By Ilyos Shaymardonov, UWED Master’s Student, IAIS Research Intern   Introduction.The outbreak of the US-Iran war in early 2026 shook the global geopolitical architecture and put the strategies of major powers to a direct test. In the view of many experts, this conflict appeared to open the door to ready-made strategic opportunities for China. It was assumed that while the United States was entangled in another costly military campaign in the Middle East, Beijing would seek to fill the resulting vacuum, deepen its ties with Tehran, and accelerate its challenge to American leadership. However, this hypothesis misinterprets how China actually behaves amidst geopolitical instability. An analysis of the situation reveals that China’s response to the US-Iran war demonstrates not expansionism, but a doctrine of calculated restraint. This, in turn, is a deliberate position stemming from China’s firm conviction regarding global economic vulnerabilities, its long-term investments within the framework of the «Belt and Road» initiative, and the belief that systemic stability, not short-term tactical gains, is the primary condition for its sustainable development.   The foundations of the China-Iran strategic partnership: The «Belt and Road» and a 25-year agreement To understand China’s position during the war, one must first understand the nature and depth of the pre-war China-Iran relations. In March 2021, China and Iran signed a 25-year Comprehensive Cooperation Agreement. According to him, China has committed to investing up to $400 billion in the country’s infrastructure and energy sector in exchange for stable supplies of Iranian cheap oil. This agreement directly linked Iran to the «One Belt, One Road» initiative, transforming Tehran into a crucial hub connecting Central Asia with the Persian Gulf, and this corridor would allow China to bypass strategic maritime chokepoints dominated by the U.S. Navy. Iran’s official accession to the Shanghai Cooperation Organization in 2023 further solidified this closeness in a formal-institutional sense within the network of regional institutions led by China. The strategic logic underlying this partnership is multifaceted. As noted by Iranian expert S. Madani, the «Belt and Road» initiative is not merely an infrastructure program but also serves as an economic tool designed to expand its sphere of influence and acquire resources amidst systemic constraints. For Iran, this initiative serves as a mechanism to maintain institutional stability and bypass sanctions, providing access to markets and capital that are difficult to attain under Western pressure. In this way, China became the primary buyer of Iranian oil, purchasing approximately 90% of the country’s crude exports. The Hudson Institute describes this relationship as crucial for Iran’s economic survival and central to Beijing’s concept of creating a secure land-based energy corridor free from U.S. maritime dominance. From a geopolitical standpoint, this cooperation served China’s overarching interest in establishing a multipolar world order. Iran’s strategic geographic location connecting Central Asia, the Middle East, and the Persian Gulf has given China a diplomatic edge in a region where U.S. influence has historically been dominant. Analysts at the NESA Center observe that China’s geopolitical expansion into the Middle East is being carried out incrementally and in a risk-averse manner to avoid provoking a sharp reaction from regional or international powers. In this process, cooperation with Iran serves as a vehicle for strengthening China’s position in the Middle East without engaging in direct conflict.   Calculated restraint: why is Beijing not joining the war? Despite the depth of Sino-Iranian relations, China’s reaction to a potential US-Iran war has been notably restrained. Beijing lacks a permanent military presence in the Greater Middle East, has no security commitments to Tehran, and does not possess the real capability to shift the military balance in such an intense conflict. Deploying an aircraft carrier group to the region to protect Chinese oil tankers would be an extremely dangerous risk for a navy that is only just beginning to develop its open-sea capabilities. This military restraint is not an admission of weakness but rather a rational response to the U.S.-China rivalry. Analysts from «Foreign Affairs» note that Chinese leaders do not view every U.S. failure as a Chinese success, nor do they believe it is necessary to seize every geopolitical opportunity. Beijing’s calculus will be determined by whether the situation stabilizes or, conversely, descends into chaos. A regional conflict centered on the Strait of Hormuz is, in turn, a source of such chaos. This approach contrasts with the «win-lose» logic ingrained in Washington’s strategic debates. While American analysts view China as the biggest beneficiary of America’s overextension, Beijing sees a destabilizing crisis that threatens the open trading environment which is the foundation of its economic model. China’s diplomacy is meticulously crafted to reflect this very position. While Chinese Foreign Minister Wang Yi called for maintaining the diplomatic momentum in the negotiations, Xi Jinping openly criticized the US blockade of Iranian ports as a dangerous and irresponsible act and leveraged his ties with Pakistan to urge Iranian negotiators to soften their stance. The Atlantic Council notes that this two-pronged policy-namely, openly condemning U.S. coercive measures while covertly applying diplomatic pressure on Tehran – clearly shows Beijing’s aspiration to present itself as a responsible mediator rather than a sponsor of the war.   Economic vulnerabilities and tensions in the strait of Hormuz The most significant systemic challenge China faces in this conflict is in the energy sector. China is the world’s largest oil importer, with about 70% of the country’s needs met by foreign sources, of which approximately one-third was previously transported through the Strait of Hormuz. The de facto closure of this strategic transit corridor since late February 2026 has dealt a severe blow to China’s energy security. However, Beijing is not panicking, and this composure is the result of many years of meticulous preparation. China had been building up large crude oil reserves since 2025, a time when an oversupply in the global market and low oil prices created a unique opportunity to accumulate reserves at a low cost. Beijing is also consistently pursuing a policy of diversifying its supply sources. Following the restoration of ties temporarily severed by U.S. sanctions, China’s national oil companies have resumed purchasing Russian oil by sea. Meanwhile, the «Power of Siberia 1» pipeline continues to deliver Russian gas in volumes exceeding its designated capacity.  According to an analysis by the Stimson Center, the war has accelerated a simultaneous two-way approach: purchasing from different sources and investing in green energy. Specifically, Beijing is expanding China-Algeria energy agreements through Sinopec and intensifying cooperation in clean energy with Morocco and Egypt to reduce long-term dependence on the Persian Gulf. Disruptions at Qatar’s Ras Laffan liquefied natural gas facility have led to a declaration of force majeure on contracts with Chinese buyers, starkly highlighting the real economic costs Beijing is facing. The rising cost of energy, delays in cargo deliveries, additional insurance payments, and expenses related to rerouting shipping lanes are increasing production costs in China’s export-oriented industries. This, in turn, is causing a decline in global market demand at a time when Chinese manufacturers are facing pressure from excess capacity domestically. None of this aligns with Beijing’s strategic interests, which reinforces the key analytical conclusion that the war is not the geopolitical gift for China that Washington analysts sometimes suggest.   