3 November 2026 2:07 pm
UNDP in Yemen rolls out its early recovery programming

UNDP in Yemen rolls out its early recovery programming

Nov 2, 2026

Aerial view showcasing the traditional architecture of a historic town in Yemen with iconic towers and desert landscape. by Mohammad Hadi via Pexels

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UNDP in Yemen rolls out its early recovery programming in conflict impacted areas

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UNDP  –  November 1, 2026

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Photo: UNDP Yemen

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Republic of Yemen – The United Nations Development Programme (UNDP) is rolling out its early recovery programming in Yemen.

As displacement continues to increase, UNDP is moving now to protect livelihoods, restore essential local systems and enable locally led recovery in Yemen.

In March 2026, UN reports estimated that 22.3 million people required humanitarian assistance, including 5.2 million who were internally displaced across Yemen. An additional 280,000 people have been displaced since the beginning of August. Lifesaving humanitarian assistance remains critical, and early recovery work complements it by supporting the services, livelihoods, and local systems people rely on.

Local authorities and institutions are working hard to meet rising needs with overstretched resources, and host communities, despite their own dwindling means, continue to show remarkable generosity in welcoming those who have been forced to move.

“Development cannot wait for stability; it creates it. Alongside lifesaving humanitarian assistance, early investment in essential services, livelihoods, institutions and systems helps respond to communities’ needs, reduce vulnerabilities and build the foundations for recovery. UNDP is already acting.” 

Noura Hamladji, UNDP Yemen Resident Representative

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UNDP is already acting

UNDP has committed US$1 million from its core resources to the Yemen Rapid Recovery Response (YRRR): Emergency Employment and Community Recovery, delivered through local authorities in Aden and Lahj. The initiative will give temporary paid work to around 1,200 displaced people and members of host communities. This support will reach around 7,000 people and rehabilitate priority community assets that serve both groups.

The YRRR is expected to generate around 18,000 workdays, improve 14 km of roads, and protect and rehabilitate 35 hectares of agricultural land. Planned interventions include road paving, drainage, waste removal, greening, irrigation channel rehabilitation, and agricultural protection.

Beyond this immediate initiative, UNDP is in the process of scaling up its interventions, where mandates, access, and donor agreements permit, to extend this support. Together, these efforts will allow us to reach more than one million people and 1,500 local authorities and institutional actors.

Development from day one

An initial UNDP assessment projects around half a million potential internally displaced persons over a one-year period, adding to the strain already on public services and host communities. Acting early is how we mitigate needs from multiplying.

The objective is not a linear transition from humanitarian assistance to development. It is a coherent approach that connects lifesaving support, early recovery and longer-term development from the outset. Without early investment, displacement and vulnerability risk becoming more protracted, humanitarian needs will deepen and hard-won development gains will be lost.

Immediate early recovery response and institutional continuity

Building on and expanding UNDP’s existing area-based programmes requires US$35 million in financing. The response covers emergency employment, essential services, livelihoods and support for vulnerable women, while addressing displacement, productive capacity and community resilience. It is estimated to reach around 2.5 million people.

Early recovery investments are only as effective as the systems they connect to. Through existing resources and the continuation of ongoing programmes, UNDP continues supporting national efforts to preserve Yemen’s core delivery systems.

“Every dollar invested early in livelihoods, services and institutions reduces the humanitarian needs of tomorrow. We call on partners to join us in scaling up early recovery now, so that communities can recover, institutions can deliver and the gains of years of investment are not lost.” 

Noura Hamladji, UNDP Yemen Resident Representative

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UNDP will continue to work alongside authorities, humanitarian partners, and communities across Yemen, ensuring that lifesaving assistance, early recovery and development reinforce one another.

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The Twilight of Oil in an Age of Uncertainty: Regional Analysis

The Twilight of Oil in an Age of Uncertainty: Regional Analysis

Oct 31, 2026

Dramatic aerial twilight view of Riyadh city skyline with lit streets. by Abul Lais via Pexels

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The Twilight of Oil in an Age of Uncertainty: From a Vicious to a Virtuous Cycle

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The global hydrocarbon order is changing. Economic diversification and developing productive economies have become essential for Middle Eastern and North African states, requiring them to address social and political challenges and rethink domestic, regional, and global settlements.

