‘Geopolitics and the war in Ukraine – the weaponization of economy and food’

Socires organised her first Socires Lecture on June 27th, 2022 in the House of Europe in the Hague, the Netherlands. The lecture was hosted as one of the Vijverberg Policy Dialogues. Pieter van Geel, chairman of Socires introduced the lecture. Hans Bruning, acting director of Socires, moderated the afternoon. Professor Haroon Sheikh of the Dutch Scientific Council for Government Policy (WRR) delivered the lecture followed by a dialogue with participants on "Geopolitics and the War in Ukraine: The Weaponization of the Economy and Food."

Lecture

Professor Sheikh began his lecture by explaining how the current geopolitical conflict surrounding the War in Ukraine differs from the Cold War. The Cold War took place in a bipolar world order, which was more stable in the sense that an action of one would provoke a response from the other, whereas we now live in a multipolar world order with multiple players, making the geopolitical game significantly more complex and multifaceted. Next to the United States and Russia as global superpowers, China is one of the major players that has been present in the multipolar arena for some time, with an economy that has exploded since the 1990s. The last couple of decades, China went from modesty to assertiveness, which is also reflected in their foreign policy. China's desire to accelerate progress along this continuum has increased as its relative power has grown, particularly since Xi Jinping’s accession. President Xi is the most recent leader to attempt to advance China’s long-held objectives; Xi has called for the great rejuvenation of the Chinese nation (also known as "The Chinese Dream"). China's ambitions include the Made in China 2025 technology initiative, but also the extensive and ambitious Belt and Road Initiative (also digital), as well as the Global Development Initiative (GDI) and the Global Security Initiative (GSI). In addition to National rejuvenation 2049, Xi Jinping introduced the Common Prosperity and the Three Mountains as internal policies. China is closely monitoring the West's reaction to Russia and will almost certainly try, through the aforementioned policies, to make its supply chains and sectors less reliant on the West.

After a long period of relative protectionism and isolationism, India is asserting greater dominance over the Indian Ocean region. As a pivotal central powerhouse in this region, it seeks to improve "connectivity" between Asia and Africa through an Asia-Africa Growth Corridor (economically), Project Mausam (culturally) or by means of a free and open Indo-Pacific (strategically). Regarding security dialogue structures, particularly maritime security to counter Chinese influence, there is the Quadrilateral Security Dialogue (or QUAD) between Australia, India, Japan, the US, and other States of the region – a kind of NATO but for the Indo-Pacific.

Another important international alliance, is the Eurasian Economic Union solidifying economic policies, particularly the integration of a single market; this is a way for Russia to broaden its sphere of influence in a region. As well as its pivot to the East (China). Russia is pursuing its own imperialistic dream, but also Turkey is positioning itself at the center of new regional visions of order by expanding its regional influence (Neo-Ottomomanism).

Additionally, Europe, or more precisely the EU, is rapidly emerging from a geopolitical slumber; the European Commission has proposed to strengthen the international role of the euro and to increase the resilience to extraterritorial unilateral sanctions. This is a crucial element for enhancing the strategic autonomy of the EU, as well as its strategic compass for security and defense; an ambitious plan to strengthen the EU's security and defense policy by 2030 to become a stronger and more capable player in this field. Russia may not have anticipated the EU's swift response against Russia with sanctions (from SWIFT to energy) but it may be difficult for the EU to maintain its unanimity over time.

The first new global arena of power struggle is that of innovation. Innovation is a driver of economic growth, productivity and social development. AI, blockchain, quantum computing, biotechnology and 5G/6G capabilities are at the forefront of international competition or coordination, and these technologies play a crucial geostrategic role, as evidenced by China, the US, and other countries' massive investments. And in today's world, everything relies on chips – from the electronic industry to the health sector. Taiwan Semiconductor Manufacturing Company (TSMC) is the world's largest and most valuable manufacturer of semiconductor chips, producing approximately 90% of the world's advanced chips. Furthermore, the US and China are engaged in a rivalry for semiconductor chip dominance; consequently, the US posed export restriction of the sale of semiconductors to the Chinese company Huawei, disrupting the chip supply chain. These disruptions and the Ukraine War served as a wake-up call for the EU to dismantle its reliance on technology in its supply chain and become less reliant on countries such as China for innovation. The European Commission is developing an EU Chips Act to ensure the EU's supply, security, resiliency, and technological leadership.

