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By Nick Tselikov Interview  Scott L. Montgomery is a geoscientist, author, and lecturer at the University of Washington. Having worked for over two decades in the energy industry, he is the author of over 70 scientific papers and 100 monographs. He has been widely published in online journals, such as Newsweek, Forbes, Marketwatch, History Today, and others. Montgomery has additionally served on panels relating to global energy and sustainability, and has given public talks on the same topics. In this interview, conducted on April 10, 2026, Professor Montgomery discusses the energy implications of the Iran War. He examines various aspects of the conflict, such as OPEC’s increased centrality, Iranian strikes on Persian Gulf nations, and Chinese geostrategy. He considers how the conflict has ameliorated China’s image in the Middle East and how it has, in his view, strongly favored oil-exporting countries, including U.S. rivals. Montgomery further illustrates how new energy partnerships may emerge from ongoing instability in order to decrease dependence on Middle Eastern resources. Finally, he considers the conflict’s implications on U.S. domestic prices, industries such as aviation and shipping, and how it may influence the upcoming 2026 midterm elections.
Tselikov: Professor Montgomery, thank you for agreeing to participate in this interview. The Middle East has been central to the global economy due to its natural resources. How has this conflict reshaped global oil supply expectations? Montgomery: I’m very glad to be here and have this opportunity to talk about current events in the energy world. It’s a very important time. Though we can talk about some of the impacts, of course, the future will take care of those. In terms of the Middle East and its centrality to the global economy, it hasn’t been as central as I think a lot of people feel, for quite a while. It kind of lost its control over oil prices several times, but particularly after the price collapse in 2014. That was due to the shale revolution in the United States, which had few limits on its production growth, and wound up flooding the global market, driving the price down, and taking away a significant amount of market share from OPEC. And OPEC has never really regained it, even though a couple of years later it teamed up with Russia and about nine other oil suppliers to create OPEC+ and try to seize back control of the market. In the meantime, the U.S. has become a larger exporter of both oil and gas, and the world’s largest producer of both those resources. So, OPEC is important for sure, but compared to its market share, which was close to 50% in the early 1970s, a little bit after the first oil crisis, it’s now well below 40%, somewhere around 36-38%. And the U.S. is not far behind—it’s in the 20s, about 25% or so, but that’s large enough to offset OPEC trying to manipulate things. The problem now, of course, is that OPEC is large enough, its major suppliers are in the Persian Gulf, and the Persian Gulf is closed. So, this is having a major impact on the global economy, and it is putting OPEC back at the center. The U.S. cannot compensate for all of this. OPEC again is—I would say—crucially important, but not for reasons of its own choosing. How this will play out is not clear. I think I can say one thing that is very interesting about this conflict—at least, it is to a number of experts. Iran was never really taken seriously in terms of its many threats, its repeated threats, for more than 30 or 40 years, to close the Strait of Hormuz, because it was always going to be in its economic self-interest not to do this. But that has proven to be naïve. Iran is managing this by allowing its own tankers to go through and those of its allies, since a Russian tanker went through there today. So, this seems to be a new era; it is an interesting example of a country that is able to use its energy geography as a weapon. And not just as a threat, but as an actual weapon that causes great damage. This continues a pattern that has happened in the 21st century much more. Russia using its natural gas connection with Europe to try to manipulate and weaken Europe before its invasion of Ukraine is another example of using the energy weapon to actually cause damage rather than just a threat. No one ever thought Russia was going to do that because Europe was its largest customer. It had the great majority of the export share from Russia, both in oil and gas, but also coal, and a number of minerals. But Russia did this—and then Europe used its import power to try to eliminate Russia as a supplier. And so, importers have power too—we kind of forget that. They can use the energy weapon also, and Europe has certainly done that against Russia. Now, the other aspect to deploying energy as a hard power weapon has certainly played out in the Russia-Ukraine War, where each side—though losing thousands of combat soldiers at the front —is really targeting with its missiles and drones the energy infrastructure on both sides. So this is an era when energy is not just a threat, it doesn’t just increase a risk premium; it increases a hard power premium, an actual attack—energy use for violence between states. A new weapon that is being used in military combat. So, this is all quite interesting. Tselikov: Many countries in the Persian Gulf have been hit by Iranian airstrikes and have otherwise suffered from the conflict. Which countries are most vulnerable to sustained price volatility? Montgomery: Here, we’re talking about oil and gas. This is something new. The price volatility certainly affects Saudi Arabia to a great degree, as well as Bahrain, Kuwait, and Oman to a certain extent. It has a natural gas side that affects Qatar and the UAE in particular—this is a bit more complex. Oil has had a global market for a long time, and there are some regional dimensions to that, but it is a fully global market. Natural gas is still, it seems to me, somewhat transitional between a set of regional markets and a fully global market. So, with a regional market, you have a lot more volatility. And with an oil market, less so. I would say at this point, all these countries are extremely vulnerable to price volatility right now. They are in a situation where they would probably very much like to take advantage of the price volatility, because the volatility is all taking place at price levels much higher than existed before the war. But, they obviously don’t have the option to do that. They are all equally vulnerable, and that’s because oil and gas are equally central to their economies. That has not really changed to a significant degree for a very long time. The Iranian airstrikes have been effective. They have taken out major facilities for Qatar, probably more than any of the other countries. They have shut down its major natural gas port at Ras Laffan, and even portions of the gigantic North Dome/South Pars natural gas field. So I think that Qatar has been hit pretty hard, and the UAE has also. But all of these states are somewhat being brought together by their vulnerability together against Iran. So, this is an interesting situation again. Divide the Persian Gulf one side against the other. I think the U.S. and European countries have been hoping against the entry into military conflict by the Arab states on the Western side of the Gulf, and that seems to have been maintained to this time. But they are hurting, and it is quite serious for them at this point. The great majority of their storage is full, and their supply pathway is cut off. So, they have actually had to turn down the spigots and stop production. Iraq has stopped a fair portion, more than half of its oil production. That’s how serious it is for them—they essentially have to reduce their economic