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By Nur Arafeh, Ishac Diwan, Hamza Meddeb, Marwan Muasher
Malcolm H. Kerr Carnegie Middle East Center – Published on Oct 30, 2026

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The Middle East and North Africa (MENA) region has been a major producer and exporter of hydrocarbons since the 1930s. In 2025, around 30 percent of global hydrocarbon exports originated in the MENA region, with collective regional revenues amounting to over $1 trillion.1 Since 2000, when the second oil boom began (the first being in October 1973), MENA has sold $25 trillion worth of oil and gas (adjusted for 2025 prices). As demonstrated by the conflict between the United States and Iran, events in the region remain consequential for international energy markets. But equally, hydrocarbons have shaped the region’s economies, governance structures, and societies in ways that now define the nature of the challenge ahead.

The challenge in question is one of fundamental economic transformation. The global hydrocarbons order is facing profound change, as environmental and geopolitical pressures undermine the foundations on which many MENA economies have rested. In this context, economic diversification is no longer optional; it has become both strategic and urgent. Yet diversification is not merely a technical exercise. It brings with it at least three types of fundamental and interconnected challenges. The first is economic, and involves countries determining how to increase their labor productivity and build sustainable productive capacity outside hydrocarbons in economies long structured around resource rents. The second challenge is social and political, affecting how to renegotiate social contracts that support more inclusive societies. The third is regional, where the success or failure of transformation will depend not only on domestic reform, but on whether a more stable regional order can emerge, one in which economic cooperation prevails over conflict, fragmentation, and escalating tensions. Escaping the current vicious cycle and turning it into a virtuous one is essential for the region’s future.

This paper does not offer a single prescription and acknowledges that the MENA region encompasses countries at very different stages of development, with very different resource endowments, institutional capacities, and political settlements. The analysis focuses on three groups of countries: high-income hydrocarbon exporters (Gulf Cooperation Council (GCC) countries), middle-income hydrocarbon exporters (Algeria, Iraq, Libya, and Iran), and middle-income hydrocarbon importers (Egypt, Jordan, Lebanon, Morocco, and Tunisia). We offer an integrated approach to the economic, political, and regional dimensions of the diversification imperative and the need to strengthen productivity, as well as policy recommendations organized around the five key questions that structured the commission’s deliberations.

The first question is the most fundamental one: Why must MENA countries diversify, and why now? For all the countries examined here, the answer is that, for various reasons, the demand for hydrocarbons is falling in a world shaped by a volatile energy transition and a pressing imperative of energy security. This will inexorably reduce oil and gas exports and revenues over the medium to long term, sharply constraining these countries’ access to foreign exchange and deepening their fiscal pressures. Many of the hydrocarbon exporting countries understand therefore that, because they will not be able to finance employment of their growing labor force in the public sector, they must immediately begin investing in productive jobs if they are to meet future challenges. Energy importers face a different challenge: They realize that it will be impossible in the coming years to export carbon-intensive manufactured goods to Europe as carbon border adjustment mechanisms and other environmental regulations take effect. The war with Iran has exacerbated such tensions. For one thing, oil revenues will fall more rapidly, implying a need to diversify more rapidly. Additionally, the war is likely to force changes in the way in which diversification takes place. The oil importing countries, especially Egypt, Jordan, and Lebanon, will sustain indirect losses, which is one more reason why they need to try harder to improve their labor productivity through growth-enhancing reforms.

The second question concerns the current state of play: What is the situation when it comes to diversification efforts in the MENA region? The picture is highly uneven:

  • GCC countries are heavily engaged in investing in productivity and diversification, but the results remain mixed. The most dynamic sectors have been oil products, entrepôt trade, tourism, hospitality, entertainment, and more recently renewables and artificial intelligence (AI) centers.2 However, generating productive jobs has been challenging, and the globally oriented model that underpins Gulf diversification strategies is threated by regional instability. The ability of the GCC countries to navigate a turbulent global energy transition is also in jeopardy.
  • Among the middle-income hydrocarbon exporters (Iraq, Algeria, Libya, Iran), the pattern is one of rent consumption rather than investment. Productivity growth is absent, rent per capita is falling, and there is as yet no credible exit path from this trajectory.
  • Middle-income hydrocarbon importers present an equally troubling picture, as they have been stuck in a severe form of the middle-income trap: They are operating below potential, with fragile social and financial situations, and are failing to pursue growth-enhancing reforms. Savings are low, as is investment, underemployment is rampant, and these countries each face a brewing debt crisis, while state services have been severely rolled back. The main problem is an unbalanced form of capitalism dominated by a closed economic elite that is unwilling to allow space for competition from firms not under its control. Political connections are based on loyalty, not productivity, which represents a key obstacle to transformation.

