainable development goals (SDGs) stands at $4.2 trillion. But amid escalating trade wars, adversarial geoeconomics, and market uncertainty, one crucial argument remains overlooked: the path forward demands confronting the root causes of a broken system.
Under the theme "Jobs, the path to prosperity," the gathering in Washington appeared to revert back to outdated macroeconomic models rather than addressing the structural challenges facing low-to-middle income countries (LMICs).
In Africa alone, external debt levels increased by a staggering 240 percent between 2008-2022. By 2023, the debt burdens of LMICs reached an unprecedented $8.8 trillion, forcing more than 12 states to default on payments while plunging 30 of the world's poorest countries into "debt distress."
The International Monetary Fund (IMF) building sign is viewed in Washington, D.C.
The International Monetary Fund (IMF) building sign is viewed in Washington, D.C.
KAREN BLEIER/AFP via Getty Images
Recommendations from leading international financial institutions (IFIs) must go beyond the fiscal levers of austerity and deregulation if we are to pursue the "path to prosperity." Especially when considering that over 3.3 billion people (approximately 40 percent of the global population) live in countries where more is spent on interest payments than on basic services like education or health care.
Over the past three months, the global economic order has faced a moment of reckoning. With a new series of market shocks and tariffs, LMICs have yet again, and through no fault of their own, been left to foot the bill.
From a deepening debt crisis to building economic resilience, the existing financial architecture has failed developing economies.
Development Finance in a Geoeconomic World Order
As the world continues to grapple with the impact of slashed overseas development budgets, the simple truth is that aid alone will not suffice. Even if wealthier states commit to the 0.7 percent of gross national income (GNI) target toward official development assistance (ODA), we will still need to break the vicious debt-cycle and create breathing room for longer-term investments that tackle development challenges. By lowering the cost of borrowing, emerging economies can confront core issues like reducing inequality while enhancing the quality of basic services like education, energy, and health care.
Multilateral development banks (MDBs) will also need to dramatically scale up their financial capacity. By implementing an improved G20 Capital Adequacy Framework, deploying blended capital instruments, and reallocating $100 billion from G20 countries' IMF Special Drawing Rights (SDRs)—MDBs could mobilize at least $300 billion annually in affordable financing by 2030.
The entire global financial ecosystem must also deliver on the landmark $100 billion pledge to provide the poorest countries with concessional loans under The International Development Association (IDA).
The list goes on when it comes to possible solutions, from debt swaps to emergency pause clauses and concessional loans. There is need to adapt metrics and analytical tools to better reflect the structural hurdles of developing countries but also their potential.
Ultimately, the challenge lies in overcoming institutional rigidity to mobilize the vast potential of the multilateral system to bridge crucial financing gaps. As evidenced by the outcomes of the recent ECOSOC Forum on Financing for Development in April, systemic reform will be the defining factor.
The Path Forward: Translating Commitments to Action
This year, the IMF's latest World Economic Outlook delivered a sobering assessment, where global growth projections dropped by 0.5 percentage points. As world leaders contend with a new geoeconomic order, countries will need to compete not only for territory or political influence but for market access and financial stability. And so, the world simply can no longer afford to lose sight of development finance, especially at a time when it could not be more vital.
In June, world leaders and financial institutions will have an opportunity to translate commitments into decisive action at the landmark 4th International Conference on Financing for Development in Sevilla, Spain. Preparatory Committee Sessions in New York are already laying the groundwork for what could be a renewed financing framework for sustainable development.
This conference is not about politicizing aid and development, but rather about recognizing what is at stake for everyone. History has repeatedly shown us how extreme poverty and deepening inequalities in lower-income countries can escalate into full blown security crises.
While leaders navigate a changing world order, confronting the development crisis must go beyond rhetoric and address the structural drivers of global inequality. Innovative solutions go far beyond principles of effective multilateralism, they are a necessity for its evolution and more importantly—its survival.
