Executive Summary
The rise of great power competition is transforming international economic law and financial governance. As states increasingly use economic tools for geopolitical goals—a practice known as geoeconomics—they weaponize financial infrastructure, restrict capital flows, and redirect funds away from adversaries. This trend strains the foundational norms of the international financial regime, such as multilateralism and expert-led regulation, threatening global financial stability and undermining international cooperation.
Why It Matters
This document is crucial for defense and geopolitical analysts as it details how geopolitical competition weaponizes international finance, impacting global stability and economic cooperation. It highlights the strategic implications of financial fragmentation and the use of economic tools for geopolitical objectives.
Key Takeaways
- Geopolitical competition is weaponizing international financial infrastructure, leading to security-based restrictions on capital flows.
- The trend threatens to undermine global financial stability and cooperation on common policy concerns.
- States are reorienting financial flows towards allies and strategic industries, challenging established international financial governance norms.
Strategic Relevance
The article outlines how international finance is becoming a critical battleground for geopolitical competition, with states using financial tools to advance strategic objectives. This shift impacts global economic stability, alliance structures, and the effectiveness of traditional international financial governance, necessitating a re-evaluation of economic statecraft.