The third question is political. What are the social and political implications of the current trajectory? Across the MENA region, the social contracts that offered material provision in exchange for political acquiescence are under mounting strain. The generation now entering the labor market is better educated than its predecessors, holds higher aspirations, and has grown up with direct exposure to different global living standards. However, it also faces higher unemployment than preceding generations, deteriorating public services, and more precarious labor markets. The nature of this strain diverges across country groups, reflecting fundamentally different distributional bargains. In the GCC, the rentier bargain is being restructured through nationalization of the labor force and subsidy reform, generating grievances with few formal outlets to express them.3 In middle-income hydrocarbon exporting countries, revenues sustain narrow patronage networks, but cannot finance mass consumption or broad legitimacy. In hydrocarbon importing states, such as Egypt and Jordan, external geopolitical rents that once underpinned the social contract are being eroded, leaving governments with shrinking fiscal space and facing rising social instability.

What unites all three country groups is the dilemma of how to deal with the fact that the reforms needed to build productive diversified economies are politically costly in the short run, even as inaction is economically unsustainable in the long run. Faced with this dilemma, governments have responded across the board by centralizing power and intensifying control, either to manage reform (in the case of the GCC countries) or avoid it (in the case of other states, such as Algeria, Egypt, Jordan, and Tunisia). However, this approach is straining the very foundations on which a durable economic transformation must rest—rule of law, investor confidence, legitimate channels for objection. The difficulties reformist politicians are facing are complex. They must propose attractive reforms that generate support from a coalition of reformist parties or pressure groups, create mechanisms that compensate losers and bring them into the fold, put in place checks and balances to avoid costly mistakes and learn from experience, and finally permit the voicing of grievances to avoid the type of explosion that was common during the decade of Arab uprisings.

The fourth question concerns the external environment. How do regional and global dynamics shape, and potentially undermine, diversification efforts? Falling hydrocarbon revenues will intensify regional competition in the oil and gas market if it is not matched by improved regional cooperation, as countries seek to defend their share of a shrinking market. This reality has become more acute since the beginning of the war with Iran, which dampened global appetite for Gulf oil and gas due to elevated perceived risks. Moreover, increased insecurity has also disrupted Gulf diversification strategies in areas that are highly sensitive to security conditions—foreign direct investment, tourism, or trade.

In this more volatile environment, countries need to imagine growth paths that are more resilient to shocks and less likely to generate them. This requires building regional economic interdependencies, which today remain underdeveloped. It would mean expanding intraregional trade and investment, advancing a regional security architecture that reduces business risk and lessens reliance on any single external guarantor, and diversifying external economic relationships in a world increasingly organized around geopolitical blocs. To be able to sustain diversified relations, stronger regional bargaining power helps. This could come in the form of more robust soft power derived from better management of regional public goods such as defending the environment, improving security, caring for refugees, and preventing states from failing. There are other arguments for improved regional cooperation in the form of the growth of a regional market: the need to bring some accumulated savings in the form of globally placed Sovereign Wealth Funds’ assets closer to home, given rising expropriation risks; the fact that environmental challenges are regional; and the advisability of preserving and diversifying regional trade routes.

The fifth and final question is a holistic one: How do these elements interact, and under what conditions can the region move from a vicious to a virtuous cycle? The elements discussed above can interact positively or negatively. The status quo increases regional tensions, political risk, and doom loops—or self-reinforcing cycles that exacerbate problems—of economic decline and violence. The overlapping aspects of the transition—economic, social, political, and environmental—create structural tensions, but progress on one front can create momentum for broader reforms and a virtuous cycle that facilitates progress:

  • A regional security deal would be much enhanced by regional economic cooperation. Moreover, the financial rates of return to the region of sovereign wealth fund investment would be greater if invested in large rather than small markets. Cooperation is also needed to fight climate change.
  • The ability to implement industrial policy to develop new value chains in a secure regional environment would enable the region to bargain for a fairer role in a fragmented world order.
  • Reduced regional instability and the development of a regional market would create positive incentives for recalcitrant regimes to invest in growth, especially in middle-income countries.

