ISA International Political Committee
This is the fourth World Perspectives statement produced by ISA since the inauguration of Donald Trump’s second presidency. The last, published on 12 February, commented on where his 2026 US imperialist offensive could lead to next: “Following his successful decapitation and subjugation of the Venezuelan government, his hubris has been turbocharged. At the time of writing, Iran and Cuba are foremost in the list of ‘easy targets’ and allies of Chinese imperialism which he is lining up to go after next.”
At the same time, we made it clear that Trump’s then oh so high-and-mighty posturing would backfire: “his hubris will inevitably lead to miscalculations in every sphere, and military miscalculations are the most costly of all. Trump’s increasingly unbridled aggression, combined with US imperialism’s inability to deploy significant ground troops, is a recipe for new crises and quagmires.” Less than three weeks later, this is precisely what happened when Trump began his calamitous war against Iran.
In June 2026, it is abundantly clear that a turning point in his second administration has been passed. After little more than one year in office, Trump 2.0 has been irreversibly plunged into crisis. His dreams of a place on Mount Rushmore have gone up in smoke. Instead, he will go down in (bourgeois) history as one of the most disastrous US presidents ever. His leadership will forever be associated not with American “greatness” but with the accelerated decline of US imperialism.
However, this does not mean that Trump will just limp through the rest of his presidency as a “lame duck.” After his humiliating defeat in Iran, he has Cuba firmly in his sights as the next appealing “easy target.” In the US itself, his reactionary agenda continues, with the last months marked by historic attacks on the democratic rights of Black Americans in particular.
It is also important to understand that Trump’s problems will not, in and of themselves, push back the international reactionary agenda of the ruling classes, which remains in full swing. Indeed, those among the billionaires and their representatives who are beginning to turn against him are not doing so because of any opposition to his overall program. They backed him not despite his reactionary policies, but because the essence of his reactionary promises was music to their ears. Moreover, a turn to reactionary strongman rule is in many ways a necessary response for the ruling class to the dramatically eroding base of social support for so-called liberal capitalism and all its institutions.
As with all Bonapartist regimes in history, Trump 2.0 was backed by the ruling class to pursue their interests in the midst of a deep crisis of their rule. The senile stupidity of this particular Bonaparte underlines the rottenness of decadent US capitalism and the dearth of political options at their disposal following the terminal crisis of the neoliberal political establishment.
What now has the US capitalist class and many capitalists internationally reeling are the “Frankenstein’s monster” consequences of their gamble on this disastrous president. This includes the economic recklessness which has seen Trump take the world economy to the brink of a slump on not one but several occasions—most recently with the Iran/Hormuz debacle. It also includes, however, the risk of social upheaval and revolt.
For the billionaires, Trump’s rapidly falling opinion poll numbers are far less of a concern than the fact that on his watch, the US has witnessed an historic upsurge in protest and crucially, the return of mass political strike action. And while the Iran war is decisive in the plunging of Trump 2.0 into crisis, it is not the only factor. Only weeks after Trump’s “big win” in Venezuela, his bloody ICE offensive was decisively pushed back by the working class of Minnesota in his first major defeat.
This is the most crucial question for Marxists. In analyzing the descent of Trump’s regime into chaos and crisis, we seek to identify potential openings for increased struggle and organization among the working class and oppressed. Often in history, the weakening of a reactionary regime, accompanied by splits among the ruling class, has increased the confidence of the working class to fight back. As we have often repeated, our perspectives are a guide to action: to help build this fightback, while simultaneously fighting to rebuild the working-class movement on the basis of a revolutionary socialist program.
Two Superpowers in Decline
Another crucial aspect of ISA’s analysis of World Perspectives which must be returned to at this moment of deep crisis for US imperialism is our understanding that the US/China imperialist power struggle sitting at the center of world relations today, is a battle between two superpowers in decline. This differs from the conception of most capitalist commentators, and indeed much of the international left. While most manage to identify US decline, they continue to see Chinese imperialism as, in contrast, a rising power. This misunderstanding breeds different forms of confusion.
At the Xi Jinping-Donald Trump summit in Beijing in May, Xi mentioned the “Thucydides trap,” a metaphor he has also used in meetings with previous US presidents. Thucydides wrote the history of the first 20 years of the 27-year long war between Athens and Sparta 2,400 years ago. The war was fought between a rising Athenian empire and the dominant power, Sparta. Xi’s purpose is both to point out there are also two superpowers today, one in decline and another rising to overcome it, and to claim that he wants to avoid an inevitable war between the two—the “trap” in question.
