Foundations

• The Atlantic Council released the 2026 Freedom and Prosperity Indexes, revealing a sharp decline in global adherence to the rule of law since 2020. • The report analyzes thirty years of data across 171 countries to illustrate the critical link between legal foundations and economic success. • This trend is significant because the erosion of legal frameworks stalls economic reforms and weakens democratic institutions, preventing millions from achieving prosperity.

• The Opinions Editor argues that while immediate economic troubles have eased, the structural foundations necessary for sustainable, long-term growth remain absent. • Key sectors are struggling: high-skilled IT services are under pressure, manufacturing is failing to gain traction, and the financial sector is not creating enough low-to-medium skilled roles. • Job growth is currently concentrated in low-end services, exemplified by Zepto, which saw its delivery rider workforce surge from 49,278 in 2024 to 2.21 lakh in 2026.

• The European Commission has proposed the Cloud and AI Development Act (CADA) to establish a structured sovereignty framework for cloud and AI infrastructure. • The act introduces a four-tier classification system, ranging from Level 1 (self-assessment and cybersecurity) to Level 4 (full EU ownership, EU-cleared personnel, and strict data localization). • This initiative matters as it seeks to reduce reliance on non-EU providers by ensuring critical AI inference data remains within the union and is subject to national audits.