John Wallace Blog Post 3

 John Wallace 

Blog Post 3 


For centuries, war was waged through force of arms. But now, we are seeing the dawn of full-scale financial warfare. A tactic that allows stronger nations to expand their influence and power without spilling blood. This also allows for a wider diffusion of power with developing countries, while they may lack financial resources, many developing countries have vast untapped energy reserves that can be exploited with the proper investment. However, large-scale financial warfare is a tactic commonly reserved for large powers as a way to temper each other’s power or to exercise control over smaller nations. Both these methods will be covered in-depth in this blog post. 

Large-scale financial warfare has faced a large number of setbacks in recent decades. With many examples of financial warfare such as sanctions being unable to accomplish change or discourage war. This is largely due to these countries being less connected to the global economy, such as Iran or North Korea. Now, however, the outbreak of war between Russia and Ukraine has allowed financial warfare to reach a new meaning. What used to be simple financial sanctions has turned into something else entirely with asset seizures, full bans of Russian goods, and the full cessation of company services in Russia. Russia’s globalized economy has made it particularly vulnerable to economic warfare, yet it remains to be seen what effects this warfare will have on the wider economic world. 

On the other hand, economic warfare can also be used to achieve control over other nations. This cannot be further personified than China’s belt and road initiative. This initiative is part of a larger goal to sideline dependence on Western markets, while also allowing China to establish control over neighboring countries. Currently, China uses large infrastructure projects to trap countries with debt. “According to a study by the International Monetary Fund (IMF), from 2013 to 2016, China’s contribution to the public debt of heavily indebted poor countries nearly doubled from 6.2 percent to 11.6 percent.” (Friedlander). One notable example of the so-called ‘Chinese debt-trap diplomacy’ is Sri Lanka, a nation that was forced to lease the strategic southern port of Hanbantota for 99 years after infrastructure loans turned out to be unsustainable. With this port, China is able to extend its reach into the Indian ocean combined with similar ports in Bangladesh and Pakistan.  

Ironically, this policy of port leasing and economic warfare is no new concept to China. For centuries, China was forced to lease many of its ports to European colonialist powers. This tactic was also used by colonial powers to maintain influence in their former colonies, culminating in the term “neo-colonialism”. A term that showcased how many European powers preyed on the developing economies of their former colonies with predatory debt schemes, allowing their military to achieve a foothold in many strategic ports around the world.  

Economic warfare is not a new concept, yet in recent decades, it has taken precedence over force of arms as the main form of warfare. Now, the oil of war is churned by cold hard cash. Rather than the blood of innocent men and women.

Comments

  1. John WallaceMarch 24, 2022 at 1:29 PM

    https://foreignpolicy.com/2019/04/25/chinas-debt-diplomacy/

    ReplyDelete
  2. Brooke WallaceMarch 30, 2022 at 12:29 PM

    John,
    You definitely make a valid argument that economic warfare has taken precedence over the force of arms (as seen with Russia and Putin showing no regard/remorse for his own people dying in his hands). This post is very well-written, and I like that you pointed out that this is no new concept for China and other power-hungry European countries in the past who would prey on developing countries. Your writing has some overlap with my own blog post on currency manipulation in the 21st century: China and the US are locked in a bitter trade dispute with the possibility of a major currency war looming over our heads. This further proves your point that we have gotten so caught up with money/how we can hurt other countries economically, so much so that a full-scale trade war could result. The Russian people, on the other hand, have gotten so caught up with their advancements in warfare/technology that they will hang this over our heads as we impose higher economic sanctions. These surplus countries (China, and Russia etc.) use their influence to gain control over other nations (typically developing countries as you have mentioned). While economic sanctions/punishment are nothing new, Globalization plays a huge role in the switch from war from force of arms to economic warfare. That being said, do you think that given the trend we are seeing with economic warfare, does globalization cause war (in today's world)? Do you think that globalization is good or bad for our economy?

    ReplyDelete
    Replies
    1. John WallaceMarch 30, 2022 at 2:34 PM

      I don't believe globalization directly causes war, yet it does encourage economic warfare on a larger scale. Which is largely preferable to full scale bloody conflict. For the economy on the other hand, globalization largely helps the economy with faster growth. However, dependence on other nations' economies makes one's own country more susceptible to economic crashes and instability. So it's more of a question of Efficiency versus Stability.

      Delete

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