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The experts laid out various policies they argued are "required to prevent avoidable deaths, stabilize a sanctioned economy, and allow Venezuelans to rebuild with dignity."
With at least 3,535 people dead, 16,740 injured, and tens of thousands still missing after a pair of major earthquakes hit Venezuela last month, over 100 economists and scholars on Tuesday jointly called for "immediate action to unfetter Venezuela's humanitarian response and reconstruction from ongoing economic and financial sanctions, asset freezes, and onerous debt burdens."
Such demands began to emerge shortly after the 7.2- and 7.5-magnitude quakes, both centered in Yaracuy, on June 24. The new letter, shared with Common Dreams by the Center for Economic and Policy Research, follows a similar message sent to President Donald Trump and Secretary of State Marco Rubio last week by CEPR, Just Foreign Policy, Latin America Working Group, Venezuelan American Community Action, Peace Action, the Quincy Institute for Responsible Statecraft, and a dozen other organizations.
The academics and economists, including several experts at CEPR as well as James Galbraith, Jayati Ghosh, Jason Hickel, Ann Pettifor, Jeffrey Sachs, Robert Wade, and Isabella Weber, highlighted that "Venezuela enters this disaster after years of unilateral coercive measures, financial sanctions, and export controls that have damaged its economy and infrastructure."
That includes decades of US sanctions. On top of those economic moves, Trump earlier this year sent troops into Venezuela to abduct President Nicolás Maduro, then took control of the South American country's nationalized oil industry. The New York Times reported earlier this week that the Trump administration has seized at least $8 billion worth of Venezuela's oil wealth this year.
In a Tuesday piece for Just Security, a pair of experts who signed the new letter—George Lopez, professor emeritus of peace studies at the University of Notre Dame, and Venezuelan economist and CEPR senior Research Fellow Francisco Rodríguez—noted that post-earthquakes, "the United States pledged $300 million to relief agencies, mobilized civilian and military teams to Venezuela that are trained on disaster relief, and issued a limited sanctions waiver for earthquake relief activities.
"But these measures are far from enough," they stressed, explaining that "the United Nations estimates the losses from the quakes stand at $37 billion," or 32% of Venezuela's gross domestic product. They suggested that "the United States should spearhead a major reconstruction effort and lift all remaining sanctions on the Venezuelan economy."
The US was eager to take control in Venezuela earlier this year.Now that the country is facing devastating loss after twin earthquakes, the US should spearhead a major reconstruction effort and lift all remaining sanctions.From Francisco Rodríguez and George A. Lopez:
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— Just Security (@justsecurity.org) July 7, 2026 at 9:06 AM
The broader group argued that "whatever one's position on Venezuela's internal politics, the current set of coercive economic measures directed at the country is an indiscriminate instrument. Sanctions on the central bank, public banking, oil industry, and debt transactions do not land surgically on officials; they incapacitate payment systems, raise import costs, block correspondent banking, freeze reserves, deter suppliers, and produce scarcity across an entire society. This is precisely the moment to remove any economic and financial obstacles to relief and reconstruction."
They called on the Trump administration specifically to lift all economic sanctions, "including any that may impact the Banco Central de Venezuela (BCV), government institutions, Petróleos de Venezuela, SA (PDVSA), public financial institutions, the oil and mining sectors, banking, transportation, shipping, telecommunications, travel, and all related activities," and to immediately issue "the Section 25B certification that is required to enable the BCV to receive, control, use, and transact through its accounts and assets at the Federal Reserve and US banks."
The experts also took aim at the United Kingdom and the Portuguese, calling on the governments to respectively work with "the Bank of England to ensure the immediate unfreezing of the BCV's gold reserves, worth about $5 billion and representing a third of the central bank's reported assets," as well as with Novo Banco, "to return $1.2 billion belonging to Venezuela's development bank, BANDES, and PDVSA affiliates, as set out in a 2023 court decision."
They further pressured the International Monetary Fund (IMF) to "ensure that Venezuela has full access to its approximately $5 billion in special drawing rights (SDRs) for emergency stabilization and imports," and to approve a $4 billion rapid financing instrument (RFI) disbursement immediately, using its emergency and natural disaster rationale, with no conditions."
Beyond those specific recommendations, the economists and scholars urged "a coordinated debt jubilee for Venezuela," writing that "all official bilateral creditors, multilateral creditors to the extent legally possible, and public agencies holding claims should cancel or suspend debt service, interest, penalties, and arrears, and pursue a comprehensive debt reduction consistent with a rights-based recovery and climate-resilient reconstruction."
"A new fund should be established—perhaps financed by the IMF's Resilience and Sustainability Trust (RST)—to repurchase distressed debt from the secondary market, with legal protections against holdout litigation and asset seizures," they proposed. "Money owed to creditors cannot at the same time rebuild hospitals, schools, housing, water systems, and the grid. A debt crisis in these conditions is a developmental and humanitarian crisis."
"Venezuela's people must not be made to pay twice: first through disaster, and then through sanctions, frozen reserves, and unsustainable debt servicing," they concluded. "We urge governments, international financial institutions, and creditors to act now, on the principle that lives, public health, and economic recovery take precedence over coercion and collection. Emergency liquidity, full sanctions relief, SDR access, RFI financing, and debt cancellation are not acts of charity. They are the minimum policy response required to prevent avoidable deaths, stabilize a sanctioned economy, and allow Venezuelans to rebuild with dignity."
"Milei was already gifted a $42 billion lifeline from the US-controlled IMF and the World Bank," said one economics writer, "but even that was not enough to stabilize Milei's crazy Austrian School experiment."
In his first meeting with a foreign head of state after being reelected president last year, Donald Trump welcomed Argentina's far-right libertarian President Javier Milei to Mar-a-Lago.
At a lavish gala, Argentina's president slathered his host with compliments, describing Trump's return to office as the "greatest political comeback in history."
Before a crowd of onlookers, Trump would return the favor, telling Milei, "The job you’ve done is incredible. Make Argentina Great Again, you know, MAGA. He’s a MAGA person.”
On Monday, less than a year later, Milei arrived in New York for this week's meeting of the United Nations General Assembly, begging for help as Argentina's economy continues its freefall and reels from nearly two years of his radical economic austerity program.
Milei's fealty to Trump bore fruit. US Treasury Secretary Scott Bessent promised that the nation's financial department "stands ready to do what is needed within its mandate to support Argentina."
In what he described as an effort to tame Argentina's runaway inflation, Milei, who has described himself as an "anarcho capitalist," has spent the time since he was elected president in 2023 instituting a brutal regime of what has been referred to as economic "shock therapy."
His agenda has centered on taking a "chainsaw" to government institutions and worker protections: slashing energy and transportation subsidies, halting public infrastructure projects, declaring war on labor unions, freezing wage and pension increases, and firing tens of thousands of government employees.
The result was predictable: By February 2025, the country had begun to rapidly deindustrialize, unemployment was soaring, and more than half of Argentinians lived in poverty.
However, this did not stop Trump from modeling his economic agenda, often explicitly, after Milei's—most notably through the exploits of the chainsaw-brandishing billionaire Elon Musk's Department of Government Efficiency (DOGE), which he used to lay waste to the administrative state. Trump, meanwhile, has signed legislation gutting social services like Medicaid and food assistance, busted public unions, and canceled numerous green energy and infrastructure contracts.
The result has likewise been a slump in economic activity, culminating in unemployment numbers critics say the administration has been desperate to bury.
The US president has already intervened once to help soften Argentina's landing. As El País notes:
Thanks to Trump’s political support, the government agreed to a $20 billion bailout with the International Monetary Fund last April—to which the country still owes another $40 billion—and achieved a measure of calm, but it lasted barely three months.
Now, with Milei facing mass street protests against his budget cut proposals, a hostile legislature that routinely vetoes his agenda, and a weakening peso in the face of continued uncertainty, he has turned to the US for another bailout, which the US hopes will help ease the country's economic woes enough to stave off a thrashing for his party in the country's general legislative elections on October 26.
Referring to Argentina as a "systemically important US ally in Latin America," Bessent said that "all options for stabilization are on the table." This, he said, "may include, but [is] not limited to, swap lines, direct currency purchases, and purchases of US dollar-denominated government debt from Treasury’s Exchange Stabilization Fund."
Notably, Bessent continued to praise Milei's "support for fiscal discipline and pro-growth reforms." Despite its catastrophic effects, he described Milei's chainsaw agenda as "necessary to break Argentina’s long history of decline."
US Sen. Elizabeth Warren (D-Mass.) denounced the bailout as another favor from Trump to one of his political allies.
"First, Trump made us pay higher coffee and beef prices to support a convicted coup-plotter in Brazil," she said, referring to Trump's attempt to use harsh tariffs to pressure the Brazilian government into dropping charges against Jair Bolsonaro, who was ultimately convicted last week of attempting to overthrow the government. "Now, he wants American taxpayers to bail out his friend Milei in Argentina."
(Video: The Geopolitical Economy Report)
But as Benjamin Norton of the Geopolitical Economy Report argues, the motivation goes deeper than simply helping out a friend. It is an effort to save the reputation of "actually existing libertarianism" and the fortunes of US investors who've cast their lot with him.
"Milei was already gifted a $42 billion lifeline from the US-controlled IMF and the World Bank (after Argentina already owed more debt to the IMF than any other country), but even that was not enough to stabilize Milei's crazy Austrian School experiment," Norton said. "The US government is doing this not only to prop up one of its most loyal puppets in Latin America, but also in order to benefit wealthy US investors who hold Argentine stocks and bonds, and US corporations that want Argentina's lithium."
With Trump having modeled his oligarch-friendly economic agenda on Milei's, journalist Jacob Silverman—author of the forthcoming book Gilded Rage: Elon Musk and the Radicalization of Silicon Valley—argued that allowing the libertarian radical to twist in the wind is not an option for Trump.
"Javier Milei can't be allowed to fail," Silverman said, "because MAGA leaders and the tech right have propped him up as a true libertarian fighting the globalists and 'doing what needs to be done': Immiserating his people on behalf of private capital."
Under the influence of the neocons, Democrats and Republicans alike have marched America into one disaster after another, in a vain effort to defy the economic tides by which all great powers rise and fall. Trump and his team are no exception.