output to a very significant degree. Tselikov: Both Democratic and Republican administrations in recent U.S. history have been prioritizing Asia. Has the conflict forced the U.S. to divert diplomatic or military attention away from other priorities, notably China and the Indo-Pacific? Montgomery: Yes, I think that’s true. That was happening, I think, to a certain degree in any case. Trump was paying a good deal more attention to Europe, and certainly to Venezuela. And then the whole Greenland dust-up, and the problems with NATO. So, I feel as if this has helped shift both political parties to focus more on the Middle East again. China is certainly not out of the picture. It has not gotten the amount of media attention that it has in the past. The Indo-Pacific as a whole is not really a focus for now. Trump is sending people, like his Vice President Vance, to Hungary because of an election there. Their favorite candidate, Mr. Orban, is slated to have a difficult time. So, I think for now, though China is playing a role in the Mideast crisis, the war in Iran has really diverted attention from the White House to that area, and to Europe. Tselikov: How is China positioning itself diplomatically and economically as the conflict unfolds, particularly in its relationships with Iran and Saudi Arabia? Montgomery: That’s a very good question. The answer is, very intelligently. China is doing things rather quietly. It is receiving phone calls and sending messages to Iran, the Saudis and several of the other Persian Gulf nations, as well as to its ally Pakistan. It is setting itself in a position of stability— reassurance that it will not do anything either to support the U.S. or to do anything that would overtly enhance the conflict. Rather, it is going to pursue diplomatic pressures, hopefully [sic] in favor of the Iranians, perhaps even giving the Iranians some advice about how to deal with the U.S. It has a fair bit of experience with that—not all of it good—of course, or successful, but experience nonetheless. This whole situation places the U.S. in the position of being a force against security and against stability in the Middle East. And stability is what the Saudis, the UAE, and the Qataris want most for their region. The war is exactly what they did not want, and were not consulted about. They would prefer to return to stability or to welcome any influence, especially from China, to try to reestablish a more stable set of affairs. China knows this, is sort of exploiting this, but shares that point of view, I think, for the region. This is actually making China look very good, compared to the United States, in this region of the world. I’m not sure that that’s going to change. It looks like a very positive opportunity for the Chinese, in fact. Tselikov: The cost of gasoline has been rising in the U.S. What mechanisms cause geopolitical tension in the Middle East to translate so quickly into higher domestic gasoline prices? Montgomery: Though the United States produces more oil than any other country, it also consumes more. We produce somewhere around 13.6-13.7 million barrels a day, but we consume over 19-20 million, and in the summer, a bit more than that. So, we import between 6 and 7 million barrels a day. That makes us a major importer—and it makes us susceptible to global price changes. In terms of gasoline in the U.S., it’s not only U.S.-produced oil that goes to the refineries, which produce gasoline, diesel, jet fuel, and other fuels. Some of the crude we import from other countries, particularly Canada and Mexico, is more expensive, and so are the fuels that come out of it. That is why we are still vulnerable to price changes on the global market. We are not energy independent. That’s very important; we have never been completely energy independent since well before 1945-1950. And we certainly aren’t now. Tselikov: Due to the global surge of oil prices, may the conflict be said to be benefiting U.S. rivals that heavily rely on oil exports, like Russia and Venezuela? Montgomery: The short answer is, absolutely. It’s not just Russia, though Russia has benefited considerably. That is one reason why Ukraine is firing more missiles, trying to damage more of Russia’s oil and gas infrastructure, and ports. But high prices will benefit any exporter—whether Kazakhstan, Guyana, or Colombia. And certainly Venezuela and the companies that are there should be able to increase production significantly. In the short term, there are some questions about that, but most likely it can to some degree. So, any country that is exporting, or any company that’s exporting, will benefit from these higher prices. It doesn’t mean that they wish they would remain in place for a long time, because there’s a great deal of volatility, as we were discussing before. And it’s hard to have business when the prices are going up and down by 10%, 20%, even 30% on a daily basis—that’s pretty crazy. But, as long as the prices stay above $90, exporters are going to make more money than they did before. Tselikov: Could the conflict reshape global energy alliances and partnerships in ways that favor U.S. rivals? Montgomery: Again, the short answer is yes, possibly with some contingencies. Interestingly, Europe has opened itself up again to some Russian natural gas, after just considering new laws that would require terminating all gas from Russia by next year. Could we call this an alliance? I don’t think so. I’m not sure that Europe is going to accept Mr. Putin’s reassurance that Russia will play nice from now on. But Europe will be looking significantly to other areas of the world than the Persian Gulf. It’s gotten a fair bit of its liquified natural gas (LNG) and some of its oil from there, but it is interested in getting more from the United States. That is a possibility, because the U.S. is definitely ramping up its LNG capabilities on the Gulf Coast. There is some more capacity coming up this year, and there will be a significant amount more coming online in 2027 and 2028. The U.S. will be, by far, the world's largest LNG exporter. No one will come close by the end of this decade. Europe, even though it would like to move away from its dependence on natural gas overall, is realizing that it is proving to be more difficult. And so, it will look to the U.S. as much or more. It will also look at Canada. Canada is itself ramping up building export terminals for LNG, particularly on the Pacific side. So you know, those nasty Canadians up there are competing directly against the U.S. LNG exporters. I don’t think either side resents the other, but Canada sees itself taking a global position. It’s producing more oil and more gas than it has ever before, and is looking to sell those overseas to Asia and to Europe. This is happening also at a time when Australia’s capabilities for LNG have been reduced to a certain degree. Australia was a major player—it still is—but certainly is not in a position like the United States is. Australia is kind of looked at as having mostly maximized its export capacity. Another potential energy alliance would be LNG coming from Mozambique and going to Europe. Also from Guyana, from the north coast of South America, and potentially Venezuela as well. All of those countries have gas export capabilities. We also shouldn’t overlook Israel, of all countries, which was once thought to be the only country in the Middle East that had not been given the blessings of oil and gas riches. But it turns out that’s not the case; they have some significantly large offshore fields. There is a discussion between the EU and Israel about building a pipeline underneath the Mediterranean, possibly to Greece or into Italy to supply Europe. So, there are a number of different shifts that are potentially coming. And with this war in the Persian Gulf, that is probably going