A diplomatic approach and a multipolar worldview The prevailing view emerging from the conflict – that the actions of the U.S. and Israel were an act of aggression, that Iran’s response was reactive in nature, and that this conflict clearly demonstrates the price of American hegemony – is nearly identical to Beijing’s long-standing criticism of U.S. global policy. China’s persistent call for multipolarity is taking on new meaning in the current context. The fact that the economies of more than 145 countries now trade more with China than with the U.S., combined with the serious precautions U.S. allies in Europe and Asia are taking due to energy supply disruptions, reinforces the credibility of a structural basis for a more fragmented international order. China’s vote against UN Security Council sanctions resolutions concerning Iran and the Middle East as early as March 2026, despite calling for Tehran to refrain from direct material support, will strengthen its reputation as a counterweight to Western institutional dominance. An analysis of the Belt and Road Initiative in the Middle East by the Andersen and Sending think tanks sheds light on this matter. These institutions have consistently portrayed China’s infrastructure investments as a strategic threat, often significantly exaggerating the true scale of Belt and Road projects in the region. However, it is precisely this approach that inadvertently validates China’s self-portrayal as a constructive alternative power. The war will accelerate this process, as it will provide clear proof for an argument long made by critics of U.S. hegemony. Namely, that America’s military adventures create such instability that the existing order cannot absorb it without suffering losses.   Limits and long-term implications of China’s strategy China’s strategy of calculated restraint is not without its own weaknesses and contradictions. The most prominent of these is the problem of «dual-use technologies. According to reports from the Foundation for Defense of Democracies, China-affiliated firms provided commanders of the Islamic Revolutionary Guard Corps of Iran with high-resolution satellite imagery of U.S. military installations, including the Prince Sultan Air Base. Whether such activities are state-sanctioned or are the actions of commercial entities operating in a «gray area» this exposes Beijing to counter-pressure from Washington and undermines its position as a neutral diplomatic intermediary. The long-term strategic loss could be even more severe. China had relied on a self-confident, defiant Iran with nuclear ambitions as the cornerstone of its «Belt and Road» strategy in the Middle East. Having suffered a heavy blow and been caught in a whirlwind of internal conflict, Iran can no longer serve as a reliable factor to distract American attention. The «Belt and Road» projects, which are dependent on Iran’s ports, railway corridors, and energy infrastructure, are now facing even greater instability. The idea of establishing a secure land-based energy corridor that bypasses key maritime points dominated by the U.S. has been dealt a serious blow. Furthermore, China’s long-standing efforts to simultaneously support Iran while balancing relations with the Arab monarchies of the Persian Gulf have been exposed as inherently contradictory. The Atlantic Council’s scenario analysis outlines four possible trajectories for the post-war geopolitical order, ranging from a limited U.S. success that maintains systemic stability to a scenario where China responds with significant indirect intervention. Such an intervention would include providing advanced intelligence and logistical support to Iranian forces, as well as applying coordinated pressure in parallel theaters like the Taiwan Strait, thereby transforming the regional conflict into a systemic confrontation. Beijing will definitely prefer the first direction. Any escalation in the second direction would mean a defeat, not a victory, of the Chinese strategy.   Conclusion. China’s role in the geopolitics of the US-Iran war is neither consistent with the statement that «Beijing is the main beneficiary of the war» nor with the dismissive statement that «China is simply not in this process». Evidence suggests that Beijing is following a well-thought-out doctrine of restraint. It bears real economic costs and skillfully manages structural vulnerabilities in the energy sector. It is using the diplomatic fallout from American military action to advance its own idea of a multipolar world and is conducting covert pressure through channels that preserve the possibility of rejection. This position reflects a strategic culture that sees systemic stability as a necessary condition for national power and sees America’s excessive expansion as a cautionary lesson rather than an opportunity to expand. This war, however, exposed the limitations of a grand strategy built on weak cooperation. A weakened Iran, disrupted Belt and Road corridors, and tight control over the transfer of dual-use technologies are all losses that Beijing did not choose and cannot easily compensate for. Whether China’s abandonment of tactical options in favor of strategic patience serves its long-term interests in the Middle East will depend on how and how quickly the war ends. The oversimplified «win-lose» pattern that prevails in Washington’s China-related debates is more of a blur than an illumination. In this crisis, China’s strength lies not in what it has done, but in what it has managed to discipline itself not to do. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

The global economy is undergoing one of the largest infrastructural technological shifts since the Industrial Revolution, driven by the formation of a global artificial intelligence infrastructure. The global economic architecture has entered a qualitatively new phase of technological development, the key feature of which is the transition from a predominantly software-based model of the digital economy to a capital-intensive infrastructural model of artificial intelligence (AI). While in previous decades software products and intellectual property were the main drivers of value growth for technology companies, the material computing infrastructure is now becoming the foundation of economic dynamics. This involves the construction of large data centers, the procurement of specialized graphics processing units (GPUs), the creation of cooling systems, and the development of energy grids capable of supporting the operation of high-performance computing clusters. In effect, a new technological ecosystem is taking shape, where the physical provisioning of computing power is acquiring strategic importance comparable to the role of transportation infrastructure or energy systems during the industrial era. Statistics on the distribution of data centers by country provide insight into the actual configuration of the global AI infrastructure. As of early 2026, there are approximately 10,800large data centers worldwide, and their geographic distribution is highly uneven. The United States remains the absolute leader, where about 3,960 centers are located, accounting for approximately 37% of the global infrastructure. Thus, the US possesses nearly four out of every ten data centers globally, providing the country with a significant technological advantage in cloud computing and AI systems development. Significantly smaller, yet notable infrastructural clusters have been established in the United Kingdom (498), Germany (470), China (365), and France (335). Other major players include Japan (249), Australia (268), India (275), and Brazil (198). Notably, despite active state support, China currently lags behind several European countries in terms of the number of data centers. The geographical structure of this infrastructure indicates a high concentration of computing power in the developed economies of North America, Europe, and East Asia, while a significant portion of countries in Asia, Africa, and Latin America possesses only limited capabilities for hosting such facilities. This asymmetry creates a persistent gap in access to computing resources and increases the dependence of many nations on the infrastructure of leading technological hubs. The scale of investment in AI infrastructure has already reached levels comparable to the largest industrial projects in history. According to available