The main shortcoming in this comparison, however, is that China is no longer rising. The deep and intertwined crises of both the world’s competing superpowers were clearly expressed at the May summit. There, any real discussion about the most contentious issues was avoided, including critical minerals, rare earths, semiconductors, and AI. Both regimes wanted to project “strategic stability,” a key phrase launched by Xi. Trump echoed this, praising the relationship between the “G2” governments and even favorably quoting Xi’s mention of US decline—assuring us that he was referring to the Biden era!
In previous epochs of capitalist history—which have been marked by a succession of conflicts between rising and declining imperialist powers engaged in a constant struggle to redivide the world—blunders as calamitous as those of Trump would be quickly and decisively capitalized upon by major imperialist rivals. Today however, China’s weaknesses have largely prevented it from doing so. It has allowed allies to be bullied and beaten by Trump’s aggression with only words of strong “concern” issued in response, while simultaneously rolling out the red carpet for Trump in Beijing.
While Trump’s growing crises are livestreamed 24:7, the deep crisis in China to a large degree goes under the international radar. For a long period, Chinese economic growth was built on the property sector, which between 2006-2020 built half of all new housing globally. Since then, the sector has fallen from 33% of GDP to 11%, with this collapse continuing. New high profile sectors—EVs, solar panels, batteries, AI—are, despite huge investments, not compensating for this decline. Real growth is stagnating far below official statistics, with unemployment rising to 20% (in reality higher) among youth, and migrant workers leaving the cities because of the complete lack of a social safety net, unemployment insurance, etc. Total debt is equivalent to 330% of GDP, and among the highest in the world in the private sector, according to the IMF.
This is a process of “Japanification”—named after Japan’s 35 years of deflation, low growth and huge debts. In China’s case, we are five years into this phase of crisis. As a bigger, poorer society, with far greater extremes of inequality, caught in a sharp inter-imperialist conflict, the outcome can be significantly worse than in Japan.
This forms the background to the power struggle at the top. In January, general Zhang Youxia, member of the CCP politburo and the country’s highest ranked military leader, was arrested, accused of political crimes such as disloyalty and espionage rather than corruption, the more customary charge in CCP/PLA purges. This follows over 100 top PLA officers being purged since 2023, many of whom had been promoted by Xi to cement his control over the military. However, months after his arrest Zhang Youxia, whose whereabouts are unknown, has still not been formally removed from his positions. This indicates fierce pushback from the army and other elite sectors of the CCP-state. On 7 May, two former defense ministers who were arrested three years earlier in Xi’s purges, generals Wei Fenghe and Li Shangfu, got suspended death sentences for “disloyalty to the party.” This draconian sentencing is about sending a message to the anti-Xi factions in the army, and shows that the power struggle is far from over.
While his catastrophic miscalculation in the Iran war has severely undermined Trump and US imperialism’s position, it is striking how Xi’s regime has been incapable of turning the tables in the inter-imperialist conflict. Trump’s 2025 tariff war resulted in a “truce,” agreed in South Korea in October, with 30% tariffs on US exports to China and 47% on Chinese exports to the US.
Despite both sides’ wish for a period of de-escalation, there can be no long-term stability in this “relationship.” All areas of confrontation still remain, and could trigger new explosions. The military build up continues with increased pace, as does the great game of struggles for resources, energy, AI, and power. China’s extreme dependence on exports in a deglobalizing world, and the US’s place at the heart of the financial sector’s bubbles, are vulnerabilities which can fuel sharp new turns and crises. So is the growing discontent inside both countries, building up for explosive struggles.
Broadly speaking it remains the case that at this stage neither side in this ongoing showdown can either inflict a decisive “knockout blow” against the other, nor can they afford to simply back down and grant the other side a full victory.
Iran: Trump’s Vietnam? Or Worse
On 31 May, the UK Guardian’s diplomatic editor posed the question “Could Trump’s Iran excursion be a bigger global turning point than Vietnam?”. While the loss of life in Vietnam (including for US personnel) and the devastating crisis sparked in the US military and society is much greater in comparison, it is certainly the case that the international consequences of Trump’s humiliation in the Middle East are more far-ranging. This reflects just how far the decline of US imperialism has progressed since the 1970s.