to accelerate some of these. There is another potential that I would imagine is being discussed. Actually, there are two others. And they are very important, were they to come to fruition. One of them is a pipeline that goes underneath the Caspian Sea, between Turkmenistan and Azerbaijan. Turkmenistan is one of the gas giants. We don’t hear about it that often, because almost all of its gas is used domestically or goes via pipeline to China. But, it has a significant interest in servicing Europe at a higher price than it’s getting from the Chinese. That would be a significant amount of natural gas, and it would compete directly against the U.S. But that could be quite significant—that gas would go through an existing pipeline from Azerbaijan across Anatolia into Europe. Turkey might be able to get a certain amount from that as well. So, that’s a different alliance there. The other one, which has been talked about for quite a while, started, stopped, restarted, and is now in a somewhat holding pattern because of the conflict between Pakistan and India more recently, and Pakistan and Afghanistan very recently. And that is the Turkmenistan, Afghanistan, Pakistan, India, or TAPI, pipeline, that runs from Turkmenistan all the way into India, with the other countries being able to gain a bit of natural gas supply from this pipeline. So, what’s happening in the Middle East, is that going to accelerate this? That’s hard to say. Pakistan has a great need for natural gas. Pakistan is one of the countries that is most directly affected, both in oil and petroleum products, as well as natural gas. This might urge Pakistan to be ready to make deals with its Afghan and Indian neighbors about this. We’ll have to see—the geopolitics of energy in Central and South Asia are extraordinarily complex and dynamic. Not that they aren’t anywhere else, but this is a situation that could help all four of those countries. So, there are many possibilities for new alliances. Tselikov: Several sectors of the U.S. economy are heavily reliant upon oil to keep functioning, like shipping, aviation, and manufacturing. Which ones, in your view, are most exposed to prolonged energy instability? Montgomery: I would place them in the order of aviation, shipping, and then manufacturing. Aviation is suffering, and passing its suffering along to those of us who want to fly. Jet fuel prices are through the roof—they’ve probably increased more than almost anything, and that’s true around the world. Pretty much everywhere except in Russia. That's very serious, and when we talk about aviation, we’re not just talking about airlines and those of us who fly, but the industry where a lot of commercial transport and a lot of trade takes place, a lot of delivery, and the moving of goods within countries as well. Aviation is actually quite important. Now, shipping is kind of being caught at a very interesting moment. Marine transport is experimenting globally with a number of other materials to replace what is called bunker fuel, which is a very thick, carbon-rich type of refined petroleum. It has been used for many decades; the alternatives to that range from natural gas to ammonia and even to nuclear power. All of these are being tried at the moment, and some are proving more affordable than others, but the economics are not the same between natural gas and nuclear. Natural gas is obviously subject to a lot of price volatility now—nuclear would be expensive compared to the others to install, but it would last for a very long time without any need for refueling. Perhaps even for the life of a ship; most ships have a 15-18 year life. A nuclear microreactor could use fuel, according to some of the designs, for somewhere between 7 and 12 years, without the need for refueling. These are what is being tried in marine shipping. This is being done not just to save money or to save emissions, but it is being forced on the industry by ports that have now put new air pollution standards in place, particularly of particulate matter that comes out of heavy petroleum fuels. Ports are actually driving a fair bit of this. The U.S. has tried to resist this and tried to keep oil as a source. Mr. Trump was actually able to stop an agreement last year by the International Maritime Organization to impose new standards on ships, which dealt with new particulate matter, nitrogen, and volatile organic compounds exhaust. So that is yet to be done, but it will happen for shipping. Manufacturing is a different kind of animal, because a lot of manufacturing has shifted to gas, and more now is trying to electrify. The other two are oil-based manufacturing, which uses more natural gas, and manufacturing in China and in India, which are really its centers, where they’re using coal a lot more than they’re using gas. So these are very different sectors of industry altogether. Probably the most vulnerable of all is aviation, as I said—and I don’t think that’s going to change. Tselikov: How is instability from this conflict likely going to affect election outcomes, especially the approaching 2026 midterm elections? Montgomery: Well, signs right now are not good for the Republicans, that’s for sure. It’s not good for them even within the party. The party seems to be quite divided over this, including among Trump supporters. He made very strong promises to keep the U.S. out of exactly this kind of conflict. We’re in the sixth week of it. It’s not going to be a forever conflict, but it’s certainly not a short one. We are well beyond that. We haven’t suffered an enormous number of casualties, but people are thinking about the cost of this and the cost to replace it. And they are not necessarily going to be very favorably inclined if this is not resolved in some favorable way for the United States. And frankly, I don’t see any way that Trump is going to find a way out of this that makes him look like he’s a superhero, or even a hero. Now, is it necessarily good for the Democrats? Not necessarily; it depends on how they handle this. But a lot will depend on how this is resolved, if it is. If it continues for another month, it's definitely going to be a hangover until the elections. If it continues only for a few more weeks, it would depend on what other things happen between now and election time. Because we know there aren’t going to be months that go past without some kind of other event. So, it is tough to make predictions, especially about the future, as the famous catcher Yogi Berra said. But it sure doesn't look great for the Republicans at this point. Tselikov: Professor Montgomery, thank you again for agreeing to participate in this interview. Nick Tselikov is a Research Fellow at the Rainier Institute for Foreign Affairs and a former Marcellus Policy Fellow with the John Quincy Adams Society.
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The Iran War and U.S. Grand Strategy in the Middle East: a Discussion with Dr. Daniel Bessner4/21/2026 by nick tselikovInterview  Dr. Daniel Bessner is an associate professor at the University of Washington. His research has explored intellectual history, U.S. grand strategy, and the international relations of the United States. A prolific author, his work has appeared in various publications such as Harper’s Magazine, The New York Times, The Nation, and numerous others. In this interview, conducted in late March 2026, Dr. Bessner discusses the U.S. grand strategic aspects of the ongoing Iran conflict. He views the current conflict as motivated by both long-term strategic aims to dominate the Mideast and President Donald Trump’s more personal motivations. He likewise examines the reasons for the Iran War as well as its implications on Chinese geostrategy. He considers the noteworthy influence of special interests and the ramifications U.S. unilateralism may have on American allies.