estimates, the aggregate capital expenditures of the four largest US tech corporations—Microsoft, Alphabet, Meta, and Amazon—amounted to between $370 billion and $700 billion by the end of 2025. If current growth rates persist, their investments could exceed 2% of the US GDP. For historical comparison, a similar scale of capital investment was observed during the construction of the US national railway network in the 19th century, which laid the foundation for the country’s industrial leadership for decades to come. Unlike those projects, however, the current technological infrastructure is being built primarily by private capital and with a significantly higher degree of uncertainty regarding future economic returns. At the same time, concerns are increasingly voiced within the expert community regarding the possible formation of an infrastructural bubble in the computing power market. Major tech companies are building massive data centers and purchasing millions of specialized processors based on expectations that new generations of AI models will drive a sharp increase in labor productivity and create fundamentally new markets for digital services. However, the actual scale of commercial demand for such capacities remains uncertain. If the anticipated economic impact of AI adoption falls short of projections, a significant portion of the built infrastructure may end up underutilized. Unlike traditional infrastructure assets, such as transportation systems or energy grids, data center equipment has a relatively short technological lifecycle. Specialized chips become obsolete within just three to four years, requiring constant upgrades and additional investments. Consequently, the risk of accumulating unneeded computing power is compounded by the rapid rate of technological obsolescence of the equipment, making the current industry development model particularly sensitive to demand fluctuations. A prime example of mounting financial risks is the situation surrounding the American corporation Oracle. The company, long considered one of the key players in enterprise software and cloud solutions, found itself under significant debt pressure by the spring of this year. According to various estimates, its total debt obligations exceeded $137 billion. In a high-interest-rate environment, such a debt burden severely limits the company’s ability to further expand its infrastructure projects. Major rating agencies already warn about the likelihood of downgrading the company’s credit rating to the high-risk category. Attempts to raise additional funding through bond and stock issuances provoked a negative market reaction, resulting in the company’s stock price more than halving since the fall of 2025. Corporate circles are discussing possible measures for massive staff reductions and the revision of investment plans. A particular vulnerability of the current financial structure is the interdependence between large tech companies and AI developers. For instance, the massive Stargate infrastructure project, aimed at developing computing power for the leading developer OpenAI, entails Oracle’s participation as a major cloud infrastructure provider. Meanwhile, OpenAI itself remains an unprofitable company, with projected operating losses that could amount to approximately $14 billion in 2026. A complex system of mutual investments and financial flows has formed within the industry, where funds invested by some tech companies into AI developers are subsequently channeled to pay for the cloud services of other companies, which, in turn, use the acquired resources to purchase equipment from processor manufacturers. Such a closed-loop financing structure amplifies systemic risks, as a failure in any single element of the chain could trigger a chain reaction in a market valued at trillions of dollars. In addition to financial constraints, the development of AI infrastructure faces severe energy barriers. Modern data centers require massive amounts of electricity, and their consumption continues to grow rapidly. According to estimates by American think tanks, in the coming years, data centers could consume up to 17% of all electricity generated in the US. This load puts significant strain on existing power grids, many of which were built decades ago and are not designed for such intensive consumption. In a number of regions, including the states of Virginia and Texas, action plans are being discussed in the event of grid overloads and power outages. In response to this situation, US federal regulatory agencies have initiated stricter rules for connecting large data centers to the national power grid. The new regulatory policy effectively requires tech corporations to independently invest in the construction of generating capacities and the modernization of regional energy infrastructure. This has led to the emergence of a new trend, dubbed the tech-led "nuclear renaissance" within the expert community. Microsoft initiated a project to modernize and restart a reactor at the Three Mile Island nuclear plant, costing approximately $1.6 billion. Amazon acquired exclusive rights to use the power output of the Susquehanna nuclear power plant, while Google signed contracts for the development and deployment of small modular reactors (SMRs). Thus, tech corporations are gradually transforming not only into digital infrastructure operators but also into major investors in the energy sector. Nvidia continues to play a pivotal role in the new technological ecosystem, having effectively become the monopoly supplier of specialized GPUs for AI systems. The company’s market capitalization is approaching $3 trillion, with up to 90% of its revenue coming from the data center segment. However, this position is also facing new challenges. Tighter US export restrictions have limited the supply of specialized processors to the Chinese market and have already led to multibillion-dollar write-offs. Simultaneously, the technological rivalry between the US and China is intensifying. China is implementing an alternative model for computing infrastructure development based on centralized state planning. The national "Eastern Data, Western Computing" program envisions locating large computing centers in regions with affordable electricity and favorable climatic conditions. This allows for a significant increase in data center energy efficiency and a reduction in operational costs. According to some estimates, China’s technological hardware lag behind the US could narrow to a matter of months. At the same time, the Chinese AI operational model entails significant resources being directed toward internal control, data verification, and compliance with state information security standards, which reduces the efficiency of computing power utilization. An additional factor amplifying the strategic importance of AI infrastructure is its rapidly growing role in the military domain. In recent years, leading powers have increasingly viewed computing power and machine learning algorithms as key elements of future military superiority. Unlike previous technological revolutions, where individual types of weapons played a decisive role, the current phase is characterized by the integration of AI into decision-making, reconnaissance, and operations management systems. This means that control over computing infrastructure is gradually turning into a critical factor for national security and military balance. As of today, one of the most prominent examples of AI application in combat conditions has been the military conflict in the Middle East. During the military campaign against Iran, US military structures have been actively utilizing Project Maven, a system developed by Palantir. The system is designed to process massive arrays of intelligence data coming from satellites, unmanned aerial vehicles (UAVs), and other sensor platforms. It automatically identifies potential targets, ranks them by priority, and generates recommendations for operators. The system also integrates Claude, a large language model by Anthropic, which is used to process intelligence reports and accelerate information analysis. According to military experts, the