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AI job exposure and risk of human jobs lost to AI. Image generated by IA

By Isabel Ortiz and Bill Shoulder
NEW YORK, Jun 26 2026 (IPS)

Artificial intelligence (AI) promises remarkable gains in productivity, science, medicine and education. But it is also poised to wipe out millions of jobs, hollow out the middle class, and drain the tax revenues that pay for hospitals, schools and pensions. The process has already begun, and the time to act is running out.

The International Monetary Fund (IMF) estimates that AI will affect almost 40% of jobs worldwide. In advanced economies, around 60% of jobs are exposed and as many as one in three (33%) human jobs are at high risk of being replaced by AI. In emerging markets, about 40% are exposed, with roughly one in four (24%) at high displacement risk; and in low-income countries, an estimated 26%, with close to one in five (18%) human jobs lost to AI.

Isabel Ortiz

Job losses shrink the middle class
The most exposed jobs include many occupations long seen as the backbone of middle-class stability: clerical work, customer service, translation, journalism, legal support, financial analysis, marketing content, and even parts of software and data work. These jobs support middle-class incomes, consumer demand and, ultimately, tax-paying households, yet many are among those the IMF finds most exposed to AI.

New jobs will appear but, according to the IMF, far more are likely to vanish. The effects spread beyond the workers who lose their jobs. Wages fall, insecure work multiplies, and bargaining power collapses once employers can credibly threaten to swap workers for AI. More income flows to those who own the technology and to a handful of dominant firms, while the share reaching ordinary employees and workers shrinks.

Middle-class households are the economy’s main consumers. If their incomes fall, shops and small businesses sell less, investment slows, and closures rise. The economy can then slip into a low-growth trap of weak demand, low wages and chronic underemployment.

Falling tax revenues weaken the welfare state
The pressure then moves to public finances. Much of governments’ funding depends on the middle class: income taxes, consumption taxes and social security contributions. If wage income falls and stable employment shrinks, public revenues shrink with it. At the same time, more people need unemployment support, retraining, healthcare and income assistance. Governments then face the fiscal vise of lower revenue and higher need, a risk highlighted in the IMF’s 2026 analysis of AI, labor markets and public policy.

Bill Shoulder

Public pension systems rely on pay-as-you-go financing, where current workers fund retirees. In health, healthy people finance those who are sick. If the pool of contributors shrinks, sustainability collapses; then governments tend to cut benefits, raise charges or shift more costs onto households, as explained in the UNRISD article AI and the Future of the Social Contract.

Public services and democracy come under strain
History suggests what often comes next: austerity policies. Governments under pressure raise consumption taxes, increase user fees, tighten eligibility rules and cut public spending. When revenues weaken, education, health, care services and social protection are often treated as budget lines to be “rationalized,” even though they are human rights and indispensable public services that hold societies together. The result is a two-tier world: quality private services for the wealthy few and failing public provision for everyone else.

Economic insecurity erodes democratic trust. If people feel that work no longer provides stability, that public institutions no longer protect them, and that the gains from technology flow upward to a small elite, resentment grows. Polarization intensifies. Scapegoating becomes easier, as does the appeal of surveillance, manipulation and more authoritarian forms of control, especially when AI itself can be used to shape information and public debate.

The future is ours to shape
None of this is inevitable. As Nobel laureates Acemoglu and Johnson argue, the impact of AI depends far less on the technology than on the political and economic choices we make about how to use it. Governments can tax the windfall profits and concentrated power AI creates. With these funds, they can protect demand and guarantee income security through the transition. Governments can and should expand public services and social security as fundamental human rights. States should also give workers and citizens a real say in how AI is deployed, and regulate AI to strengthen democracy, prevent disinformation and surveillance from eroding civic trust before it is damaged beyond repair.

AI is already transforming society. The decisive question is whether democracies can ensure that its enormous gains are shared widely enough to foster prosperity for all, preserving the social contract on which stable, dignified societies depend. That choice is still ours, but not for much longer.

Isabel Ortiz, Director, Global Social Justice, was Director at the International Labor Organization (ILO) and UNICEF, and a senior official at the UN and the Asian Development Bank.