Read the whole article from the Carnegie Endowment for International Peace.

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Strategic Sustainability Regimes: Key Findings and Trends

Strategic Sustainability Regimes: Key Findings and Trends

Oct 26, 2026

A hand holding an antique key. by Mikhail Nilov via Pexels

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Strategic Sustainability Regimes: Configurations of National Sustainability Conditions

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WILEY Online Library / First published: 26 October 2026
https://doi.org/10.1002/sd.71824Digital Object Identifier (DOI)

ABSTRACT

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Sustainable development is increasingly recognized as a complex strategic challenge requiring the coordination of social, environmental, and institutional dimensions. This study adopts a configurational perspective to identify distinct strategic sustainability regimes across countries. A country-only balanced panel of 166 countries covering 2000–2023 (3984 country-year observations) was reconstructed from two Sustainable Development Report files. Gaussian mixture model (GMM) clustering was applied to long-run country averages for Goals 1, 3, 13, and 16 in a 150-country clustering sample. Fixed-effects panel models provided complementary longitudinal evidence, and robustness tests included alternative clustering methods, repeated 80% subsampling, and an extended sensitivity specification for Goals 8, 9, and 12. Four strategic sustainability regimes were identified: Capacity-Constrained, Emerging Transitional, Balanced Transitional, and High-Capability. Broader sustainability performance rises monotonically across these regimes, revealing a pronounced social–institutional development gradient alongside compositionally distinct profiles. Goal 13 follows an inverse cross-regime pattern and remains statistically non-significant in the fixed-effects models, indicating that climate-related SDG performance captures a structurally distinct dimension whose meaning depends in part on emissions, consumption, energy use, industrial structure, and development stage. The four-regime solution is reasonably stable but not invariant to method or construct specification. The study contributes to the strategic management and sustainability literature by extending configuration theory to the national level and identifying heterogeneous national sustainability profiles. For firms and MSMEs, these regimes are interpreted as macro-level opportunity and constraint environments; extended Goal 12 sensitivity analysis acknowledges the responsible-consumption dimension, although green consumer behavior is not directly measured.

1 Introduction

Sustainable development has become one of the most complex strategic challenges facing countries in the twenty-first century. Since the adoption of the United Nations 2030 Agenda, governments have been expected not only to improve performance on individual Sustainable Development Goals (SDGs) but also to coordinate multiple social, environmental, and institutional priorities simultaneously (United Nations 2015; Breuer et al. 2019; Fu et al. 2019). The SDGs also represent a novel governance mechanism that seeks to coordinate multiple policy domains through integrated goal-setting processes (Biermann et al. 2017). Countries must align diverse development priorities amid uncertainty, resource constraints, institutional heterogeneity, and competing policy demands (Bejaković 2019). As a result, sustainability performance is increasingly related to how countries combine multiple observed development conditions, rather than to improvements in isolated indicators.

Despite the growing importance of sustainability, much of the existing literature continues to evaluate national performance through ranking systems, composite indices, dashboard approaches, or analyses of pairwise SDG interactions (Le Blanc 2015; Nilsson et al. 2016; Swain and Ranganathan 2021). Although these approaches have generated valuable insights into progress toward the SDGs and the interdependencies among development goals, they remain largely variable-centered and provide a limited understanding of recurrent combinations of multiple development dimensions. Consequently, countries are typically positioned along a single performance continuum despite substantial differences in governance quality, social development, environmental performance, and policy implementation capacity. Consistent with configuration theory, coherent combinations of interdependent factors provide a useful lens for examining such multidimensional differences (Fiss 2011; Ault and Spicer 2021). However, clustering alone does not establish equifinality, complementarity, or configurational causation.