application of such algorithms has allowed for a sharp increase in the speed of operations: in the first 24 hours of the campaign alone, over a thousand targets were identified and struck in the area of operations, and by mid-March, that number had exceeded three thousand. The algorithms are capable of generating up to a thousand target recommendations per hour, which significantly exceeds the capabilities of traditional human analysis. This experience has revealed both the advantages and limitations of such technologies. Proponents of AI application point to increased strike accuracy and the reduction of human error in intelligence analysis; however, the effectiveness of such systems decreases in complex weather conditions and when decoys are used. Furthermore, the use of civilian AI models in military operations has already sparked legal and political disputes between defense departments and tech companies. Nevertheless, military leadership views AI as a crucial tool for reconnaissance and targeting, and the ongoing campaign in the Middle East has become one of the most large-scale tests of these technologies. In a broader context, this indicates that the rivalry between the US and China in the sphere of computing power is acquiring a military-strategic dimension. Amid the rapid growth of computing capabilities, international discussions on regulating the sector are intensifying, including limits on the volume of computing resources held by private companies and the licensing of high-performance GPU usage. Until recently, this idea was considered fringe, but today it is gradually entering the agenda of intergovernmental consultations. The formation of the global AI infrastructure is becoming one of the key economic processes of the decade. On the one hand, it unlocks new sources of growth; on the other hand, massive investments and energy constraints create significant systemic risks. Strategically, this signals the formation of a new foundation for the global balance of power. While in the 20th century the key factors of influence were industrial potential, energy resources, and nuclear technology, today these are joined by a state’s ability to provision massive computing capacities and control AI infrastructure. This makes the possession of a sovereign computing base one of the core conditions for maintaining economic and technological independence in the long term. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

By Islamov Bositkhon, UWED undergraduate, intern at IAIS   On April 8, the United States of America and the Islamic Republic of Iran succeeded in reaching a temporary two-week ceasefire following a 40-day armed confrontation. U.S. President Donald Trump, as well as the Iranian leadership, acknowledged Pakistan’s significant role in facilitating this agreement, emphasizing the effectiveness of its mediation efforts in preventing further escalation of the conflict. In this context, a legitimate question arises: why did Pakistan—rather than other regional actors such as Turkey or Egypt – assume the key mediating role between the conflicting parties?   Pakistan–Iran Relations Pakistan and Iran share a long border exceeding 900 kilometers, which objectively creates a high degree of interdependence in the sphere of security. Iran was the first country to recognize Pakistan’s independence in 1947, while Pakistan, in turn, recognized the Islamic Republic of Iran following the Iranian Revolution. Despite these historical ties, bilateral relations have been characterized by ambivalence. In the 1990s, the two states adopted divergent positions on the Afghan issue, which contributed to tensions. During the 2000s, relations gradually improved; however, in January 2024, an armed incident occurred in which both sides launched missile strikes on each other’s territories, justifying their actions as counterterrorism operations. Nevertheless, the crisis was rapidly de-escalated, indicating the existence of functional mechanisms for conflict management. A significant improvement in relations took place in 2025 amid a series of regional crises, including a short-term war between Israel and Iran, as well as an armed confrontation between India and Pakistan. Pakistan adopted a more explicit position by condemning Israel’s actions, in contrast to India, which maintained neutrality. This strengthened the perception of Pakistan as a more predictable and reliable partner for Iran. At the same time, Pakistan began to demonstrate rapprochement with the United States. Notably, Pakistan’s Chief of Army Staff, Asim Munir, visited the White House in June 2025 and held talks with President Trump.Furthermore, Pakistan proposed nominating Trump for the Nobel Peace Prize. This dual orientation in foreign policy enabled Pakistan to occupy a unique position as a “bridge” between Washington and Tehran. A key factor lies in Pakistan’s distinctive diplomatic status. Following the Iranian Revolution of 1979, Iran has lacked direct diplomatic relations with the United States. Under these circumstances, Iranian interests in the United States have traditionally been represented through Pakistani diplomatic channels.   Pakistan–United States Relations: From Tension to Pragmatic Rapprochement Historically, relations between the United States and Pakistan have been complex. Following the terrorist attacks of September 11, 2001, Washington repeatedly accused Islamabad of insufficient efforts in combating terrorism. The peak of tensions occurred in 2011, when U.S. forces eliminated the leader of Al-Qaeda, Osama bin Laden, on Pakistani territory without prior notification to Pakistani authorities. Nevertheless, beginning in mid-2025, a gradual normalization of relations has been observed, driven by the pragmatic interests of both sides. Pakistan undertook a number of steps toward the Trump administration, which contributed to the restoration of political dialogue.   The Strategic Importance of the Middle East for Pakistan: Energy Dependence The Middle East holds critical importance for Pakistan, primarily in the energy domain. More than 80% of its imported oil originates from countries in the region, including Saudi Arabia, the United Arab Emirates, and Qatar, with the Strait of Hormuz serving as the key transit route. With the outbreak of the conflict on February 28, Iran significantly restricted maritime traffic through the Strait of Hormuz, triggering a global energy crisis. For Pakistan, the consequences were particularly severe: by early April, fuel prices had risen by approximately 54%, leading to widespread social protests and intensifying inflationary pressures. An additional factor was the collective security agreement between Pakistan and Saudi Arabia, concluded in September 2025. In essence, it resembles the principle of collective defense analogous to Article 5 of NATO. In the context of Iranian missile strikes on Saudi territory, Pakistan faced the risk of direct involvement in the conflict. Such a scenario could have led to large-scale escalation, including the activation of terrorist groups in the border regions of Balochistan and Sistan.   Pakistan’s Diplomatic Initiatives Pakistan actively promoted the negotiation process. An important step was the meeting of foreign ministersfrom Turkey, Saudi Arabia, Egypt, and Pakistan, initiated by Islamabad, aimed at developing potential scenarios for conflict resolution. Subsequently, Pakistan’s Deputy PM, Ishaq Dar, visited China, where the parties formulated a comprehensive settlement plan consisting of five key points designed to facilitate de-escalation and stabilization. The reconciliation achieved between the conflicting parties is expected to be further developed through negotiations in Islamabad, scheduled for April 10, with all sides having agreed to participate.   Conclusion In conclusion, Pakistan’s mediation efforts proved effective in facilitating conflict resolution. Owing to a unique combination of factors acceptable to both the American and Iranian governments, Pakistan emerged as a platform through which the conflicting parties were able to exchange information—something that previous negotiation rounds in Qatar and Oman had failed to achieve. Given the existential implications of the Iran–U.S. conflict for Pakistan, its authorities acted actively and decisively despite considerable challenges and pressure from both sides. Moreover, Pakistan engaged both regional and global actors, including China, Saudi Arabia, Turkey, and Egypt, in its diplomatic initiatives. Thus, the success of Pakistan’s mediation can be attributed not only to its diplomatic efforts but also to a unique combination of strategic, economic, and geopolitical factors that positioned it as the most effective mediator within this particular configuration of the conflict. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

