Although the term has been around since the early 1990s, geoeconomics as a concept is only now seeming to gain traction in mainstream news coverage as geopolitical relationships are increasingly intertwined with economic strategies such as sanctions, tariffs, foreign aid, international investments, and monetary policy.
Simply put, geoeconomics is the “use of economic tools to advance geopolitical objectives.” However, there is no standard definition as such; it is understood as a foreign policy strategy in academic circles but is also said to transcend inter-governmental relations due to its focus on geographic features and physical assets.
Experts at the Lawfare Institute explain the development of this new “Geoeconomic World Order” in a multi-part blog series published last year. The second installment describes how interest in geoeconomics has grown with the competitive threat from China, particularly its Belt and Road Initiative (BRI) to build a secure trade route through its less-developed western provinces and on to Eurasian markets.
Analysts are quick to note that China isn’t alone; the United States is also a major player in the geoeconomic game. Indeed, some argue against the idea there was ever a separation of trade and security interests, or what Lawfare called the “Old International Economic World Order,” but simply that Western dominance went uncontested by Eastern powers like China and Russia until now.
Recent conflicts between Russia and Ukraine offer a microcosmic example of geoeconomics in action. During the annexation of Crimea, Russia used linguistic, ancestral, and former Soviet ties to Ukraine to drum up support and legitimize its claim to the region. The Crimean subsidiary of Ukrainian-owned Naftogaz was quickly absorbed by Russia’s state-owned Gazprom.
Sanctions from the US and the EU soon followed; meanwhile, an attempt at energy-independence from Kiev was beaten back when Gazprom essentially raised Ukraine’s bill and cut their heat off in the dead of winter.
Now, Gazprom is the major stakeholder in a new natural gas pipeline to Germany that bypasses Ukraine entirely, increasing European dependence on Russian energy and thereby giving Russia more ground and political clout in the region.
All of this while a consensus of the world’s scientists, environmental activists, and the earth itself remind us daily that continued reliance on fossil fuels will spell our ruin by 2030, if not sooner. Perhaps going forward, the discussion of geoeconomics should be expanded to include environmental policy, such as the Paris Climate Accords and the Green New Deal.