Far from a “minor excursion” as Trump claims, the US/Israeli war on Iran was a colossal endeavor. Over the 40 days of war which preceded the April 10 “ceasefire,” US and Israeli forces dropped more bombs on Iran than were fired during the US invasion of Iraq in 2003. During the same 40 days, US forces fired 850 Tomahawk missiles, compared to the 57 that were scheduled to be produced in the whole of 2026.
This is a significant depletion of US stockpiles, with consequences which will reverberate far beyond the Persian Gulf. As Trump entered the quagmire, weapons, systems and personnel were diverted in large numbers from the Western Pacific (US imperialism’s strategic priority) and Europe. It will take several years to replenish the munitions expended, despite the massive acceleration in production which Trump is demanding. The real cost to the US treasury will run into the hundreds of billions, with one leading Harvard economist predicting an overall cost of up to one trillion dollars.
And what did Trump get in exchange for such a devastating outlay? Not even a pyrrhic victory as in the case of Iraq, but a defeat. At the time of writing, the fragile deal agreed between Washington and Tehran makes this outcome crystal clear. The Iranian regime, even at a time of historic weakness, was simply too strong for crisis-ridden US imperialism to overcome.
Initially, when Trump failed to force Tehran’s capitulation, a scenario of escalation towards a ground war was seriously contemplated in Washington. In the days prior to the announcement of the June deal, Trump openly told reporters that “taking Kharg Island” had always been his “preference” but that “I don’t know that America has the stomach for it, to be honest.”
Here, Trump is really referring to one of US imperialism’s most important limitations on the world stage today, which ISA has pointed out repeatedly in recent material: its inability to conduct large-scale land wars—to “put boots on the ground.” This is a reflection of US imperialism’s long decline: “Vietnam syndrome” followed its defeat there in the 1970s, which was compounded by Iraq/Afghanistan syndrome following the disastrous “war on terror” at the beginning of this century. Far from successfully addressing this fundamental problem for the world’s main superpower, Trump has now made it much worse.
Regional Balance of Power
The impact of this US defeat on the balance of power in the Middle East is difficult to overstate. Trump’s war has not only blown up US authority and credibility in the region, but also dynamited the entire economic and geopolitical foundations of the Gulf states, whose dictatorships had been full of optimism in the preceding period. The entire fabric of these states’ dependent relationship with Washington—the idea that US military might and the extensive import of US arms could secure their fossil fuel industry—has gone up in smoke. When push came to shove, their sacred alliance with Washington became a source of vulnerability, not strength.
Even if the current deal holds, the situation in the Gulf will continue to change rapidly. Alongside repairing damaged infrastructure, which will take several years to be fully operational, regimes in Saudi Arabia, the UAE, Qatar, etc. will have to sink billions into new infrastructure—especially pipelines—to reduce their dependence on the Strait of Hormuz. The war has also taken the already strained relationship between Saudi Arabia and the UAE to a new low, with the UAE moving closer to Israel and leaving the Saudi-led OPEC oil cartel.
For some regimes, a rapprochement with Iran—which has proved itself the most important guarantor of the region’s oil and gas exports—will also emerge as an option once the dust has settled. In the case of Oman—a US ally which Trump threatened to “blow up” if it made arrangements with Iran—this appears to already be on the cards. Moreover, the June deal reportedly includes the payment of vast sums from other Gulf states to Tehran for reconstruction.
The strength of the Iranian regime should not be overstated. While it clearly emerged on top, it too was pushed to the brink. The war took inflation in Iran to its highest level since WWII—77%—and it suffered the decapitation of several tiers of its state, military and political hierarchy. Trump’s repeated claims that “regime change” had been carried out are patently absurd. However, the regime has undergone a certain recomposition, with the police state, represented by the IRGC, now playing a more central role, despite the formal maintenance of clerical leadership and political oversight.
That being said, the most significant outcome of the war for the regional balance of power is the clear de facto control Tehran now exercises over the Strait of Hormuz. This dramatically enhances Iranian power. It also sends a message to countless other states and non-state actors as to how effectively, and relatively easily, such choke-holds can be exploited. This follows the successful curtailment of transit through the Bab-el-Mandeb strait by the Houthis in 2024, a repetition of which was one of US imperialism’s foremost fears in the case of further escalation with Iran.
