references
International network
KNOWLEDGE
TO A NEW REGIONAL ORDER
1 In the long run, the new
salience of geo-economics could nudge the international order towards a regional rather than multilateral setting in which a firm’s home country is increasingly important.
2 This would particularly affect
European companies whose domestic markets are stagnant and have a greater need to expand abroad.
3 Access to foreign strategic
lin’s policy of destabilizing Eastern Ukraine, nor will it lead it to hand back Crimea. In fact Putin’s popularity has been on the rise. The winners of this contest are some ‘swing States’ or third parties such as China and Turkey, which enhance their attractiveness as Russia’s partners and can negotiate access to its markets and energy supplies under very favourable circumstances. The losers are, undoubtedly, global economic governance, the unity of action of the EU and free trade.
ment has promised to stop all privatizations in place except that of the Piraeus port, already partially operated by the Chinese company COSCO. Precisely this port is the endpoint of the sea route of the New Silk Road, a priority project for Beijing’s foreign policy. This would reinforce the Chinese strategy of taking over strategic enterprises in Europe.
Middle East
The crisis in Ukraine is not the only recent geopolitical phenomenon with significant economic consequences. The sharp drop in oil prices has had many causes, but Saudi Arabia’s decision not to intervene to prevent the price decline is said by informed commentators to have a geopolitical logic behind, namely the weakening of its nemesis in the region, Iran. The most hydrocarbonexports dependent countries such as Iran, Algeria, Ecuador, Iraq, Libya, Nigeria, Russia and Venezuela need prices above $100 per barrel to level their state budgets. This weakness substantially affects their foreign policies, which could change the geopolitical balance in the Middle East, the former Soviet Union space and the Caribbean. Furthermore, although the main beneficiaries of lower commodities prices are the EU and China, in the longer term this price decline could reinforce a more fragmented geo-economic environment for business. A sample of this fragmentation of global economic governance is the increasing irrelevance of the WTO and the Bretton Woods institutions while new institutions arise, such as the New Development Bank (BRICS), the Asian Infrastructure Investment Bank, the Eurasian Development Bank, the Silk Road Development Area or the Free Trade Area of Asia Pacific.
markets such as energy, commodities, finance, telecommunications, technology or defense would be increasingly complex in this scenario.
4 Companies would be more
There is also concern that some of the European countries most affected by the economic crisis will get closer to Russia and China
Greece
The confrontation with Moscow has divided the EU between supporters of further sanctions, led by the UK, Sweden, Poland, Romania and the Baltic states, and more conciliatory member states, which include Hungary, Cyprus, Czech Republic and, to a lesser extent, economies with important interests in Russia such as Austria, France and Italy. There is also concern that some of the European countries most affected by the economic crisis will get closer to Russia and China, whose investments may be linked to national interests. The victory of SYRIZA in Greece has raised alarms about the possibility that the new government led by Alexis Tsipras could block new EU sanctions against Russia. Alexis Tsipras’s choice of receiving the ambassadors of Russia and China a few hours after being elected worried some of its European partners. The new Greek govern-
constrained by the ability of ‘their’ governments to defend them in case of conflict.
5 Business corporations must
therefore learn to understand the strategic priorities of their export market’s governments, in order to operate smartly with them.
6 Furthermore, they must devote