Not a day goes by without a new shock to Americans and our neighbors around the world from the Trump administration. On April 22nd, the International Monetary Fund (IMF) downgraded its forecasts for global growth in 2025, from 3.3% to 2.8%, and warned that no country will feel the pain more than the United States. Trump’s policies are expected to drag U.S. growth down from 2.7% to 1.8%.
It’s now clear to the whole world that China is the main target of Trump’s trade wars. The U.S. has slapped massive tariffs—up to 245%—on Chinese goods. China hit back with 125% tariffs of its own and refuses even to negotiate until U.S. tariffs are lifted.
Ever since President Obama announced a U.S. “pivot to Asia” in 2011, both U.S. political parties have seen China as the main global competitor, or even as a target for U.S. military force. China is now encircled by a staggering 100,000 U.S. military personnel in Japan, South Korea and Guam (plus 73,000 in Hawaii and 415,000 on the U.S. West coast) and enough nuclear and conventional weapons to completely destroy China, and the rest of us along with it.
To put the trade war between the U.S. and China in context, we need to take a step back and look at their relative economic strength and international trading relations with other countries. There are two ways to measure a country’s economy: nominal GDP (based only on currency exchange rates) and “purchasing power parity” (PPP), which adjusts for the real cost of goods and services. PPP is now the preferred method for economists at the IMF and OECD.
If the U.S. keeps trying to bully its way back to the top, we could all lose everything.
Measured by PPP, China overtook the U.S. as the largest economy in the world in 2016. Today, its economy is 33% larger than America’s—$40.7 trillion compared to $30.5 trillion.
And China isn’t alone. The U.S. is just 14.7% of the world economy, while China is 19.7%. The EU makes up another 14.1%, while India, Russia, Brazil, Japan, and the rest of the world account for the other 51.5%. The world is now multipolar, whether Washington likes it or not.
So when Malaysia’s trade minister Tengku Zafrul Aziz was asked whether he’d side with China or the U.S., his answer was clear: "We can’t choose—and we won’t." Trump would like to adopt President Bush’s “You’re either with us or with the terrorists” posture, but that makes no sense when China and the U.S. together account for only 34% of the global economy.
China saw this coming. As a result of Trump’s trade war with China during his first term in office, it turned to new markets across Asia, Africa, and Latin America through its Belt and Road Initiative. Southeast Asia is now China’s biggest export market. It no longer depends on American soybeans—it grows more of its own and buys most of the rest from Brazil, cutting the U.S. share of that market by half.
Meanwhile, many Americans cling to the idea that military power makes up for shrinking economic clout. Yes, the U.S. outspends the next ten militaries combined—but it hasn’t won a major war since 1945. From Vietnam to Iraq to Afghanistan, the U.S. has spent trillions, killed millions, and suffered humiliating defeats.
Today in Ukraine, Russia is grinding down U.S.-backed forces in a brutal war of attrition, producing more shells than the U.S. and its allies can at a fraction of our cost. The bloated, for-profit U.S. arms industry can’t keep up, and our trillion dollar military budget is crowding out new investments in education, healthcare, and civilian infrastructure on which our economic future depends.
None of this should be a surprise. Historian Paul Kennedy saw it coming in his 1987 classic The Rise and Fall of the Great Powers. Every dominant empire, from Spain to Britain to Russia, eventually confronted relative decline as the tides of economic history moved on and it had to find a new place in a world it no longer dominated. Military overextension and overspending always accelerated the fall.
“It has been a common dilemma facing previous ‘number one’ countries that even as their relative economic strength is ebbing, the growing foreign challenges to their position have compelled them to allocate more and more of their resources into the military sector, which in turn squeezes out productive investment…,” Kennedy wrote.
He found that no society remains permanently ahead of all others, but that the loss of empire is not the end of the road for former great powers, who can often find new, prosperous positions in a world they no longer dominate. Even the total destruction suffered by Germany and Japan in the Second World War, which ended their imperial ambitions, was also a new beginning, as they turned their considerable skills and resources from weapons development to peaceful civilian production, and soon produced the best cars and consumer electronics in the world.
Paul Kennedy reminded Americans that the decline in U.S. leadership “is relative not absolute, and is therefore perfectly natural; and that the only serious threat to the real interests of the United States can come from a failure to adjust sensibly to the newer world order…”
And that is exactly how our leaders have failed us. Instead of judiciously adapting to America’s relative decline and carving out a new place for the United States in the emerging multipolar world, they doubled down—on wars, on threats, on the fantasy of endless dominance. Under the influence of the neocons, Democrats and Republicans alike have marched America into one disaster after another, in a vain effort to defy the economic tides by which all great powers rise and fall.
Since 1987, against all the historical evidence, seven U.S. presidents, Democrats and Republicans, have blindly subscribed to the simplistic notion peddled by the neocons that the United States can halt or reverse the tides of economic history by the threat and use of military force.
Trump and his team are no exception. They know the old policies have failed. They know radically different policies are needed. Yet they keep playing from the same broken record—economic coercion, threats, wars, proxy wars, and now genocide—violating international law and exhausting the goodwill of our friends and neighbors around the world.
The stakes couldn’t be higher. It took the two most deadly and destructive wars in human history to put an end to the British Empire and the age of European colonialism. In a nuclear-armed world, another great-power war wouldn’t just be catastrophic—it would very likely be final. If the U.S. keeps trying to bully its way back to the top, we could all lose everything.
The future instead demands a peaceful transition to international cooperation in a multipolar world. This is not a question of politics, right or left, or of being pro- or anti-American. It’s about whether humanity has any future at all.
"The Milei government has picked a fight with workers and pensioners, and now they will feel the full force of organized labor," said one union leader.
Increasingly fed up with economic policies under which poverty and inflation have soared while vital social services, wages, and the peso have taken huge hits, disaffected Argentinians took to the streets of cities across the South American nation Wednesday for the third general strike of right-wing President Javier Milei's tumultuous 16-month presidency.
Led by the General Confederation of Labor (CGT)—an umbrella group of Argentinian unions—the "paro general," or general stoppage, drew workers, the unemployed, pensioners, educators, students, and others affected by Milei's severe austerity measures and his administration's plans for more deep cuts. Demonstrations continued throughout Thursday.
"In the face of intolerable social inequality and a government that ignores calls for better wages and a dignified standard of living for all, the workers are going on strike," CGT explained ahead of the action.
Airlines canceled hundreds of flights as air traffic controllers and other airport workers joined the strike; many schools, banks, and other offices shut down; and ports, some public transport, and other services ground to a halt.
"The only thing the administration has brought is a wave of layoffs across state agencies, higher poverty rates, and international debts, which are the biggest scam in Argentina's history," the Association of Airline Pilots (APA) said.
Rodolfo Aguiar, secretary general of the Association of State Workers (ATE), said Wednesday that "after this strike, they have to turn off the chainsaw; there's no room for more cuts," a reference to both Milei's ubiquitous campaign prop and his gutting of public programs upon which millions of Argentinians rely.
"Right now, the crisis Argentina is facing is worsening," Aguiar added, warning about government talks with the International Monetary Fund. "The rise in the dollar will quickly translate into food prices, and the new deal with the IMF is nothing more than more debt and more austerity measures."
Milei's government is nearing agreement on a $20 million IMF bailout, a deeply unpopular proposition in a country left reeling by the U.S.-dominated institution's missteps and intentional policies that benefit foreign investors while causing acute suffering for millions of everyday Argentinians. Argentina already owes $44 billion to the IMF.
"We already have experience as Argentinians that no agreement has been beneficial for the people," retiree and striker Rezo Mossetti told Agence France-Press in Buenos Aires Thursday, lamenting that his country keeps getting into "worse and worse" debt.
CGT decided to launch the general strike during a March 20 meeting that followed a pensioner-led March 12 protest outside the National Congress in Buenos Aires. After fringe elements including rowdy soccer fans known as "barrabravas" joined the protests and committed acts of violence and vandalism, police responded by attacking demonstrators with "less-lethal" weapons including water cannons and tear gas. A gas canister struck freelance photojournalist Pablo Grillo in the head, causing a severe brain injury that required urgent surgery.
This, after Argentinian Security Minister Patricia Bullrich invoked controversial measure empowering more aggressive use of force against protesters and rescinding a ban on police use of tear gas canisters. The Security Ministry also filed a criminal complaint dubiously accusing organizers of the March 12 protest of sedition.
Milei and his supporters have portrayed the general strike as a treasonous assault on the fragile Argentinian economy and those taking part in the day of action as lazy and jobless.
When Clarín, the country's largest newspaper, cited a study by the Argentine University of Enterprise claiming that the general strike would cost the national economy around $185 million per day, University of Buenos Aires professor Sergio Wischñevsky retorted: "Very revealing. It means that's the magnitude of the wealth workers produce every day. It's the best argument to stop ignoring workers."
As he has done with past protests against his rule, Milei has also framed the general strike as "an attack against the republic" and repeated his threat that police would "crack down" on demonstrators.
Orwellian use of state infrastructure by Milei's "anarcho-capitalist" gvmnt. in Argentina. As the 36 hr. general strike begins, signs & loudspeakers at train stations across Buenos Aires read: "Attack against the republic! The syndicalist caste punishes millions of Argentines who want to work."
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— Batallon Bakunin ( @batallonbakunin.bsky.social) April 10, 2025 at 4:11 AM
General strikers largely shrugged off the threats of police violence and state repression.
"The right to strike is a worker right and I think there has to be more strikes because the situation with this government is unsustainable," Hugo Velazuez, a 62-year-old worker striking in Buenos Aires, told Reuters.
While the Argentinian mainstream media's coverage of the general strike was largely muted, images posted by independent progressive media showed parts of central Buenos Aires appearing practically empty.
Workers around the world showed solidarity with striking Argentinians.
"The Milei government has picked a fight with workers and pensioners, and now they will feel the full force of organized labor," said Paddy Crumlin, president of the London-based International Transport Workers' Federation (ITF), which boasts nearly 20 million members in 677 unions in 149 nations. "The international trade union movement stands ready to fight back with our Argentine comrades. We will not rest until these attacks on workers' rights are defeated."