Bill Shoulder is an AI software engineer and a researcher, with a background in artificial intelligence and international project management.

IPS UN Bureau

 

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(L-R) Horacio (Luis) Carvalho, CEO of Climate Change Ventures, and Faraz Khan, MBE, at London Climate Action Week. Carvalho's firm advises on carbon mitigation and green investment projects. They signed an MOU to develop markets with Brazilian CPR Verde (green rural product certificate), a Brazilian financial credit instrument used to fund environmental preservation, forestry conservation, and carbon sequestration. The markets they are eyeing will be Saudi Arabia, Africa and Pakistan. Credit: Faraz Khan

By Zofeen Ebrahim
LONDON & KARACHI, Pakistan, Jun 26 2026 (IPS)

The 30 COP gatherings may not have done what three months of US-Israeli war against Iran did: expose the world’s vulnerability to fossil fuels.

As the world faced its biggest energy shock in a decade, the case for investing in clean energy suddenly became far more compelling.

As an intense heatwave grips Europe, with London’s Met Office issuing a “risk to life” warning and the closure of shops, offices and schools alongside disruptions to transport during the London Climate Action Week (LCAW), calls for this shift are gaining even greater momentum.

New Sense of Urgency

“The sentiment is palpable among policymakers, investors and business leaders,” conceded Faraz Khan, MBE.

A Pakistani entrepreneur and co-founder and partner of Pakistan-based Sustainadility, a technology, data and advisory firm, with over 25 years of experience in multi-stakeholder investments and in drafting environmental, sustainability and governance frameworks, is among those gathered to discuss the future of climate finance and the energy transition.

Speaking to IPS by phone on the sidelines of LCAW which closes on June 28, Khan stressed the urgency of transitioning from fossil fuels to renewable energy, saying the shift would not be possible without investors and businesses.

Khan described the mood at LCAW, as “optimistic” tempered by caution. He also welcomed the attention Pakistan was getting. “Our country was lauded for its efforts in brokering the peace deal,” referring to the Islamabad Memorandum between the United States and the Islamic Republic of Iran.

From Rule-Making to Seeking Investment

Comparing the two events, he said the annual Bonn climate talks, held from June 8 to 18, focused on diplomatic negotiations and climate rule-making, while LCAW, also an annual event held since 2019, centres on mobilising private investment in sustainability and ESG and scaling these initiatives commercially.

“LCAW is more business- and private sector-orientated,” said Khan, who is also the founder and director of  SeedVentures, a Pakistan-based social impact organisation and impact investor.

Still, he said: “There are two sides to the coin. On the one hand, the US-Iran peace deal and the reopening of the Strait of Hormuz have shown the world that oil remains crucial for the world to exist; but, on the other, many countries recognise that dependence on fossil fuels is not in their national interest and even poses a national security risk.”

Geopolitical conflicts have exposed the vulnerabilities associated with oil production, trade and transportation, which is why investment in alternative energy is expected to accelerate.

At a COP31 presidential meeting with the private sector at LCAW, which Khan attended, the conversation revolved around the circular economy, electrification and climate finance with some of the biggest names in the global climate community, including BlackRock, the World Bank, UNIDO, the IFC and several trade organisations.

“It was a gathering of the who’s who of the climate world,” Khan said with a laugh. “Even we made the cut.”

What was missing, however, Khan said, were women in decision-making roles. He was, however, impressed by those in the Turkish COP team, praising their intellectual rigour and commanding presence in the room, which he found to be “truly impressive”.

Beyond the composition of the meetings, Khan said the discussions themselves reflected a growing determination to move beyond rhetoric.

There was a strong sense in the room that a new precedent was about to be set by shifting the focus from negotiations to implementation, investment and action.

“Governments can create an enabling environment and UN frameworks can provide the rules, but ultimately it is investors, bankable projects and big businesses that will drive change,” he said.

While the Bonn climate talks focused on regulatory frameworks, LCAW’s focus is on climate finance and transactions, he noted. “And at Antalya, where the COP31 will be held this November, it will be about putting money where our mouths are—deploying capital into bankable projects and creating collaborative investment vehicles to scale climate action,” said Khan.

