Economics in the New Age of National Security
The growing geopolitical and economic split between the United States and China should prompt a paradigm shift in economic thinking. In particular, economists will need to reconsider their approach to topics such as comparative advantage, market integration, and how to promote convergence.
ABIDJAN – The global economy has entered a new age of national security. The COVID-19 pandemic highlighted the vulnerability caused by overreliance on global supply chains and the failure of coordination in tackling global health risks. But what has really ushered in this new era is Russia’s unprovoked invasion of Ukraine and sabotage of the global economy.
Beyond its human and economic toll, the war in Ukraine has sharply increased the divisions between the Western and Eastern geopolitical blocs centered around the United States and China, respectively. Russia has weaponized its energy and food exports to divide Europeans and has sought to stoke anti-Western sentiment in developing countries. China has sided with Russia and affirmed its support for the Kremlin’s security concerns. Tensions over Taiwan, a leading global semiconductor manufacturer, are another major flash point in US-China relations.
These developments should be seen as aftershocks of the world economy’s increasing polarization, underpinned by the asymmetry of the two superpowers’ political systems. It is no coincidence that several frozen conflicts have recently become active, and that many medium-size and regional powers are behaving more assertively.