This argument reveals an important gap in the existing literature. Although sustainability transitions research recognizes the existence of multiple transition pathways and long-term systemic change processes (Markard et al. 2012; Köhler et al. 2019), and institutional scholarship emphasizes the role of governance quality in shaping development outcomes (Gupta and Vegelin 2016; Kern and Rogge 2019), relatively few studies have integrated these perspectives within a configuration-based strategic management framework. Existing research has documented the importance of institutions, poverty reduction, health performance, and environmental conditions for sustainable development (Barbier and Burgess 2017; Sachs et al. 2023). However, the literature still offers a limited understanding of how these dimensions combine to form distinct sustainability regimes and how such configurations shape broader sustainability performance across countries.

Addressing this gap is important for both theory and practice. From a theoretical perspective, sustainability research risks remaining fragmented across isolated indicators and disconnected policy dimensions if profile heterogeneity is ignored (Heinrichs and Biermann 2016). Accordingly, this study contributes to the strategic management and sustainability literature in three ways. It introduces a configurational perspective to national sustainability research, examines recurrent combinations of observed sustainability conditions, and combines Gaussian Mixture Model clustering with longitudinal panel analysis within a unified empirical framework. At the micro level, national institutional and social conditions may shape the regulatory pressures, financing, infrastructure, skills, and market demand that firms and MSMEs encounter, while eco-literacy and sustainability education remain plausible mechanisms that warrant direct testing (Madhavaram and Nirjar 2025; Suwono et al. 2026). Development and industrialization can also improve social and institutional foundations while affecting emissions, consumption, and energy use, creating a development–climate tension that simple rankings may obscure (Sachs et al. 2024).

Based on this logic, the study addresses the following research questions:

  1. Do countries exhibit distinct strategic sustainability regimes based on their observed social, environmental, and institutional profiles?
  2. What combinations of social development, environmental performance, and institutional capacity characterize these regimes?
  3. How are the dimensions used to identify strategic sustainability regimes associated with broader sustainability performance over time?

Unlike previous SDG studies that primarily classify countries by overall sustainability performance, this study combines Gaussian Mixture Model clustering with a complementary fixed-effects panel analysis. This integrated design provides profile-based and longitudinal evidence to understand heterogeneous sustainability patterns, without treating cluster membership as evidence of equifinality or causal configurations.

Read more on the original publication  WILEY Online Library

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Annual Meetings 2026 for Preserving Sovereignty Overview

Annual Meetings 2026 for Preserving Sovereignty Overview

Oct 23, 2026

Interior view of the Swiss Parliament Building in Bern, showcasing its grandeur and Swiss heritage. by Christian Wasserfallen via Pexels

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Annual meetings 2026: preserving sovereignty in a changing world

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By / OMFIF – 22 October 2026

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Diversifying sources of growth and security for resilience

Persistent energy shocks, record public debt and the rapid rise of artificial intelligence defined the agenda at this year’s International Monetary Fund-World Bank annual meetings in Bangkok, Thailand.

Throughout the week, discussions circled around one main challenge: sustaining growth while rebuilding the capacity to withstand future shocks. Across eight events on the sidelines of the official meetings, OMFIF explored what this requires in practice. From southeast Asia’s infrastructure needs to reserve management and digital money, a key topic emerged. Countries need to diversify their sources of growth and security while preserving sovereignty, stability and public trust.

Investing in resilience

One OMFIF roundtable in Bangkok took in account the location of the annual meetings this year and sought to examine southeast Asia in a changing economy. Southeast Asia exemplifies both strong recovery and underlying vulnerabilities. Regional growth has remained resilient despite elevated energy costs, supported by solid economic fundamentals that have endured successive disruptions since the Covid-19 pandemic. However, overlapping supply shocks continue to test this resilience. Rising energy pressures increase production and transport costs, while the impacts of El Niño threatens agricultural output. Higher fertiliser costs and disruptions to rice production can contribute to food inflation, complicating efforts to sustain growth without letting price pressures become entrenched.

The effects of these shocks will differ across economies, making a uniform policy response inappropriate. Scenario analysis is crucial to assess potential consequences for growth and inflation, including impacts extending into 2027. While advance warning gives governments time to prepare, repeated shocks have depleted the fiscal buffers needed for an effective response. Central banks also face challenging transmission conditions. Fiscal dominance can undermine monetary policy, making institutional independence vital when governments’ financing needs compete with price stability.