The outcome of the war and the June deal between the US and Iran is of course also a stunning blow to the Israeli regime. Its bloodsoaked “progress” in shifting the regional balance of power in its favor is now under severe threat. The war on Lebanon, with almost four thousand killed at the time of writing, is the most explosive fault line which threatens the deal. Netanyahu’s far-right government is in no mood to rein in its regional onslaught. It is also continuing to twist the knife in Gaza, and stepping up the ethnic cleansing of the West Bank. Al Jazeera reports that the IDF has fully occupied over 1,000 square kilometers of Gaza, Lebanon, and Syria in the past two years, an expansion of over 5% of the total territory under its control.
One of Trump’s most absurd statements during this war (with a crowded field to choose from!) was made on 25 May. In a flurry of posts, he claimed that the outcome of the conflict would lead to a huge extension of the “Abraham Accords,” with a long list of countries from Turkey to Saudi Arabia to Pakistan named as among those about to “normalize” relations with Israel. The reality is precisely the opposite.
In fact, this war has further advanced the process of Israeli capitalism acquiring “pariah status” on the world stage, which has been turbocharged since October 2023. Its genocidal onslaught on the Palestinian people is one of the most dramatic consciousness-shaping events in recent memory.
Driven by international mass rage, which was expressed in an historic international mass movement spanning more than two years, global politics is beginning to shift decisively. The open and enthusiastic defenders of Israeli state terror—which recently included the vast majority of the Western media and political establishment—have been reduced to a narrow fringe in most countries in the world. Even in the US, support for Israel has plummeted in polling, among supporters of both major parties and especially among the younger population.
For some regimes, a rapprochement with Iran—which has proved itself the most important guarantor of the region’s oil and gas exports—will also emerge as an option once the dust has settled. In the case of Oman—a US ally which Trump threatened to “blow up” if it made arrangements with Iran—this appears to already be on the cards. Moreover, the June deal reportedly includes the payment of vast sums from other Gulf states to Tehran for reconstruction.
The strength of the Iranian regime should not be overstated. While it clearly emerged on top, it too was pushed to the brink. The war took inflation in Iran to its highest level since WWII—77%—and it suffered the decapitation of several tiers of its state, military and political hierarchy. Trump’s repeated claims that “regime change” had been carried out are patently absurd. However, the regime has undergone a certain recomposition, with the police state, represented by the IRGC, now playing a more central role, despite the formal maintenance of clerical leadership and political oversight.
That being said, the most significant outcome of the war for the regional balance of power is the clear de facto control Tehran now exercises over the Strait of Hormuz. This dramatically enhances Iranian power. It also sends a message to countless other states and non-state actors as to how effectively, and relatively easily, such choke-holds can be exploited. This follows the successful curtailment of transit through the Bab-el-Mandeb strait by the Houthis in 2024, a repetition of which was one of US imperialism’s foremost fears in the case of further escalation with Iran.
The outcome of the war and the June deal between the US and Iran is of course also a stunning blow to the Israeli regime. Its bloodsoaked “progress” in shifting the regional balance of power in its favor is now under severe threat. The war on Lebanon, with almost four thousand killed at the time of writing, is the most explosive fault line which threatens the deal. Netanyahu’s far-right government is in no mood to rein in its regional onslaught. It is also continuing to twist the knife in Gaza, and stepping up the ethnic cleansing of the West Bank. Al Jazeera reports that the IDF has fully occupied over 1,000 square kilometers of Gaza, Lebanon, and Syria in the past two years, an expansion of over 5% of the total territory under its control.
One of Trump’s most absurd statements during this war (with a crowded field to choose from!) was made on 25 May. In a flurry of posts, he claimed that the outcome of the conflict would lead to a huge extension of the “Abraham Accords,” with a long list of countries from Turkey to Saudi Arabia to Pakistan named as among those about to “normalize” relations with Israel. The reality is precisely the opposite.
In fact, this war has further advanced the process of Israeli capitalism acquiring “pariah status” on the world stage, which has been turbocharged since October 2023. Its genocidal onslaught on the Palestinian people is one of the most dramatic consciousness-shaping events in recent memory.