Tselikov: Dr. Bessner, thank you for volunteering to participate in this interview. Bessner: Thank you for interviewing me. Tselikov: The Iran War began on February 28 under the leadership of U.S. President Donald Trump and Israeli Prime Minister Benjamin Netanyahu. From your perspective as a historian of U.S. grand strategy, how could this conflict most effectively be positioned within the arc of U.S. strategic thinking? Bessner: I think it’s a conflict that is ultimately linked to the desire of the United States to exert domination and influence over other parts of the world, in particular because the Middle East is a center of strategic reserves of oil. Now, of course, this also has to do with supplying energy to our allies, and I think it’s ultimately related to that. A proximate cause is likely President Trump’s desire to settle what he considers to be the wrongs of recent American history. I think that explains his kidnapping of Nicolas Maduro in Venezuela, and it explains this war as well, as well as his policy vis-à-vis Cuba. Now, I think Trump has also joined on the high end of his own supply—as it were—when it came to the “success of the Venezuelan operation,” in which U.S. special forces were able to rapidly kidnap Maduro and install a leader that has proven more directly amenable to U.S. interests and desires (even though Maduro was himself quite amenable toward the end there). I think Trump thought something similar would happen in Iran, not understanding that it’s quite a different regime, and it’s more ensconced. At least, the ruling party and ruling elites are quite ensconced in Iranian society, in a way that it seems that Maduro, in fact, wasn’t. And so, this has gone more poorly, I believe, than he envisioned that it would. Tselikov: Has the ongoing Iran War shifted U.S. grand strategy aims, or made them more visible from what they had already been in the past? Bessner: I think that it has made clear that going forward—even as the world is becoming more multipolar—the United States envisions the Middle East as a key part of its sphere of influence. And you actually see this in the Trump National Security Strategy. Even though the Strategy is a bit confused and it does contradict itself on various points, on the first pages it lists two regions as crucial: the Western Hemisphere and the Middle East. I think this does suggest that U.S. leaders are going to continue to view the Middle East as within their broad ambit. Tselikov: Does the current Iran conflict fit into longer grand strategy traditions going back to the Cold War? Bessner: Yes, the United States has engaged in numerous regime change operations. The political scientist Lindsey O'Rourke has documented a series of covert regime change operations in addition to overt ones, as occurred, for example, during the Afghanistan and Iraq Wars, and the early Global War on Terror in the 2000s. I think it’s an extension of those previous trends, and you may even look at Maduro, which happened right before the intervention in Iran. So, I think there’s very clearly a grand strategic precedent in U.S. history here. Tselikov: What historical parallels have policymakers in the U.S. used to describe Iran? And in your view, how accurate or misleading have these characterizations actually been? Bessner: The classic one is, I imagine, that political leaders in the past—though I haven’t seen much of it recently—have compared Iran and its Ayatollahs to Nazi Germany and Adolf Hitler. I think one of the unique situations, or unique features, of this current moment is that the Trump Administration clearly does not feel like it has to make a strong case in favor of war, and that it can kind of just do what it wants without having broad U.S. public support in favor of it. For example, even if you look back to the Iraq War, there were a lot of justifications made to invade Iraq. Saddam Hussein was oftentimes compared to Hitler, but you see none of that here. You actually see fewer historical analogies than one might have expected in this war. Tselikov: Has the Iran War benefited U.S. competition with China by denigrating one of its closest strategic partners, or has it bogged down U.S. capabilities? Bessner: No; Iran relies more on China than China relies on Iran. One of the things that the war has had any real deleterious effects on China is that it is watching and being like, “Yeah, let’s continue to let the United States bog itself down in another war.” And that if anything, it shows the United States isn’t able to use its military to achieve strategic victories. So that’s my take vis-à-vis China. But China has also demonstrated that it’s not going to go hard for Iran, and that it will likely, in coming years, cede—to some degree—the Middle East to the United States. Even after it helped broker a normalization agreement between Saudi Arabia and Iran earlier in the 2020s. Tselikov: President Trump has stated that he will not deploy boots on the ground in this conflict. Do you still see a risk of the U.S. falling into a mission creep dynamic, reminiscent of past interventions during the War on Terror? Bessner: There’s always the risk of mission creep, and I think there’s a decent chance we might see Trump set some form of boots on the ground. Maybe not a large military force, like in the Iraq War or Vietnam, but special forces—something along those lines. Tselikov: Do you believe the recent military build-up in the past few days is a reflection of that dynamic? Bessner: Yeah, I think that Trump is frustrated that Iran isn’t agreeing to do what he wants; that they’ve caused serious economic harm in the Gulf, that he could declare the war over doesn’t necessarily mean that Iran is going to stop. So he has to try to coerce things with a show of force; I think it’s related to that dynamic. Tselikov: In your view, was the war’s actual rationale based on strategic and geopolitical thinking, or pressured by special interests in the U.S., such as the Israel lobby and the military-industrial complex? And if both have been significant, do you believe that one has been more influential than the other? Bessner: Well, there’s a foundational strategic idea here, which is that the United States needs to be predominant in the Middle East. So, that’s always there. But this is clearly a war that the Israeli government has wanted for a very long time, because Israel feels quite threatened by Iran, and no other president has been willing to do it. So I think that—however they were able to—Israel had lobbyists in the United States that argued in favor of its particular vision of geostrategy, and were influential in shaping the Trump Administration’s decision to go to war with Israel against Iran. But there are also other interests related to oil, related to Trump wanting to perhaps distract from things like the Epstein files, his belief that a Maduro-like operation could be repeated. So it’s not all Israel or lobbying groups in the United States, but I think they are a significant factor here. Tselikov: Some analysts have claimed that Israel has been ascendant in the Middle East, through, for instance, crippling the Axis of Resistance and signing the Abraham Accords. Would you agree that Israel has been on the rise, and how do you expect this conflict might change its power projection in the region? Bessner: I think Israel is attempting to become the regional hegemon, and I think it has made significant inroads toward that goal in recent years. The problem, though, is that it is a very tiny country whose hegemony is going to rely on essentially an outside power, in this case the United States, supporting it through military material and other forms of aid. So it will likely be an unstable regional hegemony, should it be achieved. But Israel’s position has clearly become predominant in the region in the last several years. Tselikov: Tying the conversation back to China, how is it more specifically interpreting the Iran war in the context of its long-term competition with the United States? Bessner: I imagine it’s interpreted as yet another U.S. blunder in the Middle East. Though it’s unclear what that means for future Chinese geostrategy. Tselikov: Could the Iran War accelerate the formation of a more cohesive anti-U.S. bloc, or are those fears generally overstated? Bessner: I think those fears are generally overstated, but I think it’s shown to people that the United States is a different type of actor, and that it’s not going to even rhetorically support something like the “liberal international order,” which was itself was a bit of a fantasy, but at least formed a type of limit on U.S. discourse, on what the U.S. perhaps even felt it could do in the world. But I think the U.S. is emerging as a different type of actor than it was in the 20th and early 21st centuries. Tselikov: Could you elaborate more on why the formation of an anti-U.S. bloc is an overstated prospect? Do you not believe that there could be more cooperation among existing anti-U.S. powers, like Russia, China, and Venezuela? Bessner: For Venezuela, it’s going to be very difficult, because it’s in the Western Hemisphere, to do something really intense. But, Russia and China are already anti-U.S., or at least trying to carve out their own independent position in the geopolitical arena, so I don’t think this is going to necessarily change that. Its most important consequence will likely be for allies, as yet another data collection point, that the U.S. has been an irrational actor that’s not really interested in listening to other people. Even though the allies have lined up pretty quickly behind the United States and its goals in the region. Tselikov: What do you believe the specific implications of the current Administration’s actions in the Middle East will mean for U.S. allies? Bessner: I think that the United States has shown it’s going to throw its pure power around more than it has in the past, and that this is yet another demonstration of that. And it’s not going to try to build a consensus; it is going to do what it wants to do because it has the power to do so. Now, that’s also perhaps a little bit unique to Trump. So, we’ll have to see how other U.S. leaders act upon this. But I think that the fact that Trump was elected twice suggests that there is a substrate in American politics that can no longer be ignored. Tselikov: Thank you, Dr. Bessner. I appreciate your time and your agreeing to this interview. Nick Tselikov is a Research Fellow at the Rainier Institute for Foreign Affairs and a former Marcellus Policy Fellow with the John Quincy Adams Society.