Rebuilding resilience therefore requires investment that reduces exposure to future disruptions, particularly in energy, climate and digital infrastructure, with regional co-operation offering opportunities to share resources and improve effectiveness. Shared infrastructure can make projects more effective, but mobilising capital requires coordination between governments, development institutions and private investors. A shortage of bankable projects and regulatory obstacles remain key constraints. Connecting institutions with technical expertise to project developers could help turn investment demand into financeable assets.

Energy security illustrates the necessary trade-offs. Diversifying supplies and expanding renewables can reduce dependence on individual sources, but both require significant infrastructure and expenditure. Volatility may persist even after immediate crises subside, demanding careful examination of the commercial case. Public efforts to reduce risk must be matched by private investors willing to assess and assume it. Meanwhile, AI is reshaping investment priorities, drawing attention to technology and changing how capital is allocated across development needs.

Diversifying to sustain resilience

The challenge of reducing dependence while managing costs extends from energy systems to national balance sheets. For reserve managers, diversification increasingly involves consideration of sanctions, political relationships and operational continuity alongside conventional financial risks. Shocks – once seen as remote possibilities – are now frequent concerns. However, abrupt portfolio changes should be avoided. Liquidity remains essential, especially when reserves must be available quickly to meet external obligations or stabilise markets during periods of stress.

These realities limit how quickly portfolios can adjust. Trade relationships may shift faster than financial markets, while foreign exchange liquidity and dollar-denominated public debt continue to shape reserve needs. A seemingly diversified portfolio could still leave a country exposed if its assets do not match its liabilities. Therefore, understanding whether a source of stress is temporary or structural is essential before changing reserve composition.

Greater choice nevertheless offers opportunities to strengthen financial autonomy. Sovereign interest in euro borrowing and engagement with investors across multiple markets can support diversification. Europe’s efforts to integrate savings and investment markets and reduce legal barriers are also significant. Developing local-currency debt markets offers another path to greater financial autonomy. These changes require time and depend on credibility, macroeconomic management and adequate fiscal space. As with energy investment, diversification contributes to sovereignty when it creates reliable options at a manageable cost.

Preserving trust as money evolves

The same balance between greater choice and dependable foundations runs through the debate on digital money. New payment instruments may reduce reliance on costly or fragmented systems, but they also raise questions about who provides the infrastructure and anchors confidence. In a roundtable in collaboration with Giesecke+Devrient, discussions of central bank digital currencies, also described as tokenised central bank money, and private payment instruments centre on where innovation could improve existing arrangements while preserving monetary stability.

Cross-border payments offer a clear opportunity. Limited interoperability, high costs and fragmented infrastructure impede transactions and trade, for example within Africa. Better connections could support the economic relationships on which diversification depends. However, the appropriate approach varies with existing infrastructure. For example, the Bank of Korea has emphasised wholesale applications against a backdrop of already efficient domestic payment infrastructure, while Thailand has pursued regulated experimentation with stablecoins and retail digital money. Across these examples, interoperability with legacy systems matters as much as technological capability. Innovation must provide practical improvements while preserving the central bank’s role in monetary and financial stability.

Digital efficiency also raises questions about dependence and continuity. If connectivity fails, payments systems must still function. Cash consequently remains part of the discussion. Rising cash in circulation alongside declining transactional use underlines the continuing importance of public money as an anchor of confidence and monetary sovereignty. Central banks retain responsibility for contingency planning even as private providers introduce new services. The relationship between public and private money must evolve in ways that preserve this foundation of trust.

These discussions brought the practical choices facing policy-makers back to the broader IMF-WB agenda. Sustaining growth amid high energy costs, record debt and rapid technological change requires countries to rebuild policy space while investing in future capacity. AI, diversified financing and digital money can support that effort, provided policy-makers weigh their benefits against new dependencies and institutional demands. As economies continue to navigate persistent disruptions, regional co-operation, credible public institutions and trusted financial infrastructure can widen policy choices, helping economies withstand the next shock while continuing to grow.

Andrea Correa is Head of Research at OMFIF.