Co-authored with Roksana Izzatova, UWED undergraduate and intern at IAIS The parliamentary elections held in Hungary on April 12 of the current year constitute an event whose significance is determined not so much by the country’s weight in the European economy, which accounts for approximately 1.1% of EU GDP and around 2% of the bloc’s population, as by the systemic role that Hungary has acquired in European politics over the sixteen years of V. Orbán’s rule. According to data following the count of approximately 99% of ballots, the opposition party “Tisza” led by P. Magyar is set to obtain a constitutional majority of 138 seats out of 199 in parliament, while V. Orbán’s “Fidesz” secures only 55 seats. High voter mobilisation and a record turnout of 79.5% proved to be among the key factors behind such a decisive result. I. Factors behind V. Orbán’s defeat and the transformation of the previous model. The electoral outcome is conditioned by a combination of internal and external factors that collectively undermined the stability of Viktor Orbán’s political system. First, anti-corruption mobilisation played a decisive role. According to independent researchers, over the years of Fidesz rule approximately €28 billion was diverted from the economy in favour of structures affiliated with the authorities. As a consequence, corruption came to be perceived as systemic and brazen, which eroded trust even among the traditional Fidesz electorate. Péter Magyar successfully capitalised on this demand politically, placing the fight against corruption at the centre of his campaign. Second, economic discontent constituted an important factor. Economic stagnation, rising prices accompanied by low wages, and the deteriorating state of healthcare and education intensified critical sentiments. This enabled the opposition to shift the campaign’s focus away from ideological issues towards everyday socioeconomic concerns. Third, the consolidation of the opposition and the specific character of the electoral system played a significant role. Unlike previous elections, opposition forces rallied around the Tisza party, making it possible to exploit a system previously adapted to the dominance of Fidesz. Fourth, the external political context and the “Trump effect” proved to be an important factor. Support from D. Trump and J. D. Vance, rather than strengthening Orbán’s position, turned out to be insufficiently effective. Against the backdrop of growing anti-American sentiment in Europe and tensions linked to US foreign policy, this association reduced the attractiveness of Fidesz for part of the electorate. Consequently, the transatlantic alignment of right-wing forces became a factor of electoral risk rather than an advantage. Fifth, a considerable role was played by the shift in perceptions of V. Orbán’s foreign policy orientation. His alignment with Russia, the blocking of EU decisions, and the critical rhetoric towards Ukraine came to be viewed as a factor of Hungary’s international isolation rather than as the defence of sovereignty. Sixth, sociodemographic changes, in particular the increased political activity of young people, were of significant importance. Up to two-thirds of voters under the age of 30 opposed V. Orbán, and the mass mobilisation of the urban electorate became one of the key factors in the opposition’s victory. II. Prospects for the Transformation of Hungary’s Political Course. At his first major press conference following the election victory, P. Magyar outlined the following priorities: The foremost priority is the earliest possible restoration of Hungary’s access to European Union funds, given that the European Commission has suspended the disbursement of €17 billion out of the €27 billion allocated to Hungary and has refused to approve Budapest’s plan for a €150 billion credit instrument intended to stimulate defence production in the bloc’s member states. To that end, he presented a four-component plan encompassing anti-corruption measures, accession to the European Public Prosecutor’s Office, the restoration of the independence of the judiciary and investigative institutions, the guarantee of press freedom, as well as the depoliticisation of universities and the protection of academic freedom. The second major direction identified by P. Magyar is consideration of Hungary’s accession to the eurozone. He linked this issue to the objective of macroeconomic stabilisation, while emphasising that a final decision should be made following an assessment of the budgetary position and consultations with economic stakeholders. With regard to Ukraine, he made clear that Budapest would seek to normalise bilateral relations and expressed readiness for political dialogue with Kyiv. He simultaneously emphasised that Ukraine should not be compelled to accept peace on the basis of territorial concessions, while also declaring his opposition to Ukraine’s accelerated accession to the EU in the foreseeable future. Magyar also stated that he supports Hungary’s withdrawal from the EU’s €90 billion credit package programme for Ukraine, citing Hungary’s poor budgetary position. Despite more critical rhetoric directed at Moscow, the prime minister-elect made clear that in energy policy Hungary would proceed primarily from economic expediency. He declared his intention to continue purchasing Russian energy resources if they remain the most cost-effective option, indicating the preservation of elements of pragmatic continuity even as the overall foreign policy tone undergoes a general change. On the migration issue, P. Magyar effectively confirmed the course of strict border control. He came out against the EU Migration Pact, announced his intention to maintain the border fence on the southern frontier, and made clear that the new government does not intend to accept intra-EU mechanisms for the distribution of irregular migrants. It was also underscored that Hungary must resolve the matter of daily fines amounting to €1 million, which it faces for non-compliance with a previous ruling of the European Court of Justice concerning the treatment of migrants. At the same time, Hungary’s policy within the OTS will in all likelihood maintain institutional continuity, yet acquire a more pragmatic and depoliticised character. Budapest is unlikely to withdraw from the organisation, given Hungary’s status as an observer state, the presence of an OTS representation in Budapest, and the already well-established network of economic, educational, and politico-diplomatic contacts. The new course will be built not on exploiting the Turkic vector as a symbol of foreign policy alternative to Brussels, but on its functionalisation as a channel for transport, investment, energy, and educational cooperation. In this sense, Hungary under P. Magyar may retain the role of a European partner within the OTS, albeit in a less ideologised and more coherent form aligned with the general European line. Thus, Hungary is transitioning from the model of “confrontational sovereignism” to a model of limited pro-European pragmatism. In domestic policy, the key task will be the reform of Fidesz’s institutional legacy. Over the years of V. Orbán’s rule, entrenched mechanisms of control were established ranging from constitutional norms to a network of loyal actors in the economy and the media. Even with a constitutional majority, the new authorities will encounter institutional resistance. Nevertheless, reforms of the judicial system and the restoration of the rule of law, the