A Conversation On Diplomacy, Public Service, and Its Future with Former Career Diplomat John Johnson1/26/2026
 A History of Tax Exemption
For centuries, the UK, or more specifically London, has been considered a cornerstone of the global economy. A great proportion of the capital that flows into the British economy stems from foreign high-net-worth individuals (HNIs) who choose to deposit their wealth in the UK to avoid taxes and grow the value of their investments. While the UK was not the permanent home of many of these individuals, many of them established residence in the UK under the non-domiciled (non-dom) tax regime, allowing them to live in the country without paying taxes on their overseas income and assets. Most of these individuals were among the top earners in the country, accounting for over 40% of UK residents with net worths above 6.4 million. The history of the policy dates back to the British Empire, where, in 1799, laws were passed to exempt aristocrats from paying taxes on their assets in British colonies at the time. The law was later modified in 1915 to attract foreign wealth and help the post-war economy recover. In modern times, this tax status has allowed individuals to funnel their wealth into the UK untaxed through dividends or earnings on other foreign-held assets. This mechanism has enabled tax avoidance, because it allowed people who lived in the UK but claimed their “real home” to be elsewhere to avoid paying UK tax on money earned abroad. While tax avoidance is legal, it has raised significant ethical and economic concerns, as it deprives the government of tax revenue and exacerbates wealth inequality. In light of this, the current Labour-led government abolished the non-dom tax regime for UK residents on April 6, 2025, with wealth held in foreign countries now being taxed. The Non-Dom Regime and the Global Economy. Beyond tax efficiency, the non-dom regime also delivered some benefits to the UK by attracting foreign capital, supporting job creation in finance, and boosting local luxury and real estate markets, especially in London. Previously, the non-dom tax regime allowed for gains to be remitted, that is, dividends earned from stocks in a foreign country being sent back to the UK, to be untaxed, having a profound effect on global wealth mobility. HNIs from countries across the Middle East, Eastern Europe, and East Asia capitalized on this opportunity and moved their wealth to the UK as non-doms to become more tax efficient. Furthermore, the remittance basis created an ecosystem of sophisticated tax planning strategies, with firms being set up to help these non-doms create trusts to move their assets to offshore jurisdictions to further minimize any tax liabilities. While this system deprived other nations of much-needed tax revenue, it greatly benefited the UK, with GBP ￡9 billion (USD $11.25 billion) in tax revenue generated by non-dom individuals within the country. Attracting foreign wealth in this manner allowed the UK to use the tax revenue generated to provide public services, expand welfare schemes, and help to alleviate economic disparities. Despite representing less than 0.2% of all UK taxpayers, non-doms proved to have an outsized impact on government tax revenues for a period of time, with the average non-dom paying GBP ￡147000 (USD $195000) in taxes, 15 times higher than the typical UK taxpayer. In recent decades, the status has been increasingly misused, and events have even escalated international tensions. This proved true in the case of the Russian oligarch, Roman Abramovich. Being a non-dom, he was able to transfer significant amounts of wealth earned from the corruption and looting after the collapse of the USSR to the UK without undergoing any tax scrutiny from British authorities. In Britain, he was able to accumulate a vast portfolio of luxury properties in London worth GBP ￡250 million (USD $312.5 million) and acquire the Chelsea Football Club in 2003, which he later sold for GBP ￡2.5 billion pounds (USD $3.34 billion). Abramovich’s strong ties with the Kremlin, alongside the opaqueness of his offshore financial structures, such as his British Virgin Islands holding company, which channeled almost USD $6 billion into hedge funds over two decades, earning USD $3.8 billion in untaxed profits, raising concerns about how the tax policy could enable corruption across the world. This placed the UK in a diplomatically delicate position with increasing pressure from other NATO allies to stamp out such liabilities. In the aftermath of Russia’s invasion of Ukraine in 2022, Abramovich’s assets were frozen by the UK government, and his non-dom status was stripped. The presence of such a person in the UK highlighted the geopolitical vulnerabilities that were inherent in the non-dom framework. In this case, the faultlines of the non-dom regime were exposed as the UK found itself entangled with the diplomatic and financial structures of other countries. These geopolitical risks and structural weaknesses also had clear domestic consequences, particularly as the UK entered a period of prolonged economic stagnation after the global financial crisis. The Domestic Effects of the Non-Dom Tax Regime After the 2008 financial crisis, the UK’s economic growth slowed down steadily throughout the 2010s and slumped even further in post-pandemic years. In 2025, for instance, the UK’s economy had grown by a modest 1.3%. Additionally, this trend of slow growth was mirrored by a decline in the number of non-dom individuals in the UK. In the 2022-2023 tax year, there were around 60,700 non-doms, a 30% decline from 2014-2015. This drop occurred during a weak economic period, raising questions about whether the policy was still serving its intended purpose. A shrinking non-dom population meant that the policy brought fewer benefits with high financial opportunity costs, proving that it was no longer competitive or delivering its intended value. The policy instead became a vehicle for tax avoidance, with many of the UK’s top earners bearing the non-dom status. However, tax avoidance was not the only distasteful factor of the regime: it was also the fact that non-dom residents had adverse implications on local populations. A prominent example of this was in London, where non-dom individuals expanded their property portfolios, but rarely resided or used their many properties. This increased the cost of living and housing, placing an additional strain on many of the UK’s middle and low-income citizens. Despite the investment such individuals bring through purchasing property or performing acts of philanthropy, the benefits are primarily concentrated on providing revenue to law firms, tax planners, and wealth managers instead of the broader economy. Given this, the negative externalities of the regime seemed to outweigh any economic benefits that arose in the UK’s already floundering economy. Verily, calls for change grew increasingly stronger with the new Labour-led government finally gaining consensus in parliament to pass a law abolishing the non-dom regime in April 2025. Critics warned that this would trigger 30% of wealthy, former non-dom individuals to leave the UK for more favourable economic and tax climates. However, the government estimated that an additional GBP￡2.7 billion pounds (USD $3.6 billion) in tax revenue could be generated by ending the regime and taxing those individuals. However, this argument has been weakened by the emerging exodus of former non-doms, which not only undermines the projected tax gains but also risks reducing the investment and spending those individuals once contributed to the UK economy. As a direct result of these changes in the law, it is expected that many of the non-dom individuals will be heading to Italy and other nations that have seized this opportunity to attract the wealth of mobile HNIs. Having contributed billions of pounds to the UK economy via taxes and millions more by purchasing British goods, services, and property, the non-dom tax regime certainly had its benefits. This tax policy played a role in helping London cement itself as a global financial center with the services needed to grow and secure the wealth of mobile HNIs from across the world. Before the end of the status in April 2025, non-doms paid over GBP￡3.5 billion (USD $4.67 billion) in taxes during the 2023-2024 fiscal year. The tax revenue collected from non-doms was beneficial to the UK as it allowed for more public sector funding and for the expansion of national health and welfare benefits. The tax regime also supported entire sectors of financial services, with corporate law firms, tax firms, and wealth and asset management firms serving non-dom clients. These firms helped set up trusts, launch businesses, buy property, and create processes for greater tax efficiency. Competitive Outlook and Policy Recommendations Recently, Italy has been successful in attracting many former non-doms to take up residence and move their wealth with them. The Italian Lump Sum Tax Regime allows these residents to pay a flat annual tax of €200,000 (USD $254,000) on foreign income and assets. Furthermore, this status is available for 15-year terms, which provides long-term tax certainty and has