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The Crises We Face Today Are Far Beyond Established Norms

The Crises We Face Today Are Far Beyond Established Norms

Oct 14, 2026

Desert, summer, sand, travel, dry, camel, Sahara, outdoors, scenic, dune, landscape, nature, sunny, aerial, Dubai, water crises, tourism, Rajasthan, environment, climate change, India, orange water, orange travel, orange landscape, orange desert, orange change, orange sand, Dubai, water crises, water crises, water crises, water crises, water crises, climate change by Bhatigajendra via Pixabay

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Mahmoud Mohieldin, UN special envoy on financing 2030 Agenda: ‘The crises we face today are far beyond our institutions’ capacity’

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By Kasmira Jefford

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The Crises We Face Today Are Far Beyond Established Norms Economist Mahmoud Moheildin, speaking at the Building Bridges sustainable finance summit in Geneva, on 8 October 2026. (Building Bridges 2026)
Economist Mahmoud Moheildin, speaking at the Building Bridges sustainable finance summit in Geneva, on 8 October 2026. (Building Bridges 2026)

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As thousands of finance leaders gather in Thailand for IMF and World Bank meetings, the Egyptian economist warns that tackling today’s biggest development challenges will require looking beyond the existing international financial system to more localised solutions.

Mahmoud Mohieldin has spent much of his career mobilising financing to tackle the world’s greatest development challenges. A former senior executive at the World Bank and at the International Monetary Fund, he became the UN secretary-general’s special envoy on financing the 2030 Agenda in 2020, just as the Covid-19 pandemic began and further derailed progress towards the Sustainable Development Goals (SDGs).

With less than four years left until the 2030 deadline, the goals remain badly off track. Developing countries face mounting debt burdens, while geopolitical tensions have weakened the international cooperation needed to address them. Mohieldin, who served as Egypt’s climate champion ahead of COP27 in 2022, argues that governments must do more to mobilise national resources, attract private investment and reform international financial institutions. In Geneva to attend the Building Bridges finance summit last week, he spoke with Geneva Solutions about the future of development finance, the upcoming climate summit in Antalya, and what it will take to turn global pledges into practical results.

Geneva Solutions: We’re less than four years from 2030, and the UN’s own figures show that only 36 per cent of SDG targets are on track or making moderate progress. At the same time, development financing is under severe pressure. What has gone wrong and what prospects do you see for the agenda beyond 2030?

Mahmoud Mohieldin: The 2026 SDGs report was really disappointing. Politicians tend to blame global economic shocks, from Covid to the wars in Ukraine and the Gulf. But the 2019 update showed that even then, the world was not on track. Instead, I would blame a lack of leadership; a lack of trust in the global system; limited capacity and capital for multilateral development banks to support development finance for developing economies; and finance ministers’ failure to prioritise the SDGs in their budgets. We have also seen excessive borrowing to the point that many countries now spend more on debt service than on education, health, and essential services combined. This kind of political, economic, and fiscal environment doesn’t really help in achieving any kind of meaningful goal for humanity or the planet.  That said, we cannot ignore some notable successes. We also cannot ignore that China declared the end of extreme poverty, the first goal of the SDGs, in 2020. In 2024, India announced the same, and many OECD and Nordic countries have done well on their SDGs.

Development progress will not end in 2030. We need to start the next decade on a better note. This means more mobilisation of finance, more capacity- building and use of technology, and more incentives, including from governments and key economic agents.  Without adequate finance and preparedness, artificial intelligence could become another source of inequality. Higher energy costs also mean more constraints on the public purse, leaving less money for development finance and for education, health and infrastructure.

The additional financing developing countries need is estimated at around $4 trillion annually. Where does that money need to come from?

We keep talking about the huge $4 trillion-a-year bill to achieve the SDGs, but most of it really is infrastructure-related, and here we need to be more innovative. We need a new architecture for infrastructure finance. We have seen a great deal of myopia in terms of priorities, with the private sector crowded out of many essential logistical projects by governments where they should be crowding it in.

In today’s world, it would be ridiculous to borrow to build your next airport or seaport. That should be the job of public-private partnerships through build-operate-transfer schemes or something like that. Borrowing should be reserved for areas the private sector is not ready to engage in and where public-sector budgets lack sufficient funds.

The UN secretary general race is in full swing. The person who takes over on 1 January 2027 will inherit unfinished SDGs and the job of shaping whatever comes after 2030. Candidates have expressed different opinions on what they would do – where do you stand?

