The Global South is grappling with a deepening public debt crisis that threatens sustainable development and global economic stability. Between 2010 and 2024, public debt in the global south surged from USD 8.6 trillion to USD 32.2 trillion, growing nearly fourfold and outpacing GDP growth, which increased only 1.8 times. As a result, the public debt-to-GDP ratio doubled to 76.2 percent, driven by high borrowing costs, sluggish economic performance, and external shocks such as the COVID-19 pandemic.

Abstract: The renewed prominence of industrial policy in the context of digital transformation, climate transition, and rising geoeconomic competition has revived debates on the role of state intervention within multilateral trade rules. The paper analyses recent WTO reform proposals, particularly those related to subsidy rules under the Agreement on Subsidies and Countervailing Measures (ASCM), several of which have been promoted by advanced economies including the United States and the European Union.

Industrial policy has evolved from being viewed as market-distorting intervention to re-emerging as a central instrument of economic strategy. Major economies are actively deploying subsidies, local content requirements, supply-chain controls, and state-backed financing to secure strategic sectors ranging from semiconductors to clean energy. At the same time, discussions on reforming the World Trade Organization (WTO) are intensifying.