Driven by international mass rage, which was expressed in an historic international mass movement spanning more than two years, global politics is beginning to shift decisively. The open and enthusiastic defenders of Israeli state terror—which recently included the vast majority of the Western media and political establishment—have been reduced to a narrow fringe in most countries in the world. Even in the US, support for Israel has plummeted in polling, among supporters of both major parties and especially among the younger population.
Trump himself—Netanyahu’s enabler in chief—hypocritically came out in criticism of Israeli attacks on civilians in Lebanon in June. Of course, this had nothing to do with concern for Lebanese civilians and everything to do with his desperation to not have his surrender to Iran disturbed by more Israeli bombardments. But what is the significance of the tensions which exist between these two murderers?
Much discussion among commentators critical of the Iran war, in particular within the US, has emphasized the idea that Israel, assisted by its powerful Washington “lobby,” is really the “tail which wags the dog” of US foreign policy. This is a particularly prominent part of the discourse of the “anti-war” right in US politics, exemplified by figures like Tucker Carlson and Marjorie Taylor Greene, though it is not confined to these sectors by any means.
Marxists understand that conflict in the Middle East, as with all regions, is part of a global imperialist balance of forces. Within this context, the US and Israeli regimes are indeed closely connected and integrated with one another, an “alliance” which stretches across each passing administration. And certainly, no imperialist geopolitical relationship is one between equals.
However, by any and all metrics, it is the US which is the senior partner in this case, and by a very long way. Israeli capitalism plays a fundamental role in enforcing US interests in a region which has been decisive for its interests. But it in turn is completely and utterly dependent on Washington for its survival. The idea of Trump being at Netanyahu’s beck and call is therefore an inaccurate caricature.
However, this does not mean that the Israeli regime has no leverage in this situation. While Trump has dynamited the Western bloc, Israel is the only traditional US ally with which he has forged closer relations in his second term. Netanyahu has made several attempts, often with success, to derail Trump’s initiatives to push through botched deals and “peace plans.”
The escalation of the war on Lebanon in June was an extremely transparent attempt to stall the momentum towards Trump’s surrender deal. And nothing indicates that the Israeli government will not stop trying. It is also motivated by political considerations, with Netanyahu desperate to enter the October Israeli election as a “wartime leader” to retain power and avoid prison, while Trump is determined to enter the US midterms in the exact opposite scenario.
This is one of the reasons which makes a more lasting end to hostilities in the region highly unlikely in the foreseeable future. Trump’s new definition of a ceasefire as “shooting in a more moderate manner” is, in the cases of Gaza and Lebanon, already the new norm. A scenario of continued armed conflict between Iran and Israel without the (formal) participation of the US is also possible. In early June, Iran cited Israeli attacks on Beirut as a direct motive for missile attacks for the first time and its Houthi allies have also waded in intermittently with attacks on Israeli targets.
However, this would put major pressure on Trump. The Israeli military is a formidable force in its own right, but it is entirely dependent on the US, not only for supplies but also the intelligence, satellite and radar facilities which make its bombardments of Iran possible. Whether an emboldened Iranian regime will allow for the conflict to be “decoupled” in this way—agreeing, for example, not to close Hormuz again in response to Israeli aggression—is also an open question.
In reality, the June “deal” between the US and Iran is an agreement for 60 days of continued negotiations, which can be extended longer. It means that the Middle East continues to be on the edge of renewed wars and crises, including the potential of movements from below to challenge local regimes and imperialism.
Energy Crisis—Not Out of the Woods
The timing of the June deal and Trump’s increasing desperation to push it through had everything to do with the ticking time bomb of his personally handmade energy crisis—the worst in world history. Panic was spreading throughout industry, with the IEA chief warning in late May of an impending “red zone” for energy markets starting in July. While Trump’s constant reassuring of the markets, and now the June deal, may have fended off the worst-case scenario of a catastrophic economic crash, the lingering effects will continue to hang over the world economy.
Even if Hormuz is reopened—a very big if—the world economy will be very far from being out of the woods. The clearing of mines and evacuation of the hundreds of vessels containing more than 20,000 seafarers currently trapped in the strait will take weeks by itself. It would then take many more weeks for global supplies to fully flow, as tankers take months to transit from Hormuz to Asian and American ports. Maritime insurers would also take time to be convinced that large-scale transit through the strait is worth the risk. The example of the Bab-el-Mandeb strait—which has still not returned to anywhere close to pre-2024 levels of traffic—is illustrative. In addition, the Iranian regime will almost certainly favor a slow and gradual reopening of the strait, in order to maintain leverage in future negotiations or standoffs with Trump.