ITF noted that various sectors of Argentina's transportation sector "are under direct threat of privatization," including the national commercial airline, Aerolíneas Argentinas, the National Highway Board, and the Argentinian Merchant Marine.
Milei—a self-described anarcho-capitalist who was elected in November 2023 on a wave of populist revulsion at the status quo—campaigned on a platform of repairing the moribund economy, tackling inflation, reducing poverty, and dismantling the state. He made wild promises including dollarizing Argentina's economy and abolishing the central bank.
However, the realities of leading South America's second-largest economy have forced Milei's administration to abandon or significantly curtail key agenda items, leading to accusations of neoliberalism and betrayal from the right and hypocrisy and rank incompetence from the left. According to most polling, Milei's approval rating has fallen from net positive to negative in just a few months.
Particularly galling to many left-of-center Argentinians is Milei's cozying up to far-right figures around the world, especially U.S. President Donald Trump.
Andrew Kennis, a Rutgers University media studies professor specializing in Latin America, noted similarities between the protests in Argentina and anti-Trump demonstrations in the United States.
"It's no coincidence that 5.2 million people were in the streets in all 50 states just this past Saturday and that the U.S. is now catching up with the mass resistance that's long been going on in Argentina," Kennis told Common Dreams Thursday.
Kennis—who this week published a deep dive on Milei's "destructive chainsaw theory" in Common Dreams—added that in the cases of both Milei and Trump, "there was no real honeymoon period, as there almost always is" for most new presidencies.
"In both countries, people were in the streets pretty damned fast and furiously," he added.
Critics contend that Milei’s philosophy stops short of meaningful political and social reforms and claim his agenda prioritizes enlarging the power and wealth of corporations over expanding individual freedoms.
Flashback to a pivotal moment in global politics.
It was a crisp evening in December 2021 when Donald Trump stepped onto a gilded stage at the Conservative Political Action Conference (CPAC) in Orlando, Florida. The former president—reduced to a kingmaker, still without access to his Twitter account, and seething over his defeat in 2020, yet still nursing ambitions for a return—spoke to a raucous crowd about the need for a global “populist revival.”
Meanwhile, thousands of miles away, another showman was making his mark.
In Buenos Aires, Javier Milei, then a fiery congressman with a penchant for theatrics and unfiltered invective, was delivering his own bombastic address on live television. Clad in his signature leather jacket and gesturing wildly, Milei railed against the political elite, vowing to obliterate the “parasitic state” with his ever-present chainsaw prop.
As the world braced for this new era of racist and xenophobic leadership, the intertwined fates of Trump and Milei offered a potent lens through which to examine the volatility of contemporary politics.
For a brief moment, the right-wing populist figures seemed like ideological satellites orbiting the same disruptive axis. Trump, sidelined but scheming, watched as the conservative media anointed him the leader of an imagined international populist alliance. Milei, meanwhile, was steadily building a cult following in Argentina, his rise to power hastened by a corporate media landscape eager for controversy and spectacle. Though separated by continents and cultures, Trump and Milei’s shared disdain for establishment politics and a mutual affection for shock value linked their trajectories in the imaginations of their supporters.
Fast forward three years to 2024, and the political world was turned on its head.
Milei, once dismissed as a fringe outsider, seized the presidency of Argentina in a landslide—a triumph of style over substance, fueled by promises of radical economic reform steeped in austerity and deep cuts to public interest spending. Trump, who had clawed his way back to power with a surprise 2024 election victory, eking by with a slimmer popular vote margin and narrower victory than any other in over a century, was mere weeks away from reclaiming the Oval Office.
The unlikely duo became the poster boys of a resurgence of right-wing, white nationalist populism. Trump, emboldened by his razor-thin victory, described Milei as a “brother in arms” during a congratulatory phone call. Milei, ecstatic, became the first world leader to congratulate Trump in person at the 2024 CPAC convention, claiming to be a mutual part of a blessed mission: “Today the world is a much better place because the winds of freedom are much stronger… A true miracle and proof that the forces of heaven are on our side,” Milei jovially proclaimed during his CPAC speech.
Yet, beneath the mutual admiration and bluster lay cracks in their respective facades. While Trump was busy assembling a cabinet that hinted at renewed chaos, Milei’s honeymoon phase was already crumbling under the weight of his own policies. Both men had ascended by exploiting dissatisfaction and anger, but their ability to govern was increasingly in question. And in Milei’s case, his credibility recently took an even greater hit as more details have surfaced that he had once enthusiastically promoted a now-collapsed cryptocurrency scheme, raising the question of whether Argentina’s self-proclaimed libertarian savior had been duped or, even worse, did the duping himself.
For Milei, the exhilaration of victory quickly gave way to mass protests (including ones covered by Unicorn Riot from last May and January / February 2024), economic stagnation, and plummeting public approval. For Trump, the looming challenges of his second presidency—a divided country, international skepticism, and mounting legal troubles—threatened to turn triumph into turmoil.
But if Milei and Trump seemed destined for a political bromance, the rest of Latin America wasn’t nearly as enamored.
While Milei threw himself into Trump’s embrace, other regional leaders responded with defiance. In Mexico, President Claudia Sheinbaum made it clear she would not be bullied into Trump’s hardline immigration policies, standing firm in early diplomatic confrontations even as economic pressures forced some concessions. Colombia’s Gustavo Petro was even more direct in his opposition, warning that Trump’s return signaled renewed imperial aggression and pledging to resist the right-wing tide sweeping the hemisphere. Even Brazil, governed by the more pragmatic Lula da Silva, showed little enthusiasm for Trump’s reemergence, wary of his influence over the continent’s far-right.
Milei, in contrast, found himself increasingly isolated—Trump’s most reliable ideological ally in Latin America, but an outlier rather than the harbinger of a broader regional shift. As he struggled to implement his radical libertarian agenda amid economic turmoil and mounting protests it became clear that his populist revolution was already faltering.
As the world braced for this new era of racist and xenophobic leadership, the intertwined fates of Trump and Milei offered a potent lens through which to examine the volatility of contemporary politics. The parallels were impossible to ignore: two men, propelled to power by mainstream-media-manufactured personalities and plenty of controversy, now tasked with delivering on promises that many deemed impossible. The question wasn’t just whether they would succeed, but whether their respective nations—and the world—could withstand the consequences if they failed.

Javier Milei first gained notoriety as a radio talk-show host in the 2000s, and by the 2010s, he became a television personality and a regular guest on nationally known programs such as Intratables, A Dos Voces, and Todo Noticias (TN). Mainstream media took to Milei, as his propensity to yell and use inflammatory—and often profane—language lent itself toward viral social media distribution, with such antics gaining particular exposure among younger generations.
By November 2021, then, Milei was barely able to garner just a few congressional seats for both himself and his current vice president through a rag-tag and thrown together coalition called La Libertad Avanza (Freedom Advances) which wound up only garnering 17.3% of the vote. That was Milei’s first foray into Argentinian politics.
By 2023, mainstream news media ran one image-driven, personalized story after another, ranging from pieces exploring his haircut and fashion sense to images distributed far and wide of Milei wielding a chainsaw, symbolizing campaign promises to slash through any number of the previous government’s policies.
Milei’s upset victory probably shouldn’t have been seen as a big surprise, given the global drift toward reality show politicians.
The chainsaw symbolism was covered at the expense of more serious coverage, like evaluating Milei’s idea of dumping the Argentinian peso for a dollarized economy—a promise he’s since walked back and will likely never implement.
The media brushed past the impact that cuts to government spending may have on the poverty rate, which rocketed higher throughout 2024. Milei’s characterization of social programs as being nothing more than bureaucracies without any benefit to the public was uncritically noted in passing, if that, while obsession over his “rock star M.O.” and “ loco”ways. Both narratives stemmed from coverage dominated by Clarin, Argentina’s largest newspaper.
In one sub-headline, Milei was generously quoted as saying, “I don’t brush my hair, the wind does,” with the main head asking, “ Who cuts Milei’s hair?”
Thus, instead of covering concerns about Milei taking heartfelt advice from one of his three dogs, whom he claimed transmitted the thoughts and ideas of yet another deceased pet dog, media accounts depicted this as just one of Milei’s many quirky ways, for which he has been long known with a nickname of “El Loco” first being given during his adolescence and lasting through the present.
Argentinian intellectuals, analysts, and critics alike have pointed to Milei’s firebrand public persona playing well to mainstream news coverage as a crucial factor in his quick rise to a viable, and eventually successful presidential candidate. Ricardo Foster, an Argentine philosopher and intellectual, argued that sensationalism and populism were given inordinate airtime without sufficient scrutiny, with an over-prioritization on personality over actual policy viability.
Forrest Hylton, columnist for the London Review of Books and professor of history at the Universidade Federal da Bahia, told Unicorn Riot that Milei cultivated a “cult-like persona,” which helped to obfuscate that he was an “ideological fanatic” who was armed with proposals, as opposed to chainsaws, that, “will only serve to worsen the continuing economic crisis.”
Gimena Sánchez-Garzoli, a foreign policy analyst and critic with the Washington Office on Latin America (WOLA) who’s intimately familiar with Milei supporters also spoke to Unicorn Riot.
Sánchez-Garzoli is originally from Argentina, and much of her family still resides there, and she assured Unicorn Riot that she “gets” Milei’s surprising and quick political rise all the way to the Casa Rosada (Argentina’sWhite House). Sánchez-Garzoli pointed to a good chunk of her family in Argentina as “all pro-Milei [and] just people who were very tired with the status quo, which is somewhat understandable, given that a whole generation has been raised on one economic crisis after another.”
Argentina’s status quo has been characterized by several decades of chaotic ups and (mostly) downs in its long-beleaguered economy. An entire generation of ordinary Argentinians has grown up “without a stable middle class or trade unions to turn to” and without first-hand awareness of Argentina’s dictatorial past, Sánchez-Garzoli explained. Many of the concerns about Milei’s autocratic tendencies were at least sometimes quoted in the media, but nevertheless fell on the deaf ears for a large chunk of the populace desperate for any kind of change.
Nonetheless, Milei’s inexperience with national politics still shocked the country after a very strong showing in the first round of presidential voting, with the threshold for winning outright nearly being cleared by Milei, even with support being split between him and a third-placed candidate. Milei’s push in the second round of voting got boosted by a poor and befuddling choice by his opponents. Although his opponent hailed from the incumbent party whose candidates had been in power for 16 of the last 20 years, the choice was, to say the least, a highly questionable one.
