references
Ángel Pascual-Ramsay, Director of Global Risks at ESADEgeo Center for Global Economy and Geopolitics and NonResident Senior Fellow at the Brookings Institution
Álvaro Imbernón Sáinz, Researcher, Global Risks ESADEgeo Center for Global Economy and Geopolitics
of Beijing, where state capitalism, gradual political reform, supervised economic liberalization, political authoritarianism and a foreign policy based on mercantilists interests are priorities for action. Business firms may become states’ foreign policy tools. Competition may suffer, as companies working to achieve the interests of their states (diplomatic ambitions, energy supply, local job creation, infrastructure development, positioning on key routes and nodes, etc.) will be endowed with greater economic and political power and enjoy an unfair competitive advantage in international markets and will be able to take greater risks. In this context State-Owned Enterprises and Sovereign Wealth Funds are gradually becoming more relevant actors at the international stage. This phenomenon is driven by Asian-Pacific States and commodity exporting economies but recently its influence is also seen in the US and the EU. Economics, in sum, is the new geopolitical tool. In the coming years this trend will be reinforced by an international environment characterized by uncertainty, the crisis of the current global governance model and a process of European integration seriously questioned.
sanctions, strategic use of energy supply, attacks in cyberspace, the creation of alternative international institutions or the reinforce of the Eurasian Economic Union. The Western response to the Kremlin’s challenge of the annexation of Crimea and its support for separatists in the Donbass has been lukewarm. Neither the US nor the EU are willing to use military force to
Economics is the new geopolitical tool. In the coming years this trend will be reinforced by an international environment characterized by uncertainty
defend Ukraine’s territorial integrity. However, they have been able to concoct a strong impact through economic sanctions. So far the sanctions have been limited to visa bans, asset freezes, exports and financing curbs, money laundering enforcement and economic restrictions to a limited number of individuals, companies and banks. This includes limiting access to vital services to the Russian energy industry. Undoubtedly the most relevant possible escalation of the severity of the sanctions would be the debated disconnection of Russian banks’ access to SWIFT, which would greatly hinder any economic relationship between Russia and the West. The effect of sanctions, combined with falling commodity prices and a depreciated ruble, has caused a severe economic recession in Russia. However, sanctions have not thus far succeeded in changing the KremESADE ALUMNI
political modus operandi in which the actors seek to maximize the interests of the State using economic tools as well as political ones. The ability of governments to project power increasingly rely more on a geo-economic component than on the traditional predominance of military power.
The conflict in Eastern Ukraine
A first example of this can be seen in the most important geopolitical crisis currently affecting Europe: the conflict in Eastern Ukraine. Rather than a directly military confrontation or even a proxy war, what we are witnessing is a confrontation through economic and financial
The intervention of the State
For this reason, the intervention of the State in the economy can be expected to continue expanding in many emerging economies, in the wake of the so-called consensus