María Fernanda Espinosa, former president of the 73rd U.N. General Assembly and Ecuador's minister of foreign affairs and national defense, now leads GWL Voices as executive director. With over 30 years in academia and international diplomacy, Espinosa is a recognized authority on global governance.
The views expressed in this article are the writer's own.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Newsweek
an hour ago
- Newsweek
Gen Z Doesn't Seem To Care About Protesting Against Trump
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. "Where the f*** is Gen Z?" asked TikTok creator @djangita in a video, which has at the time of reporting been viewed 2.3 million times, filmed at a protest in April. Since the reelection of President Donald Trump, thousands of people have turned out at protests across the country, including the "Not My Presidents Day" demonstrations in February, "Hands Off!" protests in April and "May Day" protests last month. And while protest movements have historically been driven by young people, the crowds at these protests seem noticeably older. So, where is Gen Z? Has the generation committed to a life of tradwives and the manosphere, leaving activism behind? Are they simply disenfranchised? Or has activism taken on a new meaning for a generation raised on tech? Newsweek spoke with experts to find out more. Photo-illustration by Newsweek/Getty Where Is Gen Z, politically? Looking at the perceived absence of Gen Z from the protest scene, the easy conclusion to make is they're not protesting Trump because they support him. The reality is a bit more complicated. As with much of American politics, where Gen Z sits politically is in a state of sharp polarization. Trump has had a significant amount of support from young men, having secured 55 percent of the vote from men aged 18 to 29 in 2024. There is, though, a wide gender gap in this age group, with 61 percent of women from the same demographic having voted for Vice President Kamala Harris. As of late April 2025, though, polling found that Trump's support among Gen Z had tailed off since the election, with 37 percent approving of him and 58 percent disapproving. Shifting Protest Culture It's not that young people are completely absent from political protests. "Young people's participation in major protests on issues like gun violence after the Parkland school shooting in 2018, racial justice after the George Floyd murder in 2020 and the Israel-Palestine conflict in the past two years have been a major feature of this generation's political engagement," Alberto Medina, communications team lead at the Center for Information & Research on Civic Learning and Engagement (CIRCLE), told Newsweek via email. But there's been a recent shift, and the image of an angry young person at a protest could now be relegated to the historical archives. "At the hands-off rally, there was a very clear demographic representation that excluded younger people," Dana Fisher, director of the Center for Environment, Community & Equity and a professor at America University, told Newsweek, adding that young people are "just not turning up at these mainstream protest events." As for why, Fisher said: "Young people are feeling really frustrated with the political process. They're feeling really frustrated with the two-party system in America, and they have lost confidence in the notion that democracy in America can work for them." She recounted an interaction with a young student in her research team who put it bluntly, telling her: "Young people have given up on democracy in America." And young people's relationship with activism is changing, too. Newsweek spoke with Amanda Litman, co-founder and president of Run for Something, about this. "We have to consider that over the last year and a half, or last two years, when Gen Z has showed up to protest at college campuses in the last year in particular around what's happening in Gaza, they have been harangued, harassed, kicked out of school," Litman said. "They have faced incredible consequences. "I think the culture of protest, even in the last two years, has changed drastically." The current conflict between Israel and Hamas began on October 7, 2023, when Hamas launched an attack on Israel in which about 1,200 people were killed and 251 taken hostage. Israel retaliated and Prime Minister Benjamin Netanyahu vowed to eradicate Hamas. The Gaza Health Ministry reports that at least 54,677 Palestinians have been killed since the conflict began, and there is a widespread humanitarian crisis in Gaza, with nearly all of the population having been displaced, according to the U.N. Students at universities across America have protested the conflict, with Columbia University becoming the epicenter of pro-Palestinian protests last spring. Protests have led to arrests, unrest and concerns have been raised about antisemitism. Commitment To Other Causes But just because Gen Z isn't out on the streets protesting Trump doesn't