Description
The Polycrisis, which includes the Covid-19 shock, surging inflation, and spillovers of a war in Europe, is both devastating and unique especially for emerging market developing economies or EMDEs. Nascent analyses of this situation frame it as an issue of an outdated Bretton Woods system. But such perspectives overlook the issue of agency in EMDEs. There is a substantial literature that is critical about the capacity of international institutions to address global systemic risks, particularly in the form of policy reports from organisations such as UN-DESA and Eurodad. But to date, there has been limited discussion, particularly from a global political economy lens, about what individual countries can do and have done to escape their adverse incorporation into global governance structures. Our study of Pakistan speaks to this gap. We argue using a case study approach, that the PTI government elected to power in 2018 was undermined in its efforts to resist these structures. Pakistan’s Polycrisis is exacerbated by (1) inflationary austerity imposed by the Bretton Woods institutions, (2) international corporate power as reflected in the World Bank-funded International Centre for Settlement of Investment Disputes, (3) the persistent threat of blacklisting from the G-7’s Financial Action Task Force, and (4) the risk of downgrades from international credit rating agencies which impede considerations about debt restructuring. Our analysis shows how these institutions have, in the case of Pakistan, curtailed the agency to resist the Polycrisis. Our emphasis is on how institutions of global governance advance ‘business as usual’ through their outsize influence on market signals. Our concluding section explains how these mechanisms ensure that the Polycrisis has more dire consequences for some countries, relative to others.
