Two visions of an unsettled world
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There has been much discussion in Pakistan about the government’s avowed policy shift from geopolitics to geoeconomics. This has yet to be elaborated beyond the pronouncement that it means placing Pakistan’s economy at the center of its foreign policy priorities. This would be a welcome change but a strategy has to be grounded in reality. In any case it has yet to be explained how this shift will take place in the face of strong headwinds from geopolitical storms that continue to rage in Pakistan’s neighborhood and preoccupy the country’s policy makers.
Meanwhile the global debate continues about the relationship between geoeconomics and geopolitics. There is already a rich body of literature that examines different aspects of this. Another book that offers useful insights is ‘Strange New World’ by two Europeans, Pascal Lamy and Nicole Gnessoto. The book’s English translation was published last year even though it was written a couple of years back. It is among the more incisive works on the subject that seeks to deconstruct a world in profound flux and transformation that presents both challenges and opportunities. While the authors are concerned with Europe’s role in the international system their most perceptive observations are about the global state of play.
Their starting point is that the world has entered an era of turmoil and uncertainty. Globalization, for decades the foundation of the international system brought a host of benefits to nations and people. But after 2001 it started giving way to what the authors call ‘unhappy globalization’, when it was seen to yield uneven benefits, widening disparities and creating prosperity for some, but hardly all. Then came the destabilising impact of the 2007 financial crisis. The book describes globalization’s present, more complicated third phase, as one where there is ‘simultaneous globalization of crises and impotence’. Rapid and multifaceted changes have pushed the world to a point where there is a pervasive sense that “governments no longer have a grip on what is occurring in the world.”
An important take away from this debate is that both geopolitical and geoeconomic strategies and instruments co-exist and are deployed by countries depending on the nature of the challenge at hand.
Maleeha Lodhi
The book presents a “dual vision” of the world, with the two authors offering contrasting perspectives. Gnessoto argues that the world continues to be dominated by geopolitics with force and passions trumping economic rationality. It is a disordered world, “multipolar, disjointed, even chaotic, without bearings or control under the fictitious aegis of an elusive international community.” For Lamy, on the other hand, the world is increasingly organized in favor of a “global economic surge” that is creating interdependence and “a solidarity that mitigates conflicts.” He describes current troubles as teething problems of a new world order.
One vision sees deep division from destabilising power dynamics while the other holds out the potential for unity from growing economic interdependence. The value of this “dual vision” approach is not so much for readers to choose which of the two better explains current reality but more importantly to understand that elements and dynamics of both scenarios co-exist and have to be considered as part of a composite picture of the world and therefore to address issues accordingly.
First, Gnessoto’s argument. He casts the present era as one of “strategic chaos” that ensues from the dominance of geopolitics and a “return of force.” For him geopolitics has reemerged as the pivot of the international system, with ‘power relationships defining regional balances’ across the world and overwhelming the cooperative and peaceful effects of globalization. He cites rising military expenditure as an important indicator of this. Lamy, in contrast, argues that economic factors will be a force for international peace and highlights geoeconomics’ “structuring and conciliatory effects” that result from economic interdependence between countries.
There are of course many areas where the authors agree. For example, in reviewing key global issues they both see energy as both a strategic issue and a vehicle for economic growth, one where geoeconomics and geopolitics are “intimately linked” according to Lamy. The most interesting part of the book is when the two authors have a dialogue about the complexities and tensions of an international system in transition and also examine whether major powers adopt geoeconomic or geopolitical strategies.
They explore the interaction or lack of it between geopolitics and geoeconomics in different nations and regions. Perceptive comments follow. China is seen as a champion of geoeconomics and as one of the most powerful drivers of economic globalization. But the authors say it will have to square the circle between economic liberalization and political freedom. Russia, says Lamy, exhibits a contradiction between geoeconomics and geopolitics and lacks the economic means for its global political ambitions. Japan exemplifies the power of economics to overcome geopolitical threats while the Middle East is described as being bereft of geoeconomics.
Interesting as this discussion is, the lesson from previous literature on the subject and from the actual practice of states is that there are certain prerequisites that enable countries to pursue geoeconomic policies in a world where geopolitics remains an overarching reality. The most fundamental is domestic economic strength. A strong economy and trading power are essential attributes for this. Other factors deemed important for geoeconomic strategies are links to markets, adequate resources, and ability to control and direct investment to compete effectively. An important take away from this debate is that both geopolitical and geoeconomic strategies and instruments co-exist and are deployed by countries depending on the nature of the challenge at hand. But as ‘Strange New World’ argues so persuasively, geopolitical factors can constrain a country’s ability to execute a geoeconomic policy.
The key for a country like Pakistan is to deal simultaneously with both the urgent and important: to navigate the geopolitical challenges that continue to dominate a volatile region while strengthening its economy and developing the capacity for a geoeconomic policy.
- Maleeha Lodhi is a former Pakistani ambassador to the US, UK & UN. Twitter @LodhiMaleeha