In regard to the cold-war analogy: that is not only a wrong comparison because there are more (and other) players this time – the game is also different, as new global arenas or battlegrounds have emerged, making this war a hybrid one.
— Professor Haroon Sheikh

The second arena is the new geography with a bigger focus on hydropolitics; various developments at sea, that we pay little attention to but are extremely important to international relations, are taking place, like gaining access to ports, digging canals, and establishing new islands. This is also evident in the Ukraine War, with the battle for the strategic port city of Odessa: it demonstrates that hydropolitical tensions between Ukraine and Russia are at the root of the escalation in violence. Other important hydropolitical regions include the Indian Ocean and the Arctic. But there is also the vertical geography, namely space wars. In terms of geopolitical security, space is increasingly becoming a conflict zone, as evidenced by the proliferation of space programs (both public and private) and the expansion of space laws. Russia's invasion of Ukraine has had an impact on space (e.g., hacking of satellites and telecommunication networks, use of satellite imagery, etc.). International collaborations are also being shaken to their core, as Russia has worked with the West on projects such as the International Space Station (ISS), the fate of which is currently unknown.

The third geopolitical arena is that of values and ideas. Each country uses its value-loaded narrative to mobilize people and ensure their support. China and Russia, for example, have established a more authoritarian regime in which hierarchy is deemed important. China is also concerned with collective well-being and Putin employs strategic conservatism and defends traditional values worldwide. This shows resistance to Western imperialism and Eurocentric ideologies. These values and ideas, for example, are rooted in anti-colonialism in many regions, such as Asia.

Fourthly, information is now the most significant geopolitical resource and has been weaponized. Dis- and misinformation, domestically and internationally, is used in many conflicts – also heavily by Russia to create its own war story by, for example, blocking social media, taking control over media, corrupting and manipulating media through deepfakes. By utilizing Teams to communicate with other world leaders, President Zylensky of Ukraine employs media in a clear and compelling manner. Ukraine seems to have constructed an effective information battlefield defense.

The fifth arena consists of standardization and regulation. Anu Bradford has written about the EU's power in this regard (dubbed as the ‘Brussels effect’). One example is the EU GDPR data protection laws, its effects extend beyond EU's borders because it is easier for companies to maintain the highest data protection standards for all their customers rather than differentiate in their services. China is also attempting to increase its influence in standardization by expanding its role in standard-setting organizations such as the UN International Telecommunication Union (ITU).

The sixth and last arena that Prof. Sheikh mentioned is that of geoeconomics or the weaponization of the economy. As mentioned previously, during the Cold War the world was not as interconnected as it is today – there was some trade and exchange of raw materials and agricultural commodities, but in essence there were two economic systems facing each other. However, in today's world, due to extensive globalization and the interconnectivity of economies, supply chains, etc., the economy – and also raw materials, energy and food – have acquired strategic value and can be used to put geopolitical pressure on a country. This geoeconomics dynamic is something that we have not witnessed in recent history. This is evident in the proposed economic sanctions against Russia, most notably the SWIFT ban, as well as in the US-China rivalry over semiconductor chips, as well as the boycotting of foreign goods.

Prof. Sheikh concluded by discussing the weaponization of food. Russia and Ukraine supply 12% of global traded calories. They supply 28% of traded wheat, 29% of barley, 15% of the maize and 75% of the sunflower oil. Russia is also a major exporter of fertilizers. For countries like Lebanon, Tunisia, Libya and Egypt, the two countries provide more than half the imported cereals. There has already been a widespread of food crises in the world, such as in Afghanistan, Somalia, Yemen, Sri Lanka, Haiti, Nigeria and the Sahel countries, which is now been exacerbated by the War in Ukraine as there are both wheat and other grain shortages as well as fertilizer shortages. The number of those facing acute food insecurity has doubled since 2019 from 135 million to 345 million which is increasing due to a perfect storm: the ‘3 C’s’, namely 1) conflict: the number of conflicts globally spiked from 2537 to 3808 from Jan to March 2022, 2) covid: low growth, fiscal deficits, weak healthcare and debt, and 3) climate: In every continent harvest are in crisis. Food crises have far-reaching consequences. Food prices rise, food exports are barred, diesel for tractors before the harvest is too expensive, and there is no fertilizer for the following harvest. Tertiary effects include an increase in hunger and poverty, which in turn will exacerbate conflict and political unrest, leading to migration and smuggling.