mean they're not out on the streets protesting. "A lot of young people who were engaged in all sorts of activism [are] shifting their focus to Gaza in the past year, year and a half since the violence broke out," Fisher told Newsweek. Newsweek spoke with Hatem Abudayyeh, national chair of the U.S. Palestinian Community Network (USPCN) about Gen Z presence at pro-Palestine protests. "We're still organizing protests every single week, and we still have a lot of college students, and even high-school-age students, Gen Z kids, who are coming to those," he said. "College-age young people and campus organizers and activists have been a part of all the social justice movements in the United States for decades." Pointing to the encampments and college protests, he said: "That clearly was something that not only the Palestine Support Movement had not seen in the United States before, but none of the social justice movements had seen [it] in the U.S. before since probably the Vietnam War era," and described Israel vs. Palestinians as "the Vietnam War issue of this era." New Era Of Activism It seems that activism, and political engagement itself, is changing significantly for young people. "It's evolving," Litman said. "Not all activism is flashy. It doesn't always make for a compelling video or photo. That doesn't mean it doesn't work." "In the first Trump administration, protesting was one of the primary ways that people showed their anger at Trump. And that was good for that moment. But we also saw the limits of that as a tactic. Gen Z is thinking about different ways that they can make their voice heard. "We're seeing young people be really intentional about the ways in which they can move the needle," Litman added, pointing to consumer activism and social media activism and highlighting that Trump cares about the latter. Medina told Newsweek:"Engagement online can serve as an entry point for youth to learn about and find opportunities to engage in issue advocacy or other forms of political participation. The key is ensuring that those opportunities are available and accessible to young people, that the structures and support systems are in place for youth to get involved and find political homes. "Young people are looking for opportunities to learn, to be heard and to have an impact on issues they care about. That process can begin with a post on social media but requires more sustained support that can empower youth to do more than be passive consumers of political ads or information." And beyond the discourse online or on the streets protesting, Litman highlighted one thing young people are clearly thinking about: running for office, she said. "Run for Something has had nearly 50,000 young people raise their hands to say they want to run for office in the last seven months," she said. "We've had more people raise their hands since the election than we did in the first three years of Trump's first term."
Newsweek
an hour ago
- Newsweek
Map Shows Where Homebuyers Can Still Buy Homes for Under $300K
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. While a majority of U.S. homebuyers are facing sky-high prices and historically elevated mortgage rates, there are places across the country where it is still possible to find a home for under $300,000, according to recent data shared by Why It Matters The median sale price of a typical home in the United States before the COVID-19 pandemic was under $300,000, but has since climbed to well above $400,000. In April, the latest data available from Redfin, the typical U.S. home would cost buyers a median price of $437,864, up 1.3 percent from a year earlier. Historically elevated mortgage rates and skyrocketing prices—a consequence of the pandemic-driven homebuying frenzy, as well as the chronic shortage of homes that has plagued the U.S. market for years—have pushed many Americans to the sidelines, hurting first-time homebuyers the most. According to the National Association of Realtors (NAR), the U.S. market needs 367,000 more home listings at a maximum price of $170,000, 416,000 more priced at or below $255,000 and 364,000 more priced under $340,000 to fix the existing affordability gap. However, if you know where to look, there are still pockets of the market where buying a home can be more affordable, especially in areas where inventory is rising the most. What To Know The most affordable cities in the country are concentrated in the Midwest and the South, according to the company's report. Several major cities, including Detroit, St. Louis, Memphis, Baltimore, Indianapolis, and Pittsburgh, enter the 145-city-strong list of places where a typical home costs $300,000 or less. Among the biggest cities with the most affordable home prices are: Detroit, MI ($109,000) Birmingham, AL ($181,500) St. Louis, MO ($199,999) Memphis, TN ($218,200) Baltimore, MD ($249,900) Lubbock, TX ($249,975) Indianapolis, IN ($268,500) Pittsburgh, PA ($274,900) Decatur, GA ($279,000) Kansas