2023 was indeed a far cry from the days of Néstor Kirchner, the founding father of the 21st-century embodiment of “Peronists,” later dubbed the “K’s.” Néstor was widely credited with helping the country navigate through the extremely tricky waters of a debt crisis provoked by the International Monetary Fund (IMF). Kirchner consequently became one of Argentina’s most popular presidents ever, with as many as 200,000 Argentinians attending his funeral in the wake of his unexpected death shortly after the end of his second term.
This was how the “K” legacy began as the country happily elected Kirchner’s wife, Cristina, after Néstor passed away shortly after his two terms in office.
In the long run, Argentina never really fully recovered from its IMF-induced meltdown. The “K”s became immersed in a quagmire as neoliberal opposition parties lobbed one accusation of corruption after another and endlessly embroiled Cristina with lawsuits (incidentally, a similar strategy was employed in neighboring Brazil against current president Lula and his predecessor, Dilma Rousseff).
Thus, matters couldn’t have been better for Milei as a challenger, as the Peronist and “K” loyalists witlessly nominated its minister of the economy, the often wooden Sergio Masa, as its presidential candidate. Sánchez-Garzoli remarked, “There was a superiority thing going on with the ‘Ks’ in Argentina that turned a lot of ordinary Argentinians completely off.”
Milei, who deftly established himself as a media darling thanks to an all-too-pliant corporate press, only had to beat the rather uncharismatic Masa. The “K” presidential candidate was saddled by an economy falling yet again into hyperinflation under his administration. Under Masa, inflation rose to levels that rivaled those of the most economically plagued African economies and thus also eclipsed even previous high inflation rates that had long plagued Argentina.
Argentinians found themselves counting away their drastically devalued currency in transaction after transaction, as bill denominations couldn’t keep up with raised prices and one-thousand peso notes were barely worth a U.S. dollar. Meanwhile, the Ks stubbornly refused to print up and distribute currency notes of higher denominations and no one wanted to deal with credit and debit card transactions, with traumatic historical memories of countless Argentianians having their savings wiped out in the wake of the first IMF-caused economic meltdown.
This is how cash became king in Argentina. After all, one cannot know with any degree of security how long their money will be worth anything, which only furthers the spiral of hyperinflation. This cash economy rests on top of a prevalent black market exchange for U.S. dollars, which the wealthiest of Argentinians regularly avail themselves of, causing further damage.
In response to a move by the “Ks” that smacked of hubris, Argentinian voters mercilessly punished the Peronists by electing Milei in a landslide victory against the party’s leading economic manager who oversaw the country’s descent into its worst inflationary recession.
Milei’s upset victory probably shouldn’t have been seen as a big surprise, given the global drift toward reality show politicians. Candidates the world over, ranging from India’s Narendra Modi to Brazil’s Jair Bolosonaro and Donald Trump, prefer to court media spectacles with jaw-dropping and often racist, sexist, and classist remarks via social media, instead of well-thought-out white papers and policy details.

Less than a year into Milei’s presidency, Argentina erupted in its largest protests in decades. On May 9, 2024, a nationwide general strike brought as many as a million people into the streets, according to organizers, marking the second mass mobilization against his government in just a matter of months. The message was unmistakable: The country was on the brink, and its people were not backing down.
What prompted such extraordinary levels of political resistance and opposition to a president who had won a landslide electoral victory not even a year ago? Sánchez-Garzoli told Unicorn Riot that Milei has a sustainability problem, which presented a challenge considering that the overwhelming majority of the electorate put him into office to gain stability.
“Milei’s economic plans and austerity packages are having a devastating effect on the middle and lower classes in Argentina. Milei has brokered austerity packages with the IMF but has not compensated that with anything else. Cutting all of these public programs is one thing, but leaving the people out on the street without enough food is another. It isn’t sustainable,” explained Sánchez-Garzoli, and increasingly more and more Argentinians seem to agree.
Many observers were left wondering whether Milei had merely been an oblivious front man or something worse: a willing participant in a financial scam.
Milei not only slashed funding for public education but also managed to overcome a veto override attempt by the overwhelmingly opposition-based Congress. In both the lead-up to and in the wake of these events, Milei’s popularity has precipitously dropped, according to public opinion polls. Several sources indicate that his popularity has been steadily falling since the start of his presidency, with one mainstream outlet headlining and questioning, “Is the honeymoon over? Milei’s popularity dips while worry over poverty is on the rise,” even before the mass protest of early October 2024.
For example, one Zuban Córdoba poll highlighted that 57.3% of Argentines disapprove of his performance as of September 2024, a significant increase from the already high 52.5% in April of the same year (the first of two mass protests against Milei’s stance on public education also took place in April 2024). Over that same period, Milei’s “full support” dropped from 38.2% to just 20.3%. A survey from Torcuato Di Tella University showed a sharp decline in public trust in Milei’s government, down to 2.16 points out of a possible 5 as of September, the lowest level since he assumed office. Yet another poll showed only 33% of Argentines as having general confidence in Milei, reflecting growing disillusionment with the president’s lofty campaign promises, particularly as inflation has only been slightly stymied at best while 66% of those surveyed strongly believed unemployment and poverty rates continue to rise.
Results like these point to a slow but steady decline in support of Milei’s image, largely driven by doubts about his ability to resolve the nation’s economic woes while cutting public resources and a political movement lacking any foundation.
Milei’s party is only a recent creation of his own and not linked in any way to a popular movement of any sort. As a result it failed to capture a significant number of seats in Argentina’s legislature. In fact, no other Argentinian president since the U.S.-backed dictatorship was finally toppled in 1983 had been elected with their party receiving as little support as Milei’s, which received just 15% of the seats in the lower house and 10% in the Senate.
Finally, Milei made a slew of campaign promises, chainsaw in hand, that were virtually impossible to deliver on, ranging from dollarization to public spending cuts solving the economy’s woes. He fashioned himself as an evangelist for free markets by exalting cryptocurrencies as a pathway to economic freedom. In recent days (February 2025) it emerged that he’d promoted $LIBRA, a cryptocurrency that collapsed similar to a “pump and dump” (PDF) or Ponzi scheme, leaving countless investors in financial ruin. Videos surfaced of Milei, then a rising political firebrand, endorsing the company in slickly produced ads, describing it as a revolutionary financial opportunity. The coin’s implosion sparked investigations, a pinned tweet got deleted by Milei himself, and over a hundred lawsuits were immediately filed. Many observers were left wondering whether Milei had merely been an oblivious front man or something worse: a willing participant in a financial scam. Either way, the scandal added yet another layer of volatility to his already embattled presidency, fueling doubts about both his judgment and the sincerity of his right-wing populist rhetoric, adding damage to his already low public approval ratings and triggering calls for his impeachment.

The U.S. is widely accepted as the leading influencer, benefactor, and supporter of the IMF. Similarly, the IMF is widely seen as being a key catalyst for Argentina’s first economic downturn at the turn of the century, which it never fully recovered from. Thus, the question is unavoidable: Does the U.S. bear responsibility for Argentina’s continuing economic rut and subsequently Milei’s meteoric rise and apparent fall?
Unicorn Riot turned to Adolfo Pérez Esquivel, a household name in Argentina and a Nobel Peace Prize winner, to get some answers. He did not mince words when it came to sizing up IMF and U.S. policy toward Argentina during an interview.
“[T]he U.S. continues to treat Latin America as a whole as its ‘backyard,’” Pérez Esquivel said, harkening back to a description first coined by Thomas Mann, a prominent State Department official who served during the John F. Kennedy and Lyndon Johnson administrations. U.S. planners continued to refer to Latin America as America’s “backyard,” particularly Ronald Reagan’s officials who also actively supported an array of Latin American dictatorships in the 1980s, a campaign capped by the Iran-Contra scandal that broke in 1986.
An array of U.S.-supported IMF officials have acknowledged failing Argentina and leaving its economy in tatters for decades.
One high-ranking U.S. official after another, from Secretary of State Henry Kissinger during the Nixon administration, to Jeane Kirkpatrick, U.S. ambassador to the United Nations during the Reagan administration, to the late President Jimmy Carter, supported Argentina’s despotic 1970s regime directly or otherwise.
Pérez Esquivel thus approvingly mentioned one of Latin America’s most famous writers, Eduardo Galeano, the author of The Open Veins of Latin America, and his well-known criticism of so-called third world debt to the U.S. and the IMF working hand-in-hand together and its devastating impact on the continent: “The more the poor countries pay, the more they owe [to the IMF], and the less they have [for themselves],” Pérez Esquivel told Unicorn Riot.
In the midst of Argentina’s first IMF-provoked crisis, Paul Krugman, when he was The New York Times leading economic columnist, acknowledged that “much of the world, with considerable justification, views [the IMF as being a] branch of the U.S. Treasury Department.”
Even the IMF itself would come to admit wrongdoing and has, time and time again, been more a part of the problem than the solution to Argentina’s economic suffering. An array of U.S.-supported IMF officials have acknowledged failing Argentina and leaving its economy in tatters for decades: In 2002, Anne Krueger, the IMF’s first deputy managing director, admitted to the IMF’s strategies having backfired; in 2003, IMF Managing Director Horst Köhler acknowledged that its economic prescriptions were poorly designed; and in 2016, IMF Managing Director Christine Lagarde expressed regret over IMF failures in Argentina, merely saying the IMF did the “best we could.”

It was dinner time during a pleasantly mild spring night in December 2023; Argentina, far south of the equator, has opposite seasons to North America, and Buenos Aires was buzzing with spontaneous protest. Winter vacationing tourists from the Northern Hemisphere looked on with curiosity and confusion, but locals were plenty familiar with what was happening.
As is customary for many Latin American countries during spontaneous resistance, people drummed on pots and pans with kitchen utensils or whatever they could get their hands on. Some joined from their apartment balconies while others gathered in front of restaurants and other public places. This is known in Spanish as a cacerolaz and it was happening in the wake of Milei’s inauguration and one of his very first acts as president.