Private Sector Takes Centre Stage

He also observed that China was frequently cited as a global leader in clean energy investment.

“Across the various meetings, I sensed a strong and growing appetite for investment in renewable energy, and I believe this momentum will only accelerate,” he said.

Large businesses and institutions, he added, would be critical to delivering a just transition because their extensive operations and community links give them the reach needed to drive meaningful change.

The emphasis on electrification and reducing dependence on fossil fuels was echoed by Türkiye’s COP31 leadership.

Earlier this month, speaking to The Guardian on the sidelines of the climate talks in Bonn, Murat Kurum, Türkiye’s environment minister, said the 35% target would be “one of the defining priorities” of the COP31 presidency.

“By electrifying daily life, from transport to buildings and industry, we can protect families and businesses from volatile energy markets,” he told the media outlet.

Khan believed Pakistan has an opportunity to position itself at the forefront of this transition.

While Pakistan is frequently showcased as a victim of climate disasters, despite contributing less than 1% of global greenhouse gas emissions, Khan said the global focus on solar should also shine a light on the country’s “silent solar revolution”, which has transformed its investment landscape.

“Pakistan has become a global example of how solar adoption can evolve rapidly, opening up substantial investment opportunities in solar manufacturing and battery production,” he said, adding that modernising the grid and scaling up utility-scale energy storage have become increasingly urgent.

Investing in Nature

Beyond renewable energy, Khan saw significant opportunities in nature-based investments.

Khan said Pakistan’s rich biodiversity—from mangroves and forests to wetlands, rangelands and mountain ecosystems—offers enormous investment potential, with private capital capable of both restoring and protecting these natural assets.

Agriculture accounts for a large share of Pakistan’s economy and is a major driver of biodiversity loss. He said private businesses could invest in regenerative agriculture, agroforestry and sustainable rice and cotton production, either to meet sustainability goals or as part of emerging biodiversity credit markets.

“Just as there are carbon credits, there are biodiversity credits, and these are directly linked to food security and agriculture,” Khan said. Given agriculture’s central role in Pakistan’s economy, he argued that the country holds enormous potential for biodiversity credits. “I think this is going to be truly phenomenal because it presents enormous investment opportunities,” he said.

But realising this potential will depend on Pakistan’s ability to attract sustained private investment.

Investment Challenges

Sadly, there are few takers.

Khan said Pakistan’s high sovereign risk remains the biggest obstacle to attracting international climate investment at scale, although recent policy reforms, including the Pakistan Green Taxonomy, green banking guidelines and ESG standards, have improved investor confidence.

He also pointed to a shortage of bankable projects, with many failing to attract global investors despite their strong fundamentals. Still, he said, the investment potential remains enormous.

Yet time may be of the essence.

If the recent turmoil in the Middle East exposed the world’s vulnerability to fossil fuels, Khan believes it also underscored the urgency of accelerating the clean energy transition. For Pakistan, he said, the opportunity is immense—but only if the country can create the conditions needed to attract the investment required to realise it.

IPS UN Bureau Report

 

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By Inés M. Pousadela
MONTEVIDEO, Uruguay, Jun 26 2026 (IPS)

On 21 June Colombians made their choice. By the narrowest of margins, Abelardo de la Espriella, a far-right criminal lawyer who’s never held elected office, became president-elect. Climate activists, human rights defenders, Indigenous communities and peace advocates have the most to lose from the incoming government’s agenda.

The election results follow the logic of a decade of deepening polarisation. Since the 2016 Peace Accord with the Revolutionary Armed Forces of Colombia began a contested and incomplete transition away from armed conflict, Colombian society has divided into two mutually hostile blocs. The election further revealed that no middle ground remains between them. The mainstream right is gone, its candidate receiving a humiliating 6.3 per cent of the first-round vote, and a new right, harsher and less constrained by institutional norms, has taken its place.

Peace agreement in trouble

Nothing divided the two runoff candidates more starkly than the 2016 Peace Accord. Iván Cepeda, the candidate backed by outgoing leftist President Gustavo Petro, is a long-time human rights advocate and senator, and chairs the Senate’s Peace and Post-Conflict Commission. He ran on a ‘comprehensive peace’ platform focused on addressing the structural roots of violence, including land access, inequality and the absence of state services in rural areas.