City, MO ($281,250) Oklahoma City, OK ($285,855) Louisville, KY ($289,900) Tulsa, OK ($289,900) Baton Rouge, LA ($289,945) Philadelphia, PA ($289,999) El Paso, TX ($295,000) Columbus, OH ($295,900) Clearwater, FL ($299,250) Jacksonville, FL ($299,900) Myrtle Beach, SC ($299,900) Ocala, FL ($299,999) San Antonio, TX ($300,000) Some of these cities have experienced a rapid home value appreciation during the pandemic, and even as prices remain relatively low compared to the national average of more expensive metros, they may still be unaffordable for locals. According to a monthly payment for a 30-year fixed loan at 6.8 percent on a Detroit home, with a median list price of $109,000, would cost a homebuyer roughly $762 a month "after taxes, insurance, and interest, and with a 20 percent down payment of $21,800," the company wrote. While affordability is rare on the East Coast, with the Northeast still experiencing acute housing shortages, homebuyers can find homes under $300,000 in cities such as Philadelphia, Pittsburgh, and Baltimore. What People Are Saying Hannah Jones, senior economic research analyst at said: "The majority of these cities are in the South or Midwest. These regions tend to offer more affordable homes as they have generally more space to grow and lower demand than a high-density city (such as New York or Boston)." Of the affordable cities on the East Coast, she said: "Some of these cities, such as Detroit or Baltimore, have gone through challenging periods. However, recent investment and growth have put them back on the map as appealing, affordable places to put down roots." What Happens Next While homeowners continue to struggle with high mortgage rates and rising housing costs, recent trends in the U.S. housing market suggest that the rapid growth in home prices that has characterized the last five years is slowing, and may even be reversing. The number of homes for sale in the U.S. is now near pre-pandemic levels, while in some parts of the country, especially in Southern states like Texas and Florida, which have built the most new homes over the past few years, they are even higher. Most importantly, much of this rising inventory is sitting idle on the market because buyers just cannot afford it or think it is worth waiting to see how things might turn out in a few months. The result is that sellers, who now outnumber buyers by an estimated 500,000, according to Redfin, are increasingly being forced to lower their asking prices to attract reluctant buyers. This downward pressure on prices could finally turn the U.S. housing market solidly in favor of buyers, although stubbornly high mortgage rates and other rising housing costs might stop them from fully enjoying this change.
Newsweek
10 hours ago
- Newsweek
Protesters Clash With Police for Second Day Amid Ongoing LA ICE Raids
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Federal immigration enforcement operations have triggered protests across California for the second consecutive day, as U.S. Immigration and Customs Enforcement (ICE) conducted raids in Paramount on Saturday morning following similar operations across multiple Los Angeles locations on Friday. Large groups of protesters quickly assembled near raid sites on both days, leading to traffic disruptions and escalating tensions with federal authorities. Newsweek reached out to the Los Angeles County Sheriff's Department via email on Saturday for comment. Why It Matters These protests represent the most significant resistance to federal immigration enforcement since President Donald Trump's return to office in January. The clashes highlight deepening conflicts between sanctuary jurisdictions and federal immigration policy, as Trump has implemented sweeping changes through executive orders and utilized the wartime Alien Enemies Act of 1798 to expand deportation authority under border czar Tom Homan's leadership. Los Angeles County maintains sanctuary policies, with local law enforcement refusing to participate in civil immigration enforcement. The current federal operations signal an escalation in immigration enforcement activities, while similar protests have spread to New York and Chicago, suggesting potential for broader resistance nationwide. Demonstrators shout and film at police during a protest in the Paramount section of Los Angeles on June 7 after federal immigration authorities conducted operations. Demonstrators shout and film at police during a protest in the Paramount section of Los Angeles on June 7 after federal immigration authorities conducted operations. AP Photo/Eric Thayer What To Know The Los Angeles County Sheriff's Department confirmed to KTLA News that around 11 a.m. on Saturday, deputies were dispatched to the 6400 block of Alondra Boulevard in Paramount on reports of protesters blocking traffic. Demonstrations continued for hours with protesters throwing projectiles and lighting a pallet on fire in the middle of the road, while sheriff's deputies