During one of Milei’s first public speeches, he immediately warned Argentinians of “tough times” to follow—a stark contrast to his enthusiastic campaign promises to instantly transform the economy. In one of the first presidential actions of the still newly minted administration, Milei issued a megadecreto (a mega decree, like an “executive order” in U.S. political parlance), giving credence to the many warnings sounded about Milei’s authoritarian bent.
Civil society has persisted and continued to resist, with more people in Argentina expecting additional mass protests happening before any semblance of poverty reduction and stability is brought to Argentina’s IMF debt plagued economy.
Milei did choose to deliver on a hostility he openly brandished toward civil society and political resistance throughout his campaign by having chosen Victoria Villaruel for his vice presidential candidate. Villaruel is the daughter of one of Argentina’s military generals who hailed from its dictatorial period of the 1980s; she and Milei have both expressed open admiration for the bygone era. Such nostalgia was made concrete just one day after Milei’s inauguration, as he created a national registry tracking a swath of political resistance against his administration, which facilitated increased surveillance by federal forces.
But it was the megadecreto that provoked spontaneous protest in the streets for months on end and up to the present as mass protest after mass protest has been successfully organized. The executive order—known in Spanish as the decreto de necesidad y urgencia—or DNU for short—is a far-reaching presidential decree which eliminated over 300 hard-fought and won domestic laws by civil society with the stroke of a pen and without congressional approval. The brushed-aside laws were mostly public-interested oriented ones, which slashed severance pay, significantly undermined collective bargaining rights, deregulated the rental market, and undermined dozens upon dozens of previously existing protections.
At the end of the day, the megadecreto wound up being reduced to a handful of about 60 executive orders, a significant decrease from the over 300 initially issued.
As Sánchez-Garzoli told Unicorn Riot, however, this was likely what Milei was banking on, in what amounted to a brazen and eventually partially successful “attempt to push his entire agenda onto Congress.”
It was a “a tangible example of his authoritarianism and an extraordinary measure to use to push one’s own agenda through, which is only supposed to be used for specific and limited, emergency purposes. What wound up actually going through were still some 64 laws and thus was a blitzkrieg strategy to make sure as much unilateral imposition as possible could stand,” Sânchez-Garzoli said.
All the while, civil society has persisted and continued to resist, with more people in Argentina expecting additional mass protests happening before any semblance of poverty reduction and stability is brought to Argentina’s IMF debt plagued economy.
Just hours after the official presidential election results reached Milei’s campaign, the White House called President-elect Javier Milei to congratulate him and assure him of U.S. support, emphasizing potential bi-national collaboration.
Such congratulations came despite Milei becoming the world’s first self-proclaimed “libertarian” president. Critics argue the label is questionable, given his hostility toward protest and mass assembly rights, as well as his hard-line stances against abortion. Additionally, he has shown little interest in decriminalizing drugs or supporting policies that promote immigration and free movement—stances traditionally associated with so-called “libertarianism.” Instead, critics contend that Milei’s so-called “anarcho-capitalism” stops short of meaningful political and social reforms and claim his agenda prioritizes enlarging the power and wealth of corporations over expanding individual freedoms.
These contradictions were pointed out in an interview with Time reporter Vera Bergengruen, as she questioned Milei’s stances on abortion.
What are the implications of this political backslapping between Milei and leading Wall Street-friendly politicians and Silicon Valley CEOs when it comes to Argentina’s future?
As has been duly acknowledged by Milei, his priorities are more toward attracting foreign investment as opposed to passing domestic legislation to relieve the battered Argentinian economy. He has tried to court powerful political and economic elites through policy stances, rhetoric, and an ideology which caters to them. This has been reflected by Milei’s travel itinerary.
“Milei has spent more time abroad than he has spent in the provinces of Argentina,” Pérez Esquivel told UR. Indeed, the contrast with Milei’s Argentinian presence is one that attracts the ire of civil society in resistance, with Esquivel pointing to these jaunts abroad as evidence of Milei not caring about Argentinians.
Milei has personally met with some of the most powerful billionaires in the world such as Elon Musk, resulting in Musk encouraging his millions of followers to invest in Argentina on his X platform. Other Silicon Valley magnates, including Meta’s Mark Zuckerberg and his peers at Apple, Alphabet (Google), and OpenAI—which is backed by Microsoft—have also been on Milei’s itinerary during his trips to the U.S. This cozying up to billionaire CEOs has attracted the enthusiasm of investors: One U.S.-based financier wrote that the “economic overhaul” by Milei is “not just refreshing, but essential.” Billionaire investor Stanley Druckenmiller announced investments in five Argentinian companies after hearing Milei speak at Davos.
And while Milei has held two in-person meetings within a month of each other with Musk, he had only visited 5 out of 23 of Argentina’s provinces as of September 2024. In one of those provinces, Tierra del Fuego, Milei raced off to meet with Laura Richardson, the commander of United States Southern Command at the time, for a ceremony to announce the construction of a joint naval base, a stark contrast to prior “K” policies distancing the country from U.S. military relations.
U.S. Rep. Maria Elvira Salazar, a Republican representing Florida’s 27th district, endorsed Milei even before the election. Salazar declared Argentina to be a country with “only one culture, only one religion, and only one race, completely homogenous.” Milei himself went so far as to fire an Argentinian Football Association official who merely criticized the Argentinian national soccer team after Manchester City star and national team standout, Julian Alvarez, uploaded an excerpt of its Copa America final winning celebrations to his Instagram account. The video featured racist chants against the French national soccer team, whom it had beat in December 2022’s World Cup final. (Milei wound up meeting with Prime Minister Emanuel Macron in France, in the aftermath of the scandal and shortly before France played against Argentina in an Olympics soccer match in which a brawl happened at the conclusion of the match.)
The affinity between Milei and Trump has not been lost on Salazar, as she has proudly told Politico that “extensive conversations” between the Biden administration and Milei have occurred. “[Argentina is] going through a very bad moment, but they are supported, and they are helped by the big guys, meaning us,” Salazar said.
Cozying up to both CEOs as well as leading public officials from both sides of the aisle in Capitol Hill and the White House is certainly part of how Milei has set out to make Argentina a “Mecca for the West,” as he put it in a during an address he gave in Los Angeles. However, foreign policy experts have expressed concerns about such warming up to the U.S. and the West in general.
Foreign policy expert Alejandro Frenkel wrote that the guiding doctrine of Milei’s foreign policy is a confused “Westernism,” subordinated to the United States and Israel. Others have described “an [outright] open subordination to Washington.”
Cynthia Arnson, an expert on Latin America from the Wilson Center, told Unicorn Riot that, “If Trump wins the White House, there will be an ideological affinity with Milei and there probably will be White House visits, even though there will likely be very little to offer by a Trump White House,” adding that “Milei has been mostly playing ‘footsy’ with the IMF, is looking for postponed payments, and has bent over backwards not to be hostile.”
It’s a strong contrast with past Argentinian efforts to combat the IMF’s corrosive influence on its economic struggles. Thus, this begs the question, what are the implications of this political backslapping between Milei and leading Wall Street-friendly politicians and Silicon Valley CEOs when it comes to Argentina’s future?
Given that Milei has centered his administration on inflation-reduction efforts to address Argentina’s economic woes, the leading economists who voiced concerns in a public letter before his victory are likely still uneasy about the country’s prospects for recovery. In the letter, one renowned economist after another who signed the critique took issue with the idea that “a major reduction in government spending would” help matters for ordinary Argentinians and thought instead that a likely “increase [to] already high levels of poverty and inequality [will ensue], and could result in significantly increased social tensions and conflict.”
In hindsight, this is exactly what has transpired: Argentina’s bleak prospects for improvement now hinge on further change—this time, in service of the public interest rather than against it.
These are two of the most questionable and controversial institutions directly or indirectly funded with U.S. taxpayers’ money.
I think that Elon Musk and his Department of Government Efficiency, or DOGE, have been misinformed. I don’t disagree with their shutting down USAID, but I think it’s rather small fry. There are much, much bigger fish to fry if you want to really save U.S. government money that is being wasted in programs that are mischievously justified as aid to the poor people of the world.
Elon, hear me out: if you walk northwest from your headquarters at the Eisenhower Executive Building along Pennsylvania Avenue, you’ll come after one long block upon two ugly buildings squatting beside each other. One is the World Bank. The other is the International Monetary Fund (IMF). You can actually just walk in and demand to look at their books since they are extensions of the U.S. government. And you would have a very good reason to do so, since these are two of the most questionable and controversial institutions directly or indirectly funded with U.S. taxpayers’ money.
The IMF and the World Bank are monuments to misguided economic thinking and policies that have brought much misery to the peoples of the Global South.
Let me start with the World Bank, which is located at 1818 H St NW. This institution has so-called development projects throughout the Global South, otherwise known as developing countries. This agency says that its mission is to end poverty in the developing world. To fulfill this goal, its lending has risen from nearly $55 billion in 2015 to $117.5 billion in 2024. Yet, despite this massive increase, the bank admits that global poverty reduction “has slowed to a near standstill, with 2020-2030 set to be a lost decade.” Some 3.5 billion people, or 44% of the globe, remain poor, after decades of massive World Bank lending. And a major part of the reason is that World Bank programs have created poverty instead of alleviating it.
To manage its operations, the Bank’s full-time staff rose from nearly 12,000 in 2015 to over 13,000 in 2023. These figures are just the tip of the iceberg. If one includes all employees—permanent, non-permanent, contractual, part-time—throughout the world, the bank employs close to 41,000 people. The vast majority, 26,000, or 63%, work out of the World Bank headquarters in Washington, D.C., and only 3,200 are located in Africa, where most people in extreme poverty live.
The Bank’s economists and top administrators are among the highest paid financial functionaries in the world, which explains the reason why the bank is a major cause of the brain drain from developing countries: a great number of highly trained economists from developing countries prefer to work at the bank instead of their home countries, with some going straight from Ivy League or British graduate schools to Washington, D.C. Many within the bank and the International Monetary Fund complain about the “South Asian Mafia” that they claim controls employment opportunities for economists and higher-level staff in the two organizations.