In contrast, De la Espriella said there would be no peace process under his watch, proposing instead to resume aerial bombardment of armed groups and reinstate herbicide fumigation of coca crops, a practice with well-documented environmental and public health consequences.

According to figures from Colombia’s Ombudsman’s Office, the six-decade conflict caused over 1.1 million killings and more than 200,000 enforced disappearances, while over nine million were forcibly displaced. That record, and the significant progress made since 2016, will now be judged expendable by a government that regards the accords as illegitimate.

For the communities living in territories where armed groups overlap with extractive industries, this is no abstract policy debate. Human rights organisations have warned that a return to a full military offensive will be devastating for civilian populations, particularly the environmental defenders and Indigenous communities who already face lethal threats. Colombia is the world’s deadliest country for environmental and land rights defenders. It’s likely about to get worse.

Cutting the human rights lifeline

De la Espriella also proposes to part ways with the international human rights architecture that has provided Colombia’s victims with a path to justice. On the campaign trail, he announced his intention to withdraw from ‘useless’ international organisations including the UN and the Organization of American States, and denounced the Inter-American Commission on Human Rights as ‘a farce’ that has served only to ‘support the left and persecute our security forces’.

In Colombia’s conflict-ridden territories where Afro-Colombian and Indigenous communities continue to experience massacres and displacement, international monitoring bodies are often the only source of independent verification that violence is happening. The American Convention on Human Rights, which Colombia ratified in 1973, is embedded in the country’s constitutional framework, shaping the interpretation of fundamental rights across the legal system.

The Inter-American Commission on Human Rights has hundreds of cases involving Colombia. In December 2024, the Inter-American Court of Human Rights found the state responsible for the 1995 enforced disappearance of two human rights defenders. Their families waited almost three decades for closure, and only got it because they turned to the regional system when domestic institutions failed them. Now that route could be closed.

What the results mean

Colombia’s change of direction could have global repercussions. Just weeks before the election, Colombia hosted the First Conference on Transitioning Away from Fossil Fuels, bringing together 57 states alongside civil society and scientists frustrated by the repeated failure of UN climate summits to deliver binding commitments on fossil fuel phase-out. Under Petro, renewable energy grew from two per cent to around 16 per cent of the energy mix, and Colombia issued no new contracts for fossil fuel exploration.

That era ends when de la Espriella takes office on 7 August. He frames fossil fuel expansion as a fiscal imperative and calls for the immediate legalisation of fracking, currently banned by judicial moratorium. Since the country includes significant parts of the Amazon rainforest, the climate impacts won’t be limited to Colombia.

Ultimately, De la Espriella did not win for his positions on peace, climate or human rights. He won on security and the promise of order. Calling himself ‘The Tiger’, he modelled his campaign on the populist template of Argentina’s President Javier Milei and El Salvador’s Nayib Bukele, vowing to shrink the state, build megaprisons and combat corruption with tools normally reserved for organised crime. The movement he founded, Defenders of the Homeland, carried Donald Trump’s public backing. The combination proved effective in a country exhausted by decades of violence where many are deeply sceptical of the left’s ability to deliver safety.

The far-right candidate converted legitimate grievances about insecurity into a mandate to dismantle the peace process, reverse climate commitments and withdraw from the international human rights architecture. The consequences will be felt most acutely by those his campaign never meant to speak to.

Inés M. Pousadela is CIVICUS Head of Research and Analysis, co-director and writer for CIVICUS Lens and co-author of the State of Civil Society Report. She is also a Professor of Comparative Politics at Universidad ORT Uruguay.

For interviews or more information, please contact research@civicus.org

 

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By Chie Aoyagi, Maurizio Leonardi, Athene Laws and Hamza Mighri
WASHINGTON DC, Jun 26 2026 (IPS)

For decades, official development assistance has been a central pillar of financing in sub-Saharan Africa. That pillar is now weakening—quickly and broadly.

In 2025, bilateral aid to the region fell sharply, with early estimates pointing to cuts of about 26 percent in a single year. Multilateral support is also under pressure, with major institutions projecting sizeable budget reductions. More cuts may follow as donors reset priorities in a shifting geopolitical environment.