depoliticisation of the media and the curtailment of oligarchic structures’ influence, anti-corruption reforms, and a revision of the public procurement system are all to be expected. III. European and International Implications. These elections may be assessed as an indicator of the resilience of the nationalist wave in Central Europe. The change of power in Budapest will inevitably prompt a recalibration of political calculations for a broad range of actors. The results of the elections in Hungary carry consequences that extend far beyond the national level. First, they signify a weakening of the right-wing populist bloc in Europe. V. Orbán was a key figure for Eurosceptic and nationalist forces, including parties in France, Germany, and Italy. His departure from power reduces their institutional influence and reshapes the configuration of transnational networks of right-wing movements. Second, the elections reflect a crisis of the transatlantic right-wing alliance. Support for V. Orbán from the Trump Administration and American conservatives not only failed to assist him but actually became a risk factor. This may have implications for the United States as well, where Democrats are already interpreting the election results as a potential signal for domestic politics. Third, of significance is the redistribution of power within the EU. The opposition’s victory strengthens the position of the European Commission and reduces the influence of states inclined to block decisions. This may accelerate decision-making on Ukraine, sanctions policy, and questions of the rule of law. Fourth, the consequences for Russia are of a dual nature. On the one hand, Moscow loses one of its partners within the EU; on the other, the pragmatic course of P. Magyar and the persisting energy interdependence mean that Russia will retain channels of influence, albeit in a more limited form. IV. Implications for Central Asia and Uzbekistan. For Central Asia, the maintenance of a stable liberal-pro-European orientation within the EU would be of generally positive significance. Above all, this creates a more reliable foundation for the long-term access of Central Asian states to grant resources, concessional financing, technical assistance, and blended finance instruments, and increases the likelihood that already announced initiatives will not be impeded by political disputes within the EU. In practical terms, this yields several advantages for the region. First, more consistent progress on infrastructure and logistics projects becomes more probable, above all along the Trans-Caspian Transport Corridor, which the EU regards as a strategically important direction for diversifying routes and supply chains. Second, the basis for financing projects in the areas of water management, climate resilience, and energy modernisation is strengthened: the EIB has already announced its intention to provide €365 million, which is expected to mobilise up to €1 billion in investments in sustainable transport, water management, and climate resilience in Kyrgyzstan, Tajikistan, and Uzbekistan. Third, European support in the field of human capital is preserved and expanded through the DARÍA and Erasmus+ programmes, which is of particular importance for workforce training, university mobility, and the adaptation of the regional economy to new technological requirements. Collectively, this strengthens the international agency of Central Asia: the region gains the opportunity to engage with Brussels not as a collection of disparate states, but as a more disciplined and resource-endowed centre of power with a long-term interest in the region. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

The accelerating campaign for the US Congressional elections this November highlights deepening partisan polarization and a profound structural realignment of the American political system. Formally, the Republican Party retains control over both houses of Congress and the executive branch, but its political capabilities are increasingly constrained by internal divisions, growing public dissatisfaction with the administration's foreign policy course, and mounting socio-economic pressure. At the same time, the Democratic Party, despite its own internal heterogeneity, is gaining an opportunity to consolidate on an anti-Trump platform and use the White House's managerial missteps as a factor for electoral mobilization. A distinct feature of the current period is that the struggle is unfolding simultaneously on several levels. The first level is the interparty confrontation between Republicans and Democrats for control of the House of Representatives and the Senate. The second level is the intraparty struggle among the Republicans themselves—between the pro-Trump MAGA wing, centrists, and traditional conservatives. The third level is the internal redistribution of roles within the Democratic Party among the traditional party establishment, moderates, and left-leaning progressive groups. Collectively, this makes the Congressional elections not merely a contest of party machines, but an arena for a broader conflict over the future configuration of American power. The Republican Party. A key feature of the modern Republican camp remains its high dependence on the figure of Donald Trump. In its current form, MAGA is not a classic ideological platform of American conservatism, but a personalized political structure in which the central source of legitimacy is Trump himself, his rhetoric, his behavioral style, and his ability to sustain the mobilization of the most active segment of the party's electorate. This provides Republicans with short-term mobilization energy, but simultaneously weakens the institutional resilience of the party itself, as intraparty loyalty is increasingly built not around a stable platform, but around political devotion to the leader. Against this backdrop, three distinct lines are becoming increasingly apparent within the Republican Party. The first is the core pro-Trump faction, ready to support any agenda changes as long as they come from Donald Trump. The second consists of more establishment conservatives and party pragmatists, for whom the electoral popularity of candidates, control over Congress, and the governability of institutions remain the priorities. The third is the provisional post-Trump wing, which has not yet taken organizational shape but is already tied to the question of who will inherit the Republican base once Donald Trump's political cycle concludes. It is precisely at the intersection of these vectors that the main intraparty struggle is unfolding. An additional factor driving growing intraparty tension is the Iranian campaign, which has exacerbated the contradiction between foreign policy hawks and electoral pragmatists within the administration and the party. A segment of the Republican establishment operates on the premise that betting on military escalation demonstrates resolve and bolsters the image of a strong government. Another segment, conversely, associates the war with rising domestic costs, deteriorating public sentiment, and the risk of defeat in the Congressional elections. In this context, even the cautious distancing of certain figures—such as Vice President J.D. Vance and Secretary of State Marco Rubio—from the Iranian policy line should be viewed not as an isolated incident, but as a symptom of a deepening divergence between ideological mobilization and electoral calculation. A serious indicator of this problem has been the personnel turbulence within the executive branch. The resignation of Secretary of Homeland Security Kristi Noem demonstrated that even the most sensitive and traditionally advantageous areas for Republicans—primarily immigration policy and homeland security—are ceasing to function automatically as a resource for consolidation. On the contrary, amidst scandals, managerial failures, and public conflict, they are beginning to be associated with the instability of the administration itself. This is particularly sensitive for the election campaign, as the immigration issue remains a core element of Republican identity. Another factor of intraparty tension