Obligations Beyond Borders? Linking Monetary Tightening in the US to Gendered Debt Crisis in Pakistan Through Extraterritorial Obligations

This exploration illustrates how US-led international monetary tightening exerted extraterritorial effects in Pakistan and exacerbated an ongoing gendered debt crisis. The viability of extraterritorial obligations (ETOs), as grounded in binding international treaties, to address the cross-border spillovers of international monetary tightening is analytically explored. Pakistan’s sovereign debt distress and the channels through which fiscal austerity and domestic monetary tightening reinforce gender inequality through reduced access to public services and goods, income and employment loss, adverse health impacts, and increases in poverty are examined. Subsequently, international monetary tightening beginning in 2022 and its multiple spillovers on the macro policy level, including exchange rate depreciation, higher import costs and external debt payments, are illuminated. Incorporating feminist economics literature on gender and monetary policy, the macro effects are gendered and take place through systemic channels. In response, the viability of ETOs to address the gendered inequalities deepened by international monetary tightening is explored.HIGHLIGHTSUS monetary policy exacerbates gendered debt crises in Pakistan and other countries.The US Federal Reserve acts without accountability, impacting global economies.Spillover effects include income loss, increased care work, and adverse health impacts on women.Lack of accountability in global economic governance undermines gender equality.Strengthening extraterritorial obligations (ETOs) could hold the US accountable for these issues.