As we explain in chapter 2 of the IMF’s recent Regional Economic Outlook for Sub-Saharan Africa, this is not a routine fluctuation. It is hitting countries that have limited room to adjust and few alternative sources of financing.

Why aid matters

Sub-Saharan Africa had the highest aid dependency globally in 2024. On average, aid accounted for 3 percent of GDP at the regional level. But that average hid sharp differences. In low-income countries and fragile states, aid often reached the equivalent of 6 percent of GDP or more, and in some cases far higher.

Over half of that aid was used to finance essential services such as health, education, and humanitarian assistance. And because development partners and non-governmental organizations (NGOs) often deliver services directly to people in need, aid cuts can also curtail the very systems that people rely on. Effective responses to crises such as the Ebola emergency in the Democratic Republic of the Congo and Uganda, the high and rising needs of people forcibly displaced by conflict, and the ongoing drought in the Horn of Africa rely heavily on the health and humanitarian infrastructure that aid has consistently helped to build.

A different reality

Aid flows have always fluctuated. But this episode stands apart.

The recent cuts are large and broadly simultaneous across countries. They are driven by donor decisions rather than changes in recipient economies. And they come at a time when traditional buffers are weaker: multilateral institutions and NGOs, which have often cushioned past declines, are themselves facing funding constraints. While non-traditional donors, such as China and the Gulf States, have grown their aid presence in the region, the magnitudes are not able to cover the reduction in traditional donors.

The cuts are also difficult to manage because they follow six years of successive shocks—including the pandemic, tighter global financial conditions, and food and energy crises—that have already eroded fiscal space.

Tough trade-offs

Governments now face difficult choices. Many have limited fiscal space, rising debt, and low reserves.

IMF-administered surveys covering 28 African countries suggest four broad policy responses:

o Some governments are not replacing lost aid, allowing programs to lapse. This limits immediate fiscal strain but carries high social costs.
o Many are reprioritizing spending, often cutting public investment—easier politically, but damaging to future growth.
o Others are borrowing more, including domestically, increasing debt risks.
o Some are stepping up revenue mobilization, though results take time.

Each option comes with trade-offs. Replacing lost aid can protect services and growth, but at the cost of wider deficits and external imbalances. Not replacing it stabilizes budgets and protects debt sustainability, but risks lasting damage to human capital and development.

There are no easy choices.

How to respond

The policy challenge is to manage the adjustment while preserving core development gains. Three priorities stand out.

First, protect and target high-impact aid.
With resources scarce, allocation matters more. Aid should be directed toward the countries and sectors where it has the greatest effect—especially low-income countries and fragile states, and essential humanitarian needs. Stronger coordination can reduce fragmentation and avoid duplication.

Second, broaden the financing toolkit.
Grant financing will remain essential, particularly in humanitarian contexts. But other instruments can play a larger role. Blended finance—using public funds to mobilize private investment—can help expand financing for infrastructure, energy, and agriculture. It is not a substitute for aid: it is harder to scale, more complex, and can add to debt if poorly designed. Managing these trade-offs will be critical.

Third, strengthen domestic capacity.
With aid less predictable, resilience increasingly depends on domestic institutions. This means mobilizing more revenue, improving spending efficiency, and strengthening policy design and service delivery. Aid has often provided both funding and implementation; replacing that capacity will take time and sustained investment.

A turning point

The shift that began in 2025 is unlikely to be temporary. It reflects a broader reconfiguration of development finance, shaped by tighter donor budgets and changing priorities.

The implications will vary by country, depending on exposure, initial buffers, and policy choices. But the direction is clear: reliance on external aid will become more uncertain, and domestic policy will matter more.

The immediate task is to manage the decline in aid without backsliding on the significant human development achievements of the past decades. The longer-term challenge is to adapt to a world where aid is less abundant and less predictable. How countries navigate both will shape growth and development outcomes for years to come.

Chie Aoyagi, Maurizio Leonardi, and Athene Laws are economists in the IMF’s African Department, where Hamza Mighri is a research analyst.

IPS UN Bureau

 

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