attempted crowd control as air units circled overhead. At least 44 people were arrested during the protests on Friday, according to Reuters, during which officers used pepper spray and tear gas on hundreds of protesters outside federal buildings. ICE operations resulted in the detention of David Huerta, a labor leader who was arrested for allegedly obstructing federal agents by blocking their vehicle. Federal authorities emphasize they're targeting individuals with criminal histories including gang members, drug traffickers, and those with records of assault, domestic violence, and robbery. The Los Angeles Police Department (LAPD) declared an unlawful assembly near Alameda and Temple streets after reports that protesters threw concrete pieces at officers, authorizing less-lethal munitions and initiating a citywide tactical alert. Acting ICE Director Todd Lyons alleged that over 1,000 protesters surrounded and attacked a federal building, claiming it took more than two hours for LAPD to respond to federal officers' calls for assistance. The Los Angeles County Sheriff's Department emphasized they responded solely for crowd and traffic control, maintaining their non-participation policy in immigration enforcement activities. Law enforcement stand during a protest in the Paramount section of Los Angeles on June 7 after federal immigration authorities conducted operations. Law enforcement stand during a protest in the Paramount section of Los Angeles on June 7 after federal immigration authorities conducted operations. AP Photo/Eric Thayer What People Are Saying Department of Homeland Security Secretary Kristi Noem wrote on X, formerly Twitter on Saturday: "A message to the LA rioters: you will not stop us or slow us down. [ICE] will continue to enforce the law. And if you lay a hand on a law enforcement officer, you will be prosecuted to the fullest extent of the law." ICE Acting Director Todd Lyons said on Saturday in part: "These violent rioters will be held accountable if they harm federal officers, and make no mistake, ICE will continue to enforce our nation's immigration laws and arrest criminal illegal aliens. Sanctuary politicians would do well to remember that impeding our efforts only endangers their communities, law enforcement officers, and the detainees they claim to support." Immigrant Defenders Law Center (ImmDef) President and CEO Lindsay Toczylowski in a statement: "As attorneys, we are disgusted by DHS' blatant betrayal of basic human dignity as we witness hundreds of people held in deplorable conditions without food, water, or beds for 12+ hours. People targeted by ICE are being denied access to attorneys and family visitation, but they're not the only ones - our own members of Congress are being denied access to conduct their oversight duties. DHS is not above the law, but right now they are treating federal facilities like islands of lawlessness within our city. This is an urgent moment for our country to wake up to the terror ICE is inflicting on communities and take action." Department of Homeland Security Assistant Secretary Tricia McLaughlin in a statement: "The violent targeting of law enforcement in Los Angeles by lawless rioters is despicable and Mayor Bass and Governor Newsom must call for it to end. The men and women of ICE put their lives on the line to protect and defend the lives of American citizens. Make no mistake, Democrat politicians like Hakeem Jeffries, Mayor Wu of Boston, Tim Walz, and Mayor Bass of Los Angeles are contributing to the surge in assaults of our ICE officers through their repeated vilification and demonization of ICE. From comparisons to the modern-day Nazi gestapo to glorifying rioters, the violent rhetoric of these sanctuary politicians is beyond the pale. This violence against ICE must end." U.S. Attorney Bill Essayli for the Central District of California on X: "Let me be clear: I don't care who you are—if you impede federal agents, you will be arrested and prosecuted. No one has the right to assault, obstruct, or interfere with federal authorities carrying out their duties." A protester throws a rock amidst tear gas from law enforcement during a demonstration after federal immigration authorities conducted operations on, June 7 in the Paramount section of Los Angeles. A protester throws a rock amidst tear gas from law enforcement during a demonstration after federal immigration authorities conducted operations on, June 7 in the Paramount section of Los Angeles. AP Photo/Eric Thayer What Happens Next Federal authorities have indicated that investigations into assaults on law enforcement during the Los Angeles protests are ongoing, with FBI Deputy Director Dan Bongino stating authorities are "thoroughly reviewing the evidence" and working with the U.S. Attorney's Office to prosecute perpetrators. Advocacy groups continue demanding accountability from federal agencies amid calls for the release of detained protesters and reviews of ICE's enforcement tactics.