The World Bank has come under fire for the billions it has spent supporting fossil-fuel projects throughout the Third World that have contributed to global warming and to mega-dam projects that have displaced millions. The bank, along with the fund, has also gained notoriety for imposing “structural adjustment” programs guided by the radical principles of the “Washington Consensus” that are designed to promote globalization but have, instead, increased poverty and deepened inequality. The reason World Bank projects and programs don’t work or create exactly the opposite of their intended goals is because they are based on questionable propositions built on little or no empirical evidence. An assessment made a few years ago by an all-star team of renowned economists led by Princeton’s Angus Deaton, a recipient of the Nobel Prize for Economics, was damning:
[The] panel had substantial criticisms of the way that the research was used to proselytize on behalf of bank policy, often without taking a balanced view, and without expressing appropriate skepticism. Internal research that is favorable to bank positions was given great prominence, and unfavorable research ignored. In these cases, we believe that there was a serious failure of checks and balances that should have separated advocacy and research. The panel endorses the right of the bank to strongly defend and advocate its own policies. But when the bank leadership selectively appeals to relatively new and untested research as hard evidence that these preferred policies work, it lends unwarranted confidence to the bank’s prescriptions. Placing fragile selected new research results on a pedestal invites later recrimination that undermines the credibility and usefulness of all bank research.
The bank’s refusal to acknowledge real-world refutations of its pro-globalization advocacy and its unbalanced, one-sided research led to justifiable rejection of its advice by the people who were suffering from the policies it was implementing, confessed Paul Collier, head of the Research Development Department of the Bank from 1998 to 2003:
The profession has been unprofessional, fearful that any criticism would strengthen populism, so that little work has been done on the downsides of these different processes [of globalization]. Yet the downsides were apparent to ordinary citizens, and the effect of economists appearing to dismiss them has resulted in widespread refusal of people to listen to “experts.” For my profession to reestablish credibility we must provide a more balanced analysis, in which the downsides are acknowledged and properly evaluated with a view to designing policy responses that address them. The profession may be better served by mea culpa than by further indignant defenses of globalization.
Despite the high rate of failure of its lending programs acknowledged in internal World Bank assessments, the World Bank administrative budget that supports the high salaries of its economists and other high-level staff just keeps growing. The World Bank (IBRD/IDA) administrative budget was approved at $3.5 billion for FY25, a sizable rise from the $3.1 billion authorized for FY 2024, with no convincing reason at all.
The International Monetary Fund, whose address is 700 19th St NW, is the World Bank’s sister agency. It has a full-time staff of 3,100, supported by a budget of $1.5 billion. The IMF’s economists are paid even higher than those at the World Bank, and they evoke more fear, hatred, and contempt than the Bank.
The IMF has an equally controversial history. It has a record of coming in to supposedly assist developing economies in crisis, only to make things worse. Its greatest debacle and scandal was its performance during the Asian Financial Crisis of 1997-98, when the so-called “tiger economies “of the East and Southeast Asia were destabilized by the massive inflows and outflows of foreign portfolio investment.
The fund was heavily criticized on three counts. First, it had encouraged the governments of the region to eliminate capital controls, thus provoking uncontrolled capital flows. Second, it assembled multi-billion dollar “rescue packages” that went to rescue not the people suffering from the crisis but to compensate the foreign financial speculators that had lost millions in dubious speculative ventures, thus encouraging “moral hazard,” or irresponsible investing. Third, its measures to stabilize the damaged economies intensified the crisis, since instead of encouraging government spending to counteract the collapse of private sector, it told the governments to radically cut spending, leading to a “procyclical” negative synergy that ended in deep recession.
So long as the IMF is there, the big international banks will assume that they will be bailed out for making irresponsible loans.
In just a few weeks, 1 million people in Thailand and 22 million in Indonesia fell below the poverty line. The only country that contained the crisis was Malaysia, which refused to follow the fund’s dictates and imposed capital and currency controls
So disastrous were the IMF’s interventions that George Schultz, President Ronald Reagan’s secretary of the Treasury, called for its abolition for encouraging moral hazard, and prominent economists like Jagdish Bhagwati and Jeffrey Sachs accused it of provoking global macroeconomic instability. Indeed, a rare conservative-liberal alliance in the U.S. Congress came within a hair’s breath of denying the IMF a $14.5 billion replenishment.
Eventually, the fund was forced to admit that the “thrust of fiscal policy… turned out to be substantially different… because the original assumptions for economic growth, capital flows, and exchange rates… were proved drastically wrong.” But things were never the same again. The IMF was so reviled for its performance that Asian governments developed IMF-phobia, swearing never again to ask the IMF for rescue even in the most dire circumstances. For instance, after paying off what Thailand owed the IMF, Prime Minister Thaksin Shinawatra declared the country “liberated” from the fund in 2004.
Instead of learning from its debacle during the Asian Financial Crisis, the IMF stumbled into another fiasco more than a decade later, during the Global Financial Crisis. It allowed itself to be hijacked by Germany, the European Commission, and the European Central Bank to provide billions of public money to rescue German financial institutions and investors that had engaged in an orgy of irresponsible lending to Greece to the tune of 25 billion euros. To get the so-called rescue funds, the Greek government, like the Asian governments previously, was forced to adopt severe austerity measures that drove unemployment up to 28% and condemned the Greek economy to permanent stagnation, only to turn the money it was ostensibly receiving over to the German banks.
Not surprisingly, so long as the IMF is there, the big international banks will assume that they will be bailed out for making irresponsible loans.
There is a fiction that the IMF and World Bank are multilateral institutions that are owned by their many member governments. The reality is that the United States controls both institutions, with a 17.4% share of total quotas at the fund and 15.8% share of voting power at the bank. These shares give the U.S. government a veto power over any policy change. But the truth is that U.S. power is not limited to its being able to veto policy decisions it does not like. No country would dare oppose a move by the United States to radically cut the administrative budgets (by, say, 75% initially) and the number of personnel in the two organizations (to 600 personnel each, as in the case of USAID) if it wanted to do so. All it needs to do to get its way is to threaten to withhold its contributions to the two organizations. I can guarantee that immediately the interest rate at which the bank borrows in international capital markets would leap upward, paralyzing its lending operations.
The IMF and the World Bank are monuments to misguided economic thinking and policies that have brought much misery to the peoples of the Global South. They are institutions that no longer serve any purpose except to perpetuate and enlarge themselves. If Elon Musk and Donald Trump are really serious about radically downsizing bloated bureaucracies, they could not have better targets than the Bretton Woods twins.
If capitalist interests continue to drive this crucial transition, which is all too likely, while global energy consumption isn’t scaled back radically, the amount of critical minerals needed to power the global future remains unfathomable.
Considered Angola’s crown jewel by many, Lobito is a colorful port city on the country’s scenic Atlantic coast where a nearly five-kilometer strip of land creates a natural harbor. Its white sand beaches, vibrant blue waters, and mild tropical climate have made Lobito a tourist destination in recent years. Yet under its shiny new facade is a history fraught with colonial violence and exploitation.
The Portuguese were the first Europeans to lay claim to Angola in the late sixteenth century. For nearly four centuries, they didn’t relent until a bloody, 27-year civil war with anticolonial guerillas (aided by the Cuban Revolutionary Armed Forces) and bolstered by a leftist coup in distant Lisbon, Portugal’s capital, overthrew that colonial regime in 1974.
Lobito’s port was the economic heart of Portugal’s reign in Angola, along with the meandering 1,866-kilometer Benguela Railway, which first became operational in the early 1900s. For much of the twentieth century, Lobito was the hub for exporting to Europe agricultural goods and metals mined in Africa’s Copperbelt. Today, the Copperbelt remains a resource-rich region encompassing much of the Democratic Republic of Congo and northern Zambia.
Perhaps it won’t shock you to learn that, half a century after Portugal’s colonial control of Angola ended, neocolonialism is now sinking its hooks into Lobito. Its port and the Benguela Railway, which travels along what’s known as the Lobito Corridor, have become a key nucleus of China’s and the Western world’s efforts to transition from fossil fuels to renewable energy sources in our hot new world. If capitalist interests continue to drive this crucial transition, which is all too likely, while global energy consumption isn’t scaled back radically, the amount of critical minerals needed to power the global future remains unfathomable. The World Economic Forum estimates that three billion tons of metals will be required. The International Energy Forum estimates that to meet the global goals of radically reducing carbon emissions, we’ll also need between 35 and 194 massive copper mines by 2050.
It should come as no surprise that most of the minerals from copper to cobalt needed for that transition’s machinery (including electric batteries, wind turbines, and solar panels) are located in Latin America and Africa. Worse yet, more than half (54%) of the critical minerals needed are on or near Indigenous lands, which means the most vulnerable populations in the world are at the most significant risk of being impacted in a deeply negative fashion by future mining and related operations.
Having lagged behind that country’s investments in Africa for years, the U.S. is now looking to make up ground.
When you want to understand what the future holds for a country in the “developing” world, as economists still like to call such regions, look no further than the International Monetary Fund (IMF). “With growing demand, proceeds from critical minerals are poised to rise significantly over the next two decades,” reports the IMF. “Global revenues from the extraction of just four key minerals — copper, nickel, cobalt, and lithium — are estimated to total $16 trillion over the next 25 years. Sub-Saharan Africa stands to reap over 10 percent of these accumulated revenues, which could correspond to an increase in the region’s GDP by 12 percent or more by 2050.”
Sub-Saharan Africa alone is believed to contain 30% of the world’s total critical mineral reserves. It’s estimated that the Congo is responsible for 70% of global cobalt output and approximately 50% of the globe’s reserves. In fact, the demand for cobalt, a key ingredient in most lithium-ion batteries, is rapidly increasing because of its use in everything from cell phones to electric vehicles. As for copper, Africa has two of the world’s top producers, with Zambia accounting for 70% of the continent’s output. “This transition,” adds the IMF, “if managed properly, has the potential to transform the region.” And, of course, it won’t be pretty.
While such critical minerals might be mined in rural areas of the Congo and Zambia, they must reach the international marketplace to become profitable, which makes Angola and the Lobito Corridor key to Africa’s booming mining industry.
In 2024, China committed $4.5 billion to African lithium mines alone and another $7 billion to investments in copper and cobalt mining infrastructure. In the Congo, for example, China controls 70% of the mining sector.
Having lagged behind that country’s investments in Africa for years, the U.S. is now looking to make up ground.