has been tariff policy. Within the MAGA sphere, protectionism remains a crucial element of economic nationalism and a symbol of the struggle to restore the US industrial base. However, the Supreme Court ruling striking down the tariffs imposed by Donald Trump, along with plaintiffs' demands for the refund of substantial sums associated with their application, demonstrate that Trump's trade policy is no longer perceived exclusively as a political asset. The gap between the mobilization benefits of tough tariff rhetoric and its actual administrative, legal, and economic consequences is becoming increasingly apparent. As a result, the divergence between proponents of ideological loyalty to the protectionist course and the interests of more pragmatic business groups is widening within the Republican Party. The Democratic Party. Unlike the Republicans, the crisis facing the Democrats is not personalist but coalitional in nature. The Democratic Party comprises the party establishment, moderate centrists, left-wing progressives, and a radical wing that opposes corporations and military conflicts. Under normal circumstances, such fragmentation would create significant difficulties in formulating a unified strategy. However, at present, the shared rejection of Donald Trump pushes internal disputes to the background and unites the party into a broad coalition. The political logic of the Democrats is built around several interconnected vectors. First, the defense of institutions and portraying Donald Trump as a figure accelerating the erosion of traditional mechanisms of American democracy. Second, the effort to link the White House's foreign policy course with domestic socio-economic consequences, primarily the rising cost of living. Third, the use of anti-war and anti-crisis rhetoric to mobilize both moderate and progressive voters. As a result, Democrats are gaining the opportunity to unite various party segments around a common thesis: the current administration is increasing external risks without offering society either a sustainable strategy or domestic economic compensation. Despite this, internal differences within the Democratic Party have not disappeared. The party center and traditional establishment tend to emphasize restoring predictable governance, defending the rule of law, and institutional containment of the administration. The left wing seeks to use the situation to expand the social agenda, criticize the militarization of foreign policy, and exert pressure on corporate-financial groups. Nevertheless, in the short term, these differences serve to broaden the electoral reach rather than disorganize the party. Moderates and progressives appeal to different voter segments, but in the current cycle, they operate within a shared anti-Trump framework. The Iranian Crisis as a Factor in Political Polarization. The key external factor accelerating domestic political confrontation has been the war with Iran. Unlike the traditional "rally 'round the flag" logic, the military campaign has not led to an increase in support for the administration. In the early weeks of the conflict, support for military action remained consistently low or fluctuated at a level that failed to form a stable public majority. In most polls, approval for the military campaign stood in the range of about 40%, while the share of those opposed was significantly higher. Furthermore, the most stable characteristic of public opinion has been not merely lukewarm support, but extremely high partisan polarization regarding the conflict. Among Republicans, support for the strike on Iran remained high, whereas nearly unanimous opposition prevailed among Democrats. Independent voters also leaned more frequently toward a critical or cautious stance. This indicates that the conflict did not become an issue of national security capable of temporarily suspending partisan divisions. On the contrary, the war entered American politics from the outset as a polarizing factor, amplifying the already existing fault lines between and within the parties. A significant factor has been the problem of strategic communication: the administration failed to foster a clear public understanding of the campaign's ultimate goals. In an environment of informational uncertainty, voters are inclined to rely not on a rational assessment of the policy course, but on their baseline level of trust in the president. As a result, military actions are perceived by a substantial portion of the electorate not as a consolidating factor, but as a risky maneuver that deepens the internal divide. The Energy Shock and its Electoral Consequences. The most palpable channel through which the external crisis has transformed into a domestic political problem is the rise in fuel prices. The energy shock in the US has taken on not only a macroeconomic but also a direct electoral dimension. The rising cost of gasoline and diesel rapidly affected traditionally Democratic and Republican states alike, as well as swing states. Crucially, the impact hit not only coastal regions sensitive to foreign supplies, but also those states upon which the outcome of the battle for Congress heavily depends. Foreign policy escalation has morphed into a matter of everyday well-being in the minds of citizens. For a significant portion of the electorate, the conflict with Iran ceased to be a question of geopolitics, having transformed into a catalyst for inflation and reduced purchasing power. This poses a critical challenge for Donald Trump's administration, whose political capital is rooted in the promise of economic stability. The contradiction between the foreign policy course and domestic economic priorities threatens the cohesion of the Republican electoral base. As a consequence, Congress is becoming an arena not only for competition between the two parties but also for a more complex conflict between different models of US political development. For Republicans, the struggle is simultaneously about maintaining their majority and determining whether the party will remain an instrument of personal mobilization around Donald Trump or begin to return to a more institutional model. For Democrats, the task lies not only in securing mandates but also in utilizing the electoral cycle as a mechanism for institutional containment of the White House. Of particular significance is the fact that interparty conflict is increasingly intertwining with intraparty struggles. Any administration decision regarding Iran, tariffs, immigration, or personnel matters immediately impacts not only relations between Republicans and Democrats but also the balance of power within the parties themselves. This is exactly what makes the current cycle qualitatively different. It is unfolding not as a battle between two relatively cohesive political blocs, but as a multiple overlay of external conflict, intraparty fragmentation, institutional overload, and public distrust. Thus, the 2026 US Congressional election campaign reflects not merely another phase of electoral competition, but a broader crisis within the American political system. At the interparty level, it takes the form of a clash between the Republican model of personalized mobilization and the Democratic coalition of institutional containment. At the intraparty level, the conflict among the pro-Trump core, the center, and potential successors of the post-Trump era is intensifying within the Republican ranks, while Democrats are temporarily smoothing over their own contradictions through shared anti-Trump consolidation. The Iranian crisis, rising fuel prices, the administration's personnel instability, disputes over tariff policy, and the upcoming renewal of Congress heighten the sense of managerial overload within the American system. Under these conditions, the battle for the House of Representatives and the Senate becomes a struggle not only over the distribution of mandates but also over which model of political governance will dominate the US in the coming years. This is precisely why the 2026 elections should be viewed as a crucial milestone in the transformation of American politics. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.