improved the confidence of HNIs in channelling their wealth into the Italian economy. Italy’s Lump Sum Regime allows wealthy individuals to keep more of their wealth than they could in the UK due to a flat tax rate instead of a progressive one. While the implications of ending the non-dom regime may prove beneficial in the short run, the UK’s economy could face a great opportunity cost in the coming decades. The policies that supported non-doms also allowed for London’s position in the financial world to be more robust and enabled it to become the financial heart of Europe. The ending of the non-dom regime, however, is a symptom of wider economic uncertainty in the UK, with the current economic climate hindering the flow of wealth into the nation. Nations like Italy can now easily prop up their financial centers, like Milan, to eventually overtake London’s disproportionate influence on the financial world. To regain London’s economic prominence, the UK must act quickly to ensure that it can continue to be an attractive place for the wealthy and that it can use the revenue generated from that wisely to alleviate domestic problems like growing wealth inequality. While Milan still lags behind London, a very different scenario could be possible in the next few decades as the UK continues to lose wealthy individuals. It is highly recommended that the UK retain its non-dom tax policy and adopt a flat tax at a lower rate than Italy, allowing non-doms to generate tax revenue while also remaining in the country. Overall, a competitive tax policy could certainly help the UK attract the wealth it once did and allow the tax revenue generated to help it overcome its current economic slump. Aarnav Mehta is a second-year undergraduate student at the University of Washington’s Foster School of Business, studying finance and information systems.
 "Hoi An Streetlife" by pilko77 is licensed under CC BY 2.0. In Vietnam, the rapid growth in electric vehicle (EV) purchases reflects the government’s efforts to reduce air pollution. However, experts have pointed out that the EV transition continues to have significant limitations, particularly its reliance on fossil-fuel-based charging infrastructure, which nullifies many of its environmental benefits. The Vietnamese government has responded by launching a new renewable energy policy known as the DPPA (Direct Power Purchase Agreement) to promote clean-energy-based charging infrastructure for the EV industry. However, it is still too early to label it a definitive success.
Why EVs now? Vietnam’s economy is on the rise, positioning the country as a regional economic leader. As Vietnamese incomes rise, demand for personal transportation also increases, which worsens daily traffic congestion. Many older personal vehicles lack effective emission control technology, making transportation one of the main contributors to air pollution in Vietnam. Generally, air pollution in Vietnam has a PM2.5 (particulate matter ≤ 2.5 µm) concentration of 28.7 μg/m³, significantly above the WHO guideline of 5 μg/m³. This reduces life expectancy by one year and costs the country about 5 per cent of GDP per year. In 2016, there were around 60,000 air pollution-related deaths in Vietnam. To address this crisis, the Vietnamese government is increasing support for EVs to reduce greenhouse gas emissions from gasoline-powered vehicles. However, challenges remain. Most EV charging infrastructure relies on electricity from the national grid, solely owned by EVN (Vietnam Electricity). A significant portion of EVN’s electricity still comes from fossil fuels, especially coal. Thus, while EVs reduce direct emissions in urban areas, they can indirectly contribute to air pollution through the coal used to power them. Vietnam’s Response Vietnam hopes to promote renewable energy for EV charging through the DPPA policy. To achieve this goal, the new policy will allow direct cooperation between energy providers and EV charging firms, making the renewable energy market more accessible. The DPPA mechanism offers two models to accommodate different consumer needs: the private grid model and the grid-connected model. The private grid model allows renewable energy producers to construct and operate transmission infrastructure in their own facilities, then connect directly to large consumers without involving the national grid system. Under this model, pricing is determined through negotiation between the parties and is subject only to ceiling rates of the market-based electricity sector. This model will be attractive to EV charging providers located near renewable generation sites. The grid-connected model allows renewable energy producers and consumers to make direct agreements while still using EVN's existing national grid for electricity transmission. The consumers will then pay EVN an additional cost for the use of its grid. This model supports EV charging providers who are not located near generation sources. Therefore, regardless of whether EV charging providers are located near or far from renewable energy generation sites, they can still buy renewable energy directly, thereby decreasing reliance on fossil fuels. Because the DPPA allows direct price negotiation and long-term contracting between parties, renewable energy prices become more stable and less dependent on EVN market prices. In this way, DPPA offers a new path for competition and potentially better pricing. As clean-energy charging prices become more stable, this will significantly support the robust growth of EV consumption. Vietnam hopes to attract more foreign investors in the green sector to develop charging infrastructure ecosystems and address the problem of EV adoption outpacing charging infrastructure development. Early Results and Challenges DPPA was implemented in March 2025. After eight months of the program, there has been little sign of change. The findings from Vietnam’s commerce and industry sector suggest that DPPA’s lengthy and complex administrative processes have complicated renewable energy project rollouts. For instance, existing electricity contracts with EVN are not allowed to switch to DPPA directly. Most projects must go through competitive bidding, which exposes renewable energy producers to higher risks and slows the growth of the private grid DPPA – the very mechanism intended to benefit EV charging providers. Proponents of EV stimulus and renewable energy argue that these policies had a positive influence on investment in clean-energy-based charging infrastructure. The data support the idea that the DPPA mechanism has primarily supported domestic EV firms. In particular, via DPPA, VinEnergo, the energy arm of VinGroup, installed 43 MWp of rooftop solar and 45 MWh of storage capacity, generating around 50 million kWh annually. This infrastructure then supplies power to VinFast’s EV ecosystem. The project is expected to reduce carbon emissions by 33,000 tons per year. The Vietnamese government has also incentivized EV purchases by announcing a ban on gasoline vehicles in Ha Noi and Ho Chi Minh City in 2026. However, the support ends there. Foreign investment is notably absent in Vietnam's EV sector, largely due to many major obstacles stalling the DPPA implementation. How DPPA could improve To optimize the DPPA mechanism’s potential, the Vietnamese government must consider further policy refinements. Authorities should finalize the legal framework by issuing implementation guidelines on who can register, how pricing works, and how EV charging providers will be dispatched through the grid-connected model. The government should also provide clear instructions for existing electricity projects with EVN to switch to DPPA, and streamline the DPPA’s registration process from its current 13 steps to reduce administrative burdens and encourage participation. Furthermore, renewable energy agencies, EV manufacturers, and investors should collaborate to determine appropriate pricing structures and the maximum discounts that all parties can sustain. This collaboration will help establish clear response mechanisms for situations when market prices drop and investor returns cannot be guaranteed. Selecting the right partner is also a critical factor for success and dealing with uncertainty. Partner selection should be based on actual usage needs. For example, consumers who primarily use electricity during daytime hours should partner with solar energy providers, while those who require electricity 24/7 should partner with wind energy providers. Although prices may be higher, this approach ensures that energy supply aligns with usage patterns. Conclusion In sum, Vietnam has vast potential in EV development, but the country still faces critical challenges in its transition. The DPPA mechanism offers a promising pathway to address these concerns by enabling the development of clean-energy-based charging infrastructure. However, policy gaps and legal hurdles stalling progress must be resolved. Only then will the country be able to fully address environmental concerns from EV development. Hailey is studying International Studies at the University of Washington. She is interested in cross-cultural studies, international diplomacy, the environment, and sustainability.