Most economists expect elevated oil and gas prices to continue for at least the remainder of 2026. The knock-on inflationary impact is only beginning to be registered in the world economy, and will have profound impacts, especially in the neocolonial world where millions are being tipped over the edge from misery to starvation. The impact of the disruption to fertilizer supplies caused by the war is also already baked in, with smaller harvests and higher prices guaranteed over the coming 12 months.
The energy crisis is also about more than a clogged supply chain. Extensive damage has been done to production facilities, and reopening shuttered wells is a complicated process. The same IEA chief quoted above predicted that a return to full oil production in the Gulf would take at least one year, and some of the world’s biggest gas facilities will take between three and five years to be fully repaired following Iranian attacks in March.
AI and the World Economy
In short, the war will lead to a lengthy, costly, and complicated process of repair and restructuring of the region’s energy industry, which will have long-term world implications. Among the worst hit sectors of the economy by this energy shock will be the industry which is responsible for over 80% of stock market growth and the only factor holding the world economy back from a deep recession: Artificial Intelligence.
By inflating the AI bubble to its current extreme proportions, investors are gambling not only on the development of the technology itself, but also on a rapid expansion of cheap energy for the endless data centers required to deliver a return on their investments. More than $300 billion of these investments have been made in the Persian Gulf itself! This underlines the unsustainability of the AI bubble, and ergo of the situation in the global financial sector, bound to burst at some point.
The sheer dependence of the world economy on a single industry, which has yet to deliver real profitable returns, is a stark symptom of the ultra-parasitic stage which capitalism has reached in the 2020s. So is the fact that this bubble has propelled the grotesque Elon Musk to the title of history’s first trillionaire. That he just so happens to simultaneously be the world’s leading funder of white supremacists and neonazis only adds to the picture.
Indeed, AI is a reflection of the system’s reactionary turn in general. Alongside obscene ultra-profiteering, it is defined by turbocharged climate killing and environmental destruction. From Africa to Arizona, domestic water supplies will run dry and carbon emissions soar in order to feed its monstrous appetite. Together with the other global growth industry—militarism—it underlines the speed with which capitalism is hurtling towards nightmarish vistas of climate breakdown.
It is also deeply reactionary from the point of view of the class struggle. The aspirations of the ruling class regarding AI are ultimately based around qualitatively reducing labor costs. Amazon, Microsoft, Meta and other mega corporations have already begun to take advantage of the “benefits” of AI by announcing mass sackings. As with all other “labor saving” technologies implemented by the capitalist class in history, the rollout of AI will inevitably become a battlefield in the class struggle.
AI is at the heart of the new era of imperialist conflict and militarism. Its models allow for the near-instantaneous planning of murderous US and Israeli missile salvos in the Middle East, and millions of dollars and hours of human energy are being invested in pursuit of automated killing machines.
It is also a crucial front in the US/China conflict and was already a key factor in the banning of advanced chip sales to Beijing under the Biden presidency. US imperialism is now going all out to capitalize on its advantage over Beijing in advanced tech. Trump’s state capitalist proposal for the US Treasury to buy shares in big AI firms is an indication of this, but will also have the unintended consequence of further exposing Washington’s public finances to the impact of the coming crash.
China is no less invested in the AI race, but appears to be focused not on outdoing US firms’ technological advances but rather on rolling out existing technology more rapidly and extensively. Its more centralized system and the total absence of independent trade unions have allowed it to normalize “lights out” (fully automated) factories. It is clear, however, that this will be no antidote to Chinese capitalism’s underlying crises of overproduction, suppressed consumption, and deflation. It could even exacerbate these trends in some respects, as the displacement of workers by AI and robots will aggravate the collapse in consumer spending.
Perspectives for the world economy must remain open, but the fundamentals—in particular an historic energy crisis and overinflated financial sector—point in a clear direction. The coming crisis will also be made much worse by the fact that the capitalist system is in an immeasurably weaker position compared to the buildup to the 2008 financial crash. Mountains of debt, the end of China’s rise, and the absence of any effective institutions of international cooperation mean that the system’s toolkit to address a serious downturn is depleted.