Zambia’s Copper Colonialism
In September 2023, on the sidelines of the G20 meeting in India, Secretary of State Antony Blinken quietly signed an agreement with Angola, Zambia, the Democratic Republic of Congo, and the European Union to launch the Lobito Corridor project. There wasn’t much fanfare or news coverage, but the United States had made a significant move. Almost 50 years after Portugal was forced out of Angola, the West was back, offering a $4 billion commitment and assessing the need to update the infrastructure first built by European colonizers. With a growing need for critical minerals, Western countries are now setting their sights on Africa and its green energy treasures.
“We meet at a historic moment,” President Joe Biden said as he welcomed Angolan President João Lourenço to Washington last year. Biden then called the Lobito project the “biggest U.S. rail investment in Africa ever” and affirmed the West’s interest in what the region might have to offer in the future. “America,” he added, “is all in on Africa… We’re all in with you and Angola.”
Both Africa and the U.S., Biden was careful to imply, would reap the benefits of such a coalition. Of course, that’s precisely the kind of rhetoric we can expect when Western (or Chinese) interests are intent on acquiring the resources of the Global South. If this were about oil or coal, questions and concerns would undoubtedly be raised regarding America’s regional intentions. Yet, with the fight against climate change providing cover, few are considering the geopolitical ramifications of such a position — and even fewer acknowledging the impacts of massively increased mining on the continent.
In his book Cobalt Red, Siddharth Kara exposes the bloody conditions cobalt miners in the Congo endure, many of them children laboring against their will for days on end, with little sleep and under excruciatingly abusive conditions. The dreadful story is much the same in Zambia, where copper exports account for more than 70% of the country’s total export revenue. A devastating 126-page report by Human Rights Watch (HRW) from 2011 exposed the wretchedness inside Zambia’s Chinese-owned mines: 18-hour work days, unsafe working environments, rampant anti-union activities, and fatal workplace accidents. There is little reason to believe it’s much different in the more recent Western-owned operations.
“Friends tell you that there’s a danger as they’re coming out of shift,” a miner who was injured while working for a Chinese company told HRW. “You’ll be fired if you refuse, they threaten this all the time… The main accidents are from rock falls, but you also have electrical shocks, people hit by mining trucks underground, people falling from platforms that aren’t stable… In my accident, I was in a loading box. The mine captain… didn’t put a platform. So when we were working, a rock fell down and hit my arm. It broke to the extent that the bone was coming out of the arm.”
An explosion at one mine killed 51 workers in 2005 and things have only devolved since then. Ten workers died in 2018 at an illegal copper extraction site. In 2019, three mineworkers were burned to death in an underground shaft fire and a landslide at an open-pit copper mine in Zambia killed more than 30 miners in 2023. Despite such horrors, there’s a rush to extract ever more copper in Zambia. As of 2022, five gigantic open-pit copper mines were operating in the country, and eight more underground mines were in production, many of which are to be further expanded in the years ahead. With new U.S.-backed mines in the works, Washington believes the Lobito Corridor may prove to be the missing link needed to ensure Zambian copper will end up in green energy goods consumed in the West.
AI Mining for AI Energy
The office of KoBold Metals in quaint downtown Berkeley, California, is about as far away from Zambia’s dirty mines as you can get. Yet, at KoBold’s nondescript headquarters, which sits above a row of trendy bars and restaurants, a team of tech entrepreneurs diligently work to locate the next big mine operation in Zambia using proprietary Artificial Intelligence (AI). Backed by billionaires Bill Gates and Jeff Bezos, KoBold bills itself as a green Silicon Valley machine, committed to the world’s green energy transition (while turning a nice profit).
It is in KoBold’s interest, of course, to secure the energy deposits of the future because it will take an immense amount of energy to support their artificially intelligent world. A recent report by the International Energy Agency estimates that, in the near future, electricity usage by AI data centers will increase significantly. As of 2022, such data centers were already utilizing 460 terawatt hours (TWh) but are on pace to increase to 1,050 TWh by the middle of the decade. To put that in perspective, Europe’s total energy consumption in 2023 was around 2,700 TWh.
“Anyone who’s in the renewable space in the western world… is looking for copper and cobalt, which are fundamental to making electric vehicles,” Mfikeyi Makayi, chief executive of KoBold in Zambia, explained to the Financial Times in 2024. “That is going to come from this part of the world and the shortest route to take them out is Lobito.”
Makayi wasn’t beating around the bush. The critical minerals in KoBold mines won’t end up in the possession of Zambia or any other African country. They are bound for Western consumers alone. KoBold’s CEO Kurt House is also honest about his intentions: “I don’t need to be reminded again that I’m a capitalist,” he’s been known to quip.
In July 2024, House rang his company’s investors with great news: KoBold had just hit the jackpot in Zambia. Its novel AI tech had located the largest copper find in more than a decade. Once running, it could produce upwards of 300,000 tons of copper annually — or, in the language investors understand, the cash will soon flow. As of late summer 2024, one ton of copper on the international market cost more than $9,600. Of course, KoBold has gone all in, spending $2.3 billion to get the Zambian mine operable by 2030. Surely, KoBold’s investors were excited by the prospect, but not everyone was as thrilled as them.
“The value of copper that has left Zambia is in the hundreds of billions of dollars. Hold that figure in your mind, and then look around yourself in Zambia,” says Zambian economist Grieve Chelwa. “The link between resource and benefit is severed.”
Not only has Zambia relinquished the benefits of such mineral exploitation, but — consider it a guarantee — its people will be left to suffer the local mess that will result.
The Poisoned River
Konkola Copper Mines (KCM) is today the largest ore producer in Zambia, ripping out a combined two million tons of copper a year. It’s one of the nation’s largest employers, with a brutally long record of worker and environmental abuses. KCM runs Zambia’s largest open-pit mine, which stretches for seven miles. In 2019, the British-based Vedanta Resources acquired an 80% stake in KCM by covering $250 million of that company’s debt. Vedanta has deep pockets and is run by Indian billionaire Anil Agarwal, affectionately known in the mining world as “the Metal King.”
One thing should be taken for granted: You don’t become the Metal King without leaving entrails of toxic waste on your coattails. In India, Agarwal’s alumina mines have polluted the lands of the Indigenous Kondh tribes in Orissa Province. In Zambia, his copper mines have wrecked farmlands and waterways that once supplied fish and drinking water to thousands of villagers.
The Kafue River runs for more than 1,500 kilometers, making it Zambia’s longest river and now probably its most polluted as well. Going north to south, its waters flow through the Copperbelt, carrying with them cadmium, lead, and mercury from KCM’s mine. In 2019, thousands of Zambian villagers sued Vedanta, claiming its subsidiary KCM had poisoned the Kafue River and caused insurmountable damage to their lands.
The British Supreme Court then found Vedanta liable, and the company was forced to pay an undisclosed settlement, likely in the millions of dollars. Such a landmark victory for those Zambian villagers couldn’t have happened without the work of Chilekwa Mumba, who organized communities and convinced an international law firm to take up the case. Mumba grew up in the Chingola region of Zambia, where his father worked in the mines.
“[T]here was some environmental degradation going on as a result of the mining activities. As we found, there were times when the acid levels of water was so high,” explained Mumba, the 2023 African recipient of the prestigious Goldman Environmental Prize. “So there were very specific complaints about stomach issues from children. Children just really wander around the villages and if they are thirsty, they don’t think about what’s happening, they’ll just get a cup and take their drink of water from the river. That’s how they live. So they’ll usually get diseases. It’s hard to quantify, but clearly the impact was there.”
Sadly enough, though, despite that important legal victory, little has changed in Zambia, where environmental regulations remain weak and nearly impossible to enforce, which leaves mining companies like KCM to regulate themselves. A 2024 Zambian legislative bill seeks to create a regulatory body to oversee mining operations, but the industry has pushed back, making it unclear if it will ever be signed into law. Even if the law does pass, it may have little real-world impact on mining practices there.
The warming climate, at least to the billionaire mine owners and their Western accomplices, will remain an afterthought, as well as a justification to exploit more of Africa’s critical minerals. Consider it a new type of colonialism, this time with a green capitalist veneer. There are just too many AI programs to run, too many tech gadgets to manufacture, and too much money to be made.
Indebted middle-income countries like Ukraine should not be expected to subsidize IMF lending when better alternatives exist. And the U.S. has more than enough influence to help the international lending body change course on these counterproductive policies.
The United States has a chance to save Ukraine billions of dollars, and at no cost to U.S. taxpayers, by pushing for an end to the unfair and harmful surcharge policy of the International Monetary Fund (IMF).
The IMF is currently reviewing this surcharge policy, which hits Ukraine—and other highly indebted borrowers like Kenya, Ecuador, Argentina, Barbados, and Egypt—with additional charges on top of standard interest and service fees. Human rights and development experts consider surcharges to be counterproductive and contrary to international human rights law. The IMF should take this opportunity to permanently end its surcharge policy for highly indebted borrowers.
Surcharges are penalty fees levied on middle-income countries with high levels of IMF debt. There are two types of surcharges exacted by the IMF: level-based surcharges and time-based surcharges. Level-based surcharges add 2 percentage points in fees to a country’s outstanding IMF credit when it surpasses 187.5% of a country’s quota to the Fund. Time-based surcharges add another percentage point of fees when a country’s IMF debt exceeds this threshold for over 36 or 51 months, depending on the lending facility. Some countries, including Ukraine, are paying both surcharges, amounting to an additional 3% points of fees.
In Ukraine’s case, surcharges will add nearly $3 billion to the war-ravaged country’s debt burden over the next decade even as it needs an estimated $9.5 billion in emergency financing for recovery and reconstruction just this year.
The IMF and Treasury Secretary Yellen have previously claimed that surcharges incentivize timely repayment to the IMF. However, countries are struggling to repay the IMF due to exogenous shocks, not a lack of appropriate incentives. Surcharges are counterproductive as they push countries facing crises—including war, the COVID-19 pandemic, and climate disaster —further into debt. It is no coincidence that, prior to the pandemic, only eight countries were paying IMF surcharges; today 23 countries are paying these fees.