The report “Employment and Social Trends 2026” prepared by the Department of Macroeconomic Policy and Jobs of the ILO Research Department reveals an interesting phenomenon about how the labor market changes in a stable economic situation. At first glance, the global economic system appears to be functioning with remarkable stability. Looking ahead to 2026, the global unemployment rate is projected to remain at a historically low 4.9%. In the traditional lexicon of twentieth-century economics, this would be hailed as a triumph. However, this “resilience” is a mathematical mask—a mirage that obscures a deepening crisis of job quality and social equity. While the headline figures suggest stability, the ground reality for billions is defined by “decent work deficits”. We are currently operating in a climate of “high uncertainty”, where economic and trade policy volatility has effectively frozen the progress of the last two decades. The resilience we see is not the resilience of flourishing markets, but a stagnant equilibrium where the momentum for better working conditions has ground to a halt. For half a century, the social contract of the developed world was anchored in a single, unwavering promise: an advanced education is your shield against economic obsolescence. Generative Artificial Intelligence (AI) has not just dented this shield; it is arguably melting it down. We are witnessing a startling paradox where workers with advanced education in high-income countries face higher automation risks than their less-educated peers. This is particularly acute for the 15-24 age demographic. Young graduates, who traditionally used “entry-level” roles as a springboard into high-skilled careers, now find those very roles being automated. This is more than a labor market shift; it is the death of the traditional meritocratic contract. In high-income economies, the specific occupational structures—built on information processing and cognitive routine—are precisely the territories AI is now colonizing. The “educational shield” has become a target. The most harrowing evidence of our stalled progress is found in the depths of working poverty. Globally, 284 million workers still live on less than US$3 a day. The “crawling pace” of progress here is staggering: while extreme working poverty declined by 15 percentage points in the decade prior to 2015, that progress has plummeted to a mere 3.1 percentage point decline over the last ten years. Even more disturbing is the geographical divergence of this suffering. While the global aggregate suggests slow improvement, the share of extreme working poor in low-income countries actually rose by 0.8 percentage points between 2015 and 2025. This data shatters the illusion that growth at the top eventually secures dignity at the bottom. “Relying on economic growth alone is insufficient to deliver meaningful progress in decent work.” — Gilbert F. Houngbo, ILO Director-General. The global labor market is trapped in a two-speed demographic crisis that further distorts our understanding of “resilience”. In high-income countries, the labor force is shrinking and ageing. This creates a “mirage” of stability: the 4.9% unemployment rate is maintained not by a surge in job creation, but by a structural decline in the number of available workers as the population retires. Conversely, low-income countries are home to a massive cohort of young people. This should be a “demographic dividend”—a surge of human potential to drive GDP. Instead, it is a missed opportunity. Weak productivity growth in these regions means the economy cannot absorb this talent into quality roles, leaving a generation of young workers with high expectations and no viable path to the middle class. Perhaps the greatest roadblock to global social justice is the “informality trap”, now ensnaring 2.1 billion workers—57.7% of the global workforce. These individuals exist in the economic shadows, devoid of social protection, workplace safety, or legal recourse. Worryingly, global informality is trending upward due to a “composition effect”. Global employment is currently growing fastest in Africa and Southern Asia—the very regions where informality is already the norm. As the center of gravity for the global workforce shifts toward these regions, the aggregate quality of work declines. This structural shift acts as an anchor, dragging down global standards even as individual nations attempt to modernize. Trade, once the primary ladder for developing nations, has become a source of profound volatility. Trade policy uncertainty (TPU) is now a direct tax on the worker’s wallet. ILO modelling indicates that moderate increases in TPU reduce real wages for both skilled and unskilled labor. The impact is geographically surgical: income losses reach up to 0.45% in South-Eastern Asia and 0.3% in Europe and Southern Asia. While digitally delivered services offer a rare growth spot—now reaching 14.5% of global exports—the broader ability to fix these labor market fractures is being choked by an “invisible hand”: rising sovereign debt. Global public debt is projected to surpass 100% of global GDP by 2029. The growing debt burden limits governments’ financial resources, which in turn restricts their ability to invest in education, social protection, and the "social justice" programs needed to reduce the gap in decent work. The evidence suggests that GDP growth has become an ineffective tool, unable to create a future of dignity for the majority. A “resilient” economy that permits working poverty to rise in its most vulnerable regions while high-skilled graduates face automation is not a successful economy; it is a stagnant one.True resilience requires a paradigm shift that moves beyond raw production toward the deliberate reduction of work deficits. We must move from data to action, acknowledging that if the most educated are now the most exposed, and the most resilient economies are the most stagnant, the old rules no longer apply. Are we prepared for a world where the traditional path to success has become a dead end, and the “invisible hand” of debt is the only thing left guiding our fiscal future? Consequently, Uzbekistan's policy must shift toward a strategy that combines education reform with the changing labor market, focusing on the creation of high-quality, formal, and promising jobs rather than relying solely on economic growth measures. The government must, in particular, align higher education and vocational training with prevailing trends of digitalization and automation, prioritizing the development of non-routine, analytical, and technological competencies, while simultaneously taking measures to mitigate the informal economy and expand social protection. This course of action is justified by the fact that traditional education does not guarantee employment security, that shortcomings in job quality persist despite stable macroeconomic indicators, and that without targeted intervention, Uzbekistan risks underutilizing its demographic potential and facing similar stagnation dynamics observed globally. * The Institute for Advanced International Studies (IAIS) does not take institutional positions on any issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of the IAIS.