The UN’s primary function is peace and security, and we shouldn’t forget the price we pay for war, hostilities, and the trust deficit. We need to strengthen the interlinkages among the UN’s three pillars: security and peace, humanitarian work, and development. Secondly, humanitarian finance and the humanitarian support system require a revolution. It needs to be built based on adequate insurance mechanisms and prior investment in prevention – and that would require a completely different architecture.

And last but not least, we cannot ignore the role of legacy institutions like the World Bank, regional development banks, and national development finance institutions. The UN’s work should be complementary and provide catalytic resources. It can really help by enhancing countries’ capacity to improve their partnerships with development finance institutions and the private sector.

You were Egypt’s UN climate champion ahead of Cop27 in 2022. We’re now just weeks away from the next summit in Turkey. Has there been a political disengagement from climate action as governments prioritise security, energy and the economy?

The climate agenda was, to a great extent, hijacked by some advanced economies, which focused only on mitigation and decarbonisation and forgot the importance of a balanced approach between mitigation and adaptation, as outlined in the Paris Agreement.

Now, Global South countries have started to hold very strong views that climate action should not be distanced from development action. Climate action is development action, just as climate finance is development finance. If you invest in renewables, it supports energy and SDG 7. If you invest in adaptation, this means water, agriculture and food. These are all part of the SDGs.

Second, there was also more preaching and political motivation pushing the climate agenda rather than reliance on science and practical solutions. Now, people are taking a more pragmatic approach, realising that climate solutions are affordable and serve communities affected by climate change. As FT journalist Gillian Tett has aptly described, the world is moving from greenwashing to greenhushing. In the past, people claimed they were doing more on climate action than they really were. Now they might be doing more, but because of concerns in some jurisdictions, like the US, they are doing it in silence.

COP29 put a $300bn annual climate-finance goal on the table for developing countries by 2035, alongside an ambition to scale overall flows to $1.3 trillion. What needs to happen at Cop31 to make these pledges credible?

The story of these pledges, commitments and delivery is really a sad one. Some people claim the previous $100bn commitment was delivered based on some methodology, but because of double, if not multiple, counting, and the use of dedicated funds for purposes beyond climate action, we never achieved it.

My advice to developing economies is to keep at it. We need to keep monitoring commitments and hold those who promise and pledge to deliver. But there are also many things we can do at home, regionally and nationally, to mobilise funding. We should not limit the work to external financing; we definitely need to do a better job of mobilising finance domestically, locally and regionally.

COP31, hosted by Turkey and Australia, faces difficult questions over fossil fuels. Are you pessimistic about the prospects for meaningful progress on the energy transition?

I’m betting not on Cops. I’m betting on technology. Daniel Yergin, an influential scholar, reminds us in his book, The New Map: Energy, Climate, and the Clash of Nations, that the shift from one energy source to another is primarily a function of technology, not declarations.

The cost of producing electricity from solar or wind today is a fraction of what it was ten years ago. That makes people move towards these sources because it makes economic sense. Technology is telling us that, even if you are stubborn today and resist change, it is upon us.

At IMF and World Bank meetings, global policymakers are set to discuss the huge challenges facing developing countries, from rising debt and energy costs to other crises. Can the international financial system respond?

The crises we face today are far beyond our institutions’ capacity. They have a lot to do with the tough geopolitical environment, which does not make cooperative solutions the first option. We are at a low point in international cooperation.

Many reports offer specific, practical solutions to deal with debt crises, but very few have been fully adopted. We are victims of one of the worst geopolitical moments, with the worst deficits in trust in modern history since the Second World War. That has economic and financial implications.

I see solutions becoming more localised, more nationalised and more regional. If we wait for international institutions to do what they did in the past, we will put a burden on them that, given the tough geopolitics, they will not be able to handle.

What reform of the international financial architecture could make the greatest difference to developing countries?

One major reform would concern voice, governance, agency, and even-handedness in the international financial institutions. That would be a good start to build trust. The weight of developing economies and emerging markets today is very different from their weight in 1945. Changes in shareholders’ agreements, voice, influence and representation have not adequately reflected this, despite some slight improvements. We need to make these institutions more representative, well-respected, relevant and fit for purpose. Otherwise, they will become empty shells, and their relevance will diminish over time.

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