In Ukraine’s case, surcharges will add nearly $3 billion to the war-ravaged country’s debt burden over the next decade even as it needs an estimated $9.5 billion in emergency financing for recovery and reconstruction just this year. Experts say efforts to relieve Ukraine’s debts could change the course of the war. Ukraine recently reached a much-needed deal to restructure its debts. Keeping surcharges in place would diminish the benefits of this restructuring, as it sends $3 billion that could be spent on recovery, reconstruction, and defense back to the IMF. Surcharges have already cost Ukraine $621 million between 2018 and 2023. Discontinuing surcharges would save Ukraine billions of dollars in its hour of need.
Following intense criticism of surcharges by leading economists, developing countries, and U.S. members of Congress, the IMF announced earlier this year that it would carry out a review of the controversial policy. Following consultations with IMF stakeholders— in particular, the US Treasury Department—the Fund is expected to announce the results of its review, and any recommendations of changes to the policy, before the IMF’s Annual Meetings in October. It’s worth noting that the IMF has previously recognized the profoundly harmful and counterproductive consequences of similar past policies, moving to discontinue them in 1974, 1981, and 1992.
Yet, among wealthy countries, there appears to be resistance to terminating, or even significantly reforming, the current surcharge policy. It is particularly troubling that much of this resistance appears to be rooted in the hope that the income from surcharges can supplement projected funding shortfalls for the IMF’s Poverty Reduction and Growth Trust (PRGT) facility, which offers low-income countries interest-free and concessional loans. The IMF, the US Treasury, and other observers have previously discussed surcharges as a source of income for IMF lending via the PRGT.
Among wealthy countries, there appears to be resistance to terminating, or even significantly reforming, the current surcharge policy.
Post-pandemic funding needs have depleted PRGT resources and the program is in need of replenishment. It may be necessary for the IMF to increase its lending through the PRGT in response to the growing needs of developing countries. However, squeezing highly indebted countries such as Ukraine to do so would be a perverse solution. These same middle-income countries have also largely been left out of pandemic-related debt relief initiatives and are struggling to recover under the weight of a failing international financial architecture. Funding for the PRGT shouldn’t come at the expense of these countries.
There are better and more effective alternatives to relying on surcharges to fund the PRGT. These include: donations from the U.S. and other advanced economies, gold sales, and changes to the IMF’s internal accounting practices. Surcharges are infinitesimal compared to the IMF’s much-vaunted $1 trillion lending firepower. The IMF has vast reserves of gold that remain largely undervalued. These gold reserves are currently valued at the 1960s rate of approximately $47 per ounce. Valued at current market rates of approximately $2,556 per ounce, the IMF’s gold reserves would be worth $228 billion. The IMF could sell a portion of these reserves or adopt mark-to-market accounting practices to fund the PRGT.
Indebted middle-income countries like Ukraine should not be expected to subsidize PRGT lending when better alternatives exist. A permanent end to surcharges would eliminate an increasingly significant barrier to sustainable recovery in many developing countries. Given that the U.S. holds a de facto veto over IMF policy changes, the stance of the U.S. Treasury Department will be instrumental. Refusing to change the surcharge policy today would be a major missed opportunity for Secretary Yellen and the world.
"We need all countries to honor their promises on climate finance and a strong finance outcome from this year's COP where we will discuss the financial commitments after 2025."
United Nations Secretary-General António Guterres warned in Samoa on Thursday that low-lying Pacific island nations face the threat of "annihilation" from rising sea levels, cyclones, ocean heatwaves, and other dangers driven by human-caused climate chaos.
"High and rising sea levels pose an enormous threat to Samoa, to the Pacific, and to other small island developing states. These challenges demand resolute international action," Guterres said. "Sea levels are rising even faster than the global average, posing an existential threat to millions of Pacific Islanders."
"If we are not able to stop what is happening with climate change, this problem that we see in Samoa will not stay in Samoa."
Recalling the 2009 earthquake and tsunami that killed at least 192 people and devastated Samoa, Guterres said that "we have seen people that moved their houses inland, we have seen people that persisted coming back and rebuilding, we have seen an enormous determination of people to fight against, not only the impact of the tsunami, but the impacts of the rising sea levels and of the storms and the cyclones."
"I've seen a wall that is protecting a village from the sea; that wall in 20 years, because of the tsunami—because of the rising sea level, and because of the heavy storms—has already been built three times," he continued.
"People are suffering. Economies are being shattered. And entire territories face annihilation," Guterres stressed.
Guterres said Samoans' ambitious plans to tackle the "existential threat for millions" are being impeded by a lack of promised funding from rich nations. He pointed to the Loss and Damage Fund, agreed to in 2022 at the U.N. Climate Change Conference (COP27) in Egypt, as well as rich countries' 2021 pledge to double climate adaptation funding to $200 billion.
"We are fighting hard for climate justice," said Guterres, but "we are not seeing the money that is needed and that's why we ask for the reform and the international financial institutions in order for the funding needs of countries, like Pacific countries, to be met."
"We need all countries to honor their promises on climate finance and a strong finance outcome from this year's COP where we will discuss the financial commitments after 2025," he added.
COP29—which has been criticized by green groups for being chaired by a former oil executive—is set to take place in Baku, Azerbaijan in November.
Low-lying Pacific island nations are among the least responsible for the climate emergency but are among the most adversely affected by the crisis. To help address this, Guterres reiterated his call for small island nations like Samoa to have access to $80 billion in development from special drawing rights (SDRs), which are reserve assets controlled by the International Monetary Fund that can be exchanged for cash. Rich countries can also place SDRs in a fund for developing nations' use.
The secretary-general also said that new income streams are key to the survival of nations like Samoa whose tourism industries were devastated by the Covid-19 pandemic and which "have not received the support of the international community."
"If we are not able to stop what is happening with climate change, this problem that we see in Samoa will not stay in Samoa," Guterres warned. "It will be happening more and more everywhere in all coastal areas, from New York to Shanghai, from Lagos to Bangkok."
"They refuse to become another laboratory for neoliberalism—impoverished, beaten, or killed for the benefit of foreign corporations and their lackeys in the Kenyan government."
Progressive International on Thursday applauded the people of Kenya for taking to the streets en masse to defeat an International Monetary Fund-backed legislative package that would have hiked taxes on ordinary citizens as part of an effort to repay the government's powerful creditors.
"Pushed through at the behest of the International Monetary Fund, the World Bank, and the U.S. State Department, the bill would impose severe austerity measures and crippling taxes on Kenya's working people, who are already strained by Kenya's legacy of colonial underdevelopment," Progressive International said in a statement.
"The Progressive International stands firmly with the people of Kenya," the organization added. "They refuse to become another laboratory for neoliberalism—impoverished, beaten, or killed for the benefit of foreign corporations and their lackeys in the Kenyan government."
The Kenyan government's proposal, welcomed by the IMF as necessary for "debt sustainability," triggered massive youth-led protests in the nation's capital last week as thousands of citizens already immiserated by sky-high living costs flooded the streets to express outrage at the U.N. financial institution and their government for fueling the crisis.
The government crackdown was swift and deadly, with police using tear gas and live ammunition to beat back demonstrators calling for the withdrawal of the proposed bill and the resignation of President William Ruto, who took office in 2022.
Protesters achieved one of their objectives Wednesday when Ruto announced he would not sign the tax legislation, just days after he
ordered the country's military to help suppress the demonstrations.
"Listening keenly to the people of Kenya who have said loudly that they want nothing to do with this finance bill, I concede, and therefore, I will not sign the 2024 finance bill, and it shall subsequently be withdrawn," Ruto said in an address to the nation, which spends more than a quarter of its revenue on debt interest payments.
"The protesters we have been speaking to are still very angry, still very frustrated, they hold the president responsible for the deaths of those young Kenyans across the country."
As The Associated Press reported, the withdrawn measure would have "raised taxes and fees on a range of daily items and services, from egg imports to bank transfers."
Kenya's public debt currently stands at $80 billion, around $3.5 billion of which is owed to the IMF—an explicit target of protesters' ire.
"Kenya is not IMF's lab rat," declared one demonstrator's sign.
The IMF said in a brief statement Wednesday that it was "deeply concerned" about the "tragic events" in Kenya and claimed its "main goal in supporting Kenya is to help it overcome the difficult economic challenges it faces and improve its economic prospects and the wellbeing of its people."
“Kenya is not IMF’s lab rat”
“I was in my healing era” pic.twitter.com/xLt2GG51hf
— Larry Madowo (@LarryMadowo) June 20, 2024
As Bloomberg's David Herbling wrote over the weekend, Ruto "has spent his first two years in office ramming through a slew of unpopular taxes—on everything from gasoline to wheelchair tires, bread to sanitary pads—thrilling international investors and the IMF, which has long urged Kenya to double its revenue collections to address its heavy debt burden."
Ruto's withdrawal of the tax-hike bill appeared unlikely to fully quell mass discontent over the president's IMF-aligned economic policies as protests continued on Thursday.
"The protests today are not as big as they were two days ago but they are still no less intense where they are happening," Al Jazeera's Zein Basravi reported from Nairobi. "If President Ruto, protesters say, had signed off on killing the tax bill 72 hours ago, a week ago, these protests might not be happening. But the decision he made, the concession, has come too little too late, and it has not gone far enough, and it has come at the cost of too many young lives."
"The protesters we have been speaking to are still very angry, still very frustrated, they hold the president responsible for the deaths of those young Kenyans across the country, 23 killed," Basravi added. "And they hold Parliament responsible for not standing stronger, standing firmer, against the president as they feel he was overreaching his position."
U.S. Rep. Ilhan Omar (D-Minn.) said in a statement Wednesday that it is "crucial to recognize that the International Monetary Fund's austerity conditions have contributed to the economic hardships facing Kenyan citizens."
"These measures often disproportionately affect the most vulnerable populations and can exacerbate social unrest," continued Omar, who chairs the U.S.-Africa Policy Working Group. "It is imperative that protesters remain peaceful as they continue to demand change. I stand in solidarity with the people in the wake of both state violence and IMF-imposed austerity measures."
"The Kenyan government must immediately disclose the location and condition of all those who have been taken into custody or disappeared, cease the use of excessive force, respect the right to peacefully protest, and continue to engage in meaningful dialogue to address the legitimate concerns of its citizens," Omar said.