 "Joint-Japan and US Missile Defense Flight Test [Image 1 of 4]" by DVIDSHUB is licensed under CC BY 2.0. The UK is currently capable of defending itself against short-range missile strikes through the Sky Sabre system, and its Type 45 destroyers can eliminate jets, drones, and missiles that enter within a 75-mile radius. The country, however, lacks the capacity to intercept long-range strikes on its own volition. For this, it requires NATO’s advanced early warning systems and the United States’ long-range counter-strike capability, neither of which the UK controls, and the reliability of which is contingent on a US foreign policy which, up until recently, viewed Euro-Atlantic security as sacrosanct. Under Trump, that situation has now changed.
The UK must therefore seek alternative Integrated Air Missile Defence capabilities so that it can secure its skies on its own if need be. I will propose potential solutions. Solution 1: Retrofitting of Naval Assets The first solution is for the UK to adapt its existing fleet of 6 Type 45 destroyers. These destroyers’ surface-to-air warfare capability is already advanced, and they are set to be upgraded with DEW capabilities as early as 2027. Their shortcoming is that they focus specifically on ultra-short-range threats and obviously are not deployed in such a fashion as to defend the UK homeland (they are ocean-going vessels). The UK would need to ensure destroyers were kept close to the homeland for them to form a viable solution. Moreover, they would need to have a rotating patrol that covered the entirety of the British Isles, given the diversity of attack vectors. On the technical level, this kind of upgrade is feasible, with their existing Aster-30 missiles only requiring moderate modification. Their missile-to-ship interfaces would need to be updated. Modern weapon systems don’t just require sophisticated hardware; they also need the latest and most effective software. This underscores the importance of American firms like Anduril and Palantir, whose AI-driven software capability allows for rapid advancement in weapons system targeting and operating systems without much physical change. Solution 2: Land-Based Solutions. Solution 2 is more expansive. It proposes the UK purchase and develop its own homeland missile defence system akin to that of Romania, Poland, and the US. A potential candidate for this system would be the Patriot PAC-3 MSE missile system. Notably, the system is mobile, which sits well within the UK’s existing approach of prioritizing mobile options rather than relying on vulnerable fixed launch bases. Additionally, the political implications of a fixed missile launch system like Patriot are large. It would indicate the UK is already on some kind of war footing (which it isn’t) and would stoke alarm in the population. The primary barrier to adopting this kind of system is the cost, which could rise up to $5 billion USD. The UK, in its recent Strategic Defence Review, only allocated $1.3 billion USD for revamping its Integrated Air Missile Defence (IAMD). In this instance, enthusiasm and the reality of cost do not align. Strategic Conclusions Beyond the technical and financial decisions for an IAMD, what does the issue say about the UK’s strategic and defence position more broadly? For starters, the UK’s ambition is not sufficient. In a world of attritional modern warfare, where drones and autonomous systems are set to become the norm, the UK is still reliant on NATO to perform much of its air defence. In addition to the systems threat, China and Russia continue to experiment with nuclear payload delivery mechanisms, and the return of nuclear testing by the Trump administration functionally ensures that the arms race is set to resume. If the UK wishes to protect an ironclad airspace and retain a land army capable of defending NATO’s eastern flank, then its IAMD ambition needs to accelerate, and fast. The question of the UK and Europe’s strategic autonomy has never been more pressing in the face of realigning American interests and the rapidly changing nature of warfare. Moreover, the UK faces difficult decisions on where to place its slowly expanding defence budget. After years of supplying the Ukrainian frontline, its conventional armaments supplies are already low. Ministry of Defence planners must choose between seed funding for novel IAMD solutions like the ones characterized above, or better funding for their existing conventional systems. This conundrum will only grow in magnitude as global stability continues to be tested. The UK’s predicament is therefore bleak. Years of geo-strategic thought in Whitehall have relied on the postulate of NATO cohesion backed by US hard power. This is no longer the case. If the UK wants to remain safe, it needs to drastically enhance defence spending and direct this spending to weapons and software systems that can keep pace with the rapidly evolving nature of global conflict. William Barclay is a Junior Exchange Student from the University of Edinburgh studying Philosophy and Politics at the University of Washington.
 "Tonlé Sap, Cambodia" by jafsegal (Thanks for the 4,5 million views) is licensed under CC BY 2.0. The term microfinance refers to a system of small-scale lending and financial services designed to promote economic inclusion among low-income individuals. It is often framed as a pathway to poverty reduction and a tool for economic empowerment. This article examines the shift from development-oriented lending to profit-driven, financial operations—known as the commercialization of microfinance— in Cambodia, and how it disproportionately negatively impacts women. Increasingly driven by foreign investment, microfinance has transformed from a tool of empowerment into one of debt dependency and gendered financial vulnerability.