How do we address the geopoliticalization of connectivity? Currently, there is a perilous multipolarity devoid of balance, as well as multiple arenas of conflict and a struggle for discursive power. Prof. Sheikh began the dialogue with the participants by posing two crucial questions: "What does this mean for policy?" and "How can we increase our resilience?

Discussion

Regarding the first question, “what does this mean for policy?”, participants brought up a number of crucial points. What should be the primary objective(s) of policy? Is there a single aspect on which the Netherlands should focus on that will act as a catalyst to achieve the other goals (multiplier effect)? And how can or should we balance trade-offs such as energy vs. climate, for example? Frequently, these trade-off issues must be discussed in a broader forum, especially when they pertain cross-border issues such as climate change, as well as digitalization, innovation, and regional security. According to comments from the audience, cooperation with like-minded states is crucial via international forums such as the EU, NATO etc. There were some critical comments regarding the UN's influence and roll to mobilize action. Prof. Sheikh argued that the UN is still an important forum because it is one of the few places where (global) issues are discussed with all types of Member States – however, due to the veto power of the UN Security Council, it may not be the appropriate forum to initiate concrete actions. A participant reminded the audience that the UN has numerous bodies with various functions and mandates, particularly the UN's specialized agencies is capable of mobilizing certain action. Another participant also reminded the audience to not overlook the role of big companies.

Of course, the first question is of course closely related to the second question, namely, "how can we increase our resilience?", once more, the participants brought up crucial policy-relevant considerations that should not be overlooked. One comment emphasized the importance of garnering citizen support, particularly through party political agendas that should challenge citizens on geopolitical issues; however, how do you do this while aligning values and ideas with citizens? It is also important to listen to other people's and country’s perspectives in order to understand them, their reasoning, and possibly the thinking of certain policies being implemented. Attempting to understand others' values and ideas creates a more fertile ground for conversation, and you will notice that others, for example, have good or similar ideas on many topics, allowing for new connections to be made and shared values to be discovered. There are numerous routes that lead to the same destination. This search for connectiveness in shared values can be a critical point in increasing resiliency.

Someone in the audience also mentioned that WFP’s supply lines run from Ukraine and Russia and Ukraine which is now disrupted: how can we make food supply chains more resilient? In addition, resilience comes with a cost that necessitates important policy considerations. Prof. Sheikh responded that it would imply the “re-shoring” of products and services that have been "offshored" for decades, something that the EU is already working on in many areas in order to operate more independently (e.g. call of Von Der Leyen for a more “geopolitical Commission” and a stronger focus on strategic autonomy) or to have them run through chains with friendly nations ("friend-shoring"). This is challenging due to the fact that supply chains no longer run vertically, but rather different processes take place in various different locations and then assembled in another location. Today's world is much more intertwined across all domains and geographical regions, which is why policies must be geopolitically and geo-economically informed.

The Russian invasion of Ukraine demonstrated that policy must be geopolitically and geo-economically informed and more strategically considered, given that almost everything and everyone is intertwined these days, and taking into account all of the new playing fields with various strong players making their own tactical moves. It is critical for the Netherlands and the EU to become more resilient by decoupling what has become so intertwined as a result of globalization, particularly in the field of supply chains, by producing more themselves or through allies. However, it is always important to maintain dialogues with States that appear to be less like-minded at first glance; there can be many overlaps in terms of value and ideas that could result in common ground and conflict de-escalation, and possibly even (cautious) collaboration. Finally, participants emphasized the importance of connecting with citizens on these geopolitical issues, involving the private sector, and focusing more attention to understanding the costs and benefits of certain trade-offs. Prof. Sheikh helped us comprehend the significance of geopolitical thinking and the new world order in which we now find ourselves, but more dialogues are required, for instance regarding discussing trade-offs and making supply chains, especially food supply chains, more resilient.