The Paradox of Debt as Development Originating in Bangladesh’s Grameen Bank during the 1970s, microfinance was viewed as a solution to underdevelopment, specifically through investment into small-scale entrepreneurship. Access to credit is widely understood as a key driver of economic development, enabling marginalized populations to form businesses, smooth consumption, and participate more fully in local economies. Lending for women, especially, was promoted as a path to entrepreneurship and household uplift. Microfinance became a central tool for this purpose because low-income women are traditionally excluded from formal banking, lack collateral, and face structural barriers that make small, unsecured loans one of the few accessible forms of credit. As the microfinance model expanded globally, it became a staple in development policies and gained strong support from NGOs and multilateral institutions. In Cambodia, microfinance was introduced in the 1990s as a means of rural poverty reduction and post-conflict reconstruction. By the 2010s, the sector expanded dramatically, with women comprising 64% of borrowers. The emphasis on lending to women arose from financial and social considerations. Women were perceived as reliable borrowers with higher repayment rates and strong community ties. In Cambodia, this perception was reinforced by the country’s post-conflict reconstruction period, when women increasingly assumed responsibility for household finances and community support networks following years of violence and demographic disruption from the Khmer Rouge regime. Their central economic roles made them especially visible to lenders as stable and disciplined clients, even compared to borrowers in neighboring Southeast Asian markets. This dynamic reframed microfinance as both low-risk and socially beneficial, prompting international development banks and private investors to promote an emerging “ethical finance” investment sector bolstered by gender-lending targets. These narratives became crucial in the rapid expansion of Microfinance Institutions (MFIs) throughout the 2000s and 2010s. However, as foreign capital entered the market, MFIs increasingly shifted from community-based lending to commercial operations. This foreign dominance also gave external actors significant influence over Cambodia’s financial inclusion agenda, shaping domestic development policy around investor priorities rather than local welfare outcomes. Institutions sought to scale quickly, to absorb foreign funds, and deliver competitive returns. Interest rates rose, repayment schedules tightened, and performance metrics began to emphasize portfolio growth over development outcomes. For many female borrowers, these changes meant higher financial pressure and reduced flexibility, as loans became governed by commercial repayment demands. Women’s social networks were often used to enforce repayment through peer pressure and public accountability. As a result, the characteristics that initially symbolized empowerment were instrumentalized to secure foreign investor confidence. The resulting narrative proved powerful in marketing Cambodia’s microfinance sector to global investors. This transformed what began as community-based lending—small loans issued through local groups or village networks, decided based on trust and shared accountability rather than profit target—into one of the most commercially profitable credit systems in the developing world. Over the past two decades, Cambodia has developed one of the world’s most saturated microfinance markets, dominated by foreign investment and commercial motives. The country’s experience illustrates how global capital and gendered development policy intersect: women, who comprise roughly two-thirds of borrowers, sustain household debt systems that serve to guarantee investor returns more than local economic mobility. Moreover, a 2023 study noted that approximately 15% of Cambodian borrowers were dedicating more than 70% of their monthly income to micro-loan repayments, a metric frequently exceeded among women. Taken together, the influx of foreign capital and expansion of financial technology illuminate a broader pattern in which debt becomes commercialized and gendered economic inequality becomes structurally embedded. The Feminization of Debt The phenomenon described as the “feminization of debt” provides a useful lens to illustrate how empowerment narratives have become intertwined with commercial lending. When Grameen Bank founder Muhammad Yunus first described microcredit as a means to provide “credit as a human right,” the model embodied a vision of development rooted in empowerment and social mobility. However, in Cambodia, that vision has been reshaped by foreign capital and profit logic. The rise of financial technology and mobile-based lending further accelerated this shift, turning microloans into scalable, tradable assets, valued as predictable revenue streams. Digital platforms allow lenders to issue large numbers of small loans quickly, track repayment in real time, and bundle these loans into portfolios that generate steady, short-term returns. However, this model is widely viewed as unsustainable because it depends on continuous borrowing from low-income women to maintain investor returns, even when household debt levels are already high. The digitization of credit, often through platforms backed by Western or regional investors, also extends global finance into Cambodia’s rural economy, raising concerns about regulatory oversight and data governance. The nation’s regulatory institutions remain comparatively small and under-resourced relative to the scale of its ballooning microfinance sector, making it difficult to monitor digital lending practices or enforce borrower protections. By 2023, Cambodia’s total microfinance debt reached USD $18 billion, equivalent to 38.8% of GDP, illustrating how deeply debt-based development has penetrated the national economy. As profitability became the defining measure of success, repayment rates and portfolio growth eclipsed poverty reduction as Key Performance Indicators. Women occupy the center of this financial system, both as its intended beneficiaries and as the foundation of its stability. The perception of women as ideal borrowers, reinforced by early data on repayment discipline, attracted foreign investors and development institutions seeking to align profitability with social impact. Yet the same traits that made women attractive to lenders have intensified their exposure to financial risk. Studies across Cambodia indicate that female borrowers now carry disproportionate debt burdens, often prioritizing loan payments over essential household spending. Underscoring how the feminization of debt intersects with broader structural extraction, the 2025 Debt report from Human Rights Watch found that in Cambodia’s Ratanakiri province, microloans backed by “soft titles” were issued to Indigenous borrowers despite inadequate income, leading to forced land sales, child labour, and reported debt-related suicides. Female borrowers in these contexts face layered vulnerabilities, both gendered and tied to ethnic and land-rights-based inequalities. Within this process, the “feminization of debt” takes shape. Development banks and MFIs frequently emphasize gender inclusion as a Key Performance Indicator, yet repayment performance takes priority in defining outcomes. As a result, women’s participation sustains the industry’s moral legitimacy while ensuring its profitability. Women’s social and familial obligations, particularly their roles as primary caregivers and financial managers, make them more susceptible to coercive repayment pressures and the moral burden of household debt. Their labor and reputational capital effectively subsidize the stability of Cambodia’s microfinance industry, transforming private financial risk into a gendered social one. In practice, the financial gains of this system in Cambodia accrue primarily to foreign-owned institutions and investors, while the risks are shouldered by low-income female borrowers. The gendered framing of microfinance has evolved into a mechanism through which financial vulnerability itself becomes marketable. Policy Recommendations The findings from Cambodia’s microfinance sector suggest that using microloans as a mechanism for empowerment while still operating on profit-driven models creates fundamental misalignment. To realign microfinance with its original developmental goals, policy needs to prioritize borrower protection and local accountability. Regulatory frameworks should cap interest rates, require transparent loan disclosures, and prohibit using land titles as collateral for small loans--one of the leading causes of dispossession among female borrowers in Cambodia. While these measures could potentially limit short-term inflows by reducing the high returns that currently attract foreign investors, they would strengthen financial stability and protect rural assets from extraction. Lowering interest rates may make Cambodia’s microfinance sector less appealing to foreign capital, but it would also help shift the system toward sustainable lending practices that prioritize borrower welfare over investor yield. Additionally, international development banks and foreign investors should be required to report on gender-differentiated impacts and long-term social outcomes, rather than exclusively reporting repayment rates. At the local level, Cambodia should promote hybrid or co-op microfinance models led by women’s associations or community-based organizations. These models retain profits within the community and lessen dependency on foreign capital, though they would require state-backed guarantees and capacity-building support to achieve scale. True sustainable empowerment will require shifting from debt-based development to inclusive financial systems that emphasize savings, grants, and direct social investment. Aisha Rana is a first-year undergraduate student at the University of Washington’s Foster School of Business and Jackson School of International Studies |