Abstract
In the context of broad-based subjects like geopolitics or geoeconomics, basic human instincts and behaviors cannot be overlooked. The endeavor to unravel the complex idea of geoeconomics encounters the simple human urge of accumulating goods. Economics and politics go hand in hand, rather they provide cover to each other. The idea of geoeconomics replacing geopolitics as a new global force is easier to understand if the underlying phenomenon of power and control is weighed in. This phenomenon works in all possible ways to make its gains, through the political, economic, or forceful means. Like politics, economics too is moving globally and can be used to gain power over people and control over resources. Geoeconomics should be considered a form, or means of gaining political ends. Political economy is conducting economics through politics, and conversely economic-politics or geoeconomics means conducting politics through economics. Economics is an activity that creates movement of goods, increases productivity, and brings prosperity. When it becomes a means to gain power and control upon ‘others’, in addition to these gains, it turns into geoeconomics.
Keywords: Geoeconomics, Geopolitics, Mercantilism, Developmentalism, Modernization, Globalization
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*This paper is part of author’s upcoming study titled Geopolitics: Framework and Dynamics in a Multipolar World.
* Geopolitical Analyst, Author of the following books: Understanding Geopolitics; and Geopolitics – from the Other Side.
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Geoeconomics: The New Geopolitics
In 1990, when Edward Luttwak first talked about geoeconomics being separate from geopolitics, he was in that moment of history at the end of the Cold War and the breakdown of USSR, the bastion of communism. It seemed at that time, especially to the West, that perhaps it was the ‘end of history’[i] and that humanity had at last entered that long awaited, utopian unipolar, all-good era, where US hegemony, by its policeman-ship upon all the other nations of the world would at last rid humanity of all its evils and bring to fruition, human rights, prosperity and peace around the world.
Luttwak presumed that ‘if the players left in the field by the waning importance of military power were purely economic entities—labor-sellers, entrepreneurs, corporations—then only the logic of commerce would govern world affairs’[ii] and in place of World Politics, ‘we would simply have World Business’ – the logic of war would be played in the grammar of commerce.
But as an anti-thesis of his own utopian ideal, Luttwak admitted that ‘World Politics’ was not ready to give way to ‘World Business’, because ‘states and blocs of states still existed’ which were ‘structured to jealously delimit their own territories’ to assert ‘exclusive control’ and because of the ‘internal impulses of their own bureaucracies’ that were not ready to lose their own controls. In these circumstances, ‘impelled by the bureaucratic urges of role-preservation and role-enhancement’, they devised ‘to acquire a “geo-economic” substitute for their decaying geopolitical role’. For Luttwak, ‘the goal of mercantilism was to maximize gold stocks, whereas the goal of geo-economics could only be to provide the best possible employment to the largest proportions of the population’ – a simpleton analysis compared to what has really taken place in today’s times.
It seems that in Luttwak’s worldview, the evolving global nature of economics, led by speedy transport, the internet and developing technologies, would naturally lead to egalitarianism – as if excess wealth in terms of produce and services would be so huge that there would be no point in hoarding it away from common public use. But sadly, reality is not so altruistic, in fact, human behavior in general practice shows an opposite trait, that of locking away global wealth from the commoners, even as it increases multiplicatively.
The reason for Luttwak’s error seems to be in his attempt to interpret an element of human society with the help of the tools that humans use and the effect they have upon it, disregarding the actual human agent, its inherent driving forces, its needs, and its fulfillments. He fails to see that surplus wealth does not lead to altruism, and the possibility of war-with-other means does not suppress the urge for physical war, as it proven itself to be a need in itself. When Maslow moves the hierarchy of human needs up from the basic physiological needs to those of security concerns, followed by the needs of love, belonging, and self-esteem as secondary, while pushing the need for self-actualization and even possibly self-transcendence to the top, as something exercised only by the select few, who have all the prior privileges, Maslow does not specify that the privileged select few that reach above the preliminary needs, who find themselves in the corridors of power and surplus wealth, have generally less likely to harbor altruism and the good for humanity. Rather, it is more probable that power will urge for more power and the wealth for more wealth – and those at the lowest level of Maslow’s pyramid will be permanently kept there.
Global politics, at its core, is determined by human perception and behaviors. Although much criticized for the way it ranks human needs, Maslow’s hierarchy of needs[iii] is still a useful tool as it gives a sense of priorities. It provides at least a rough frame of reference of human priorities as a species. It tells us the that physiological and security concerns come first as they are uncompromisable, and every individual human needs to fulfill them. Meanwhile, psychological needs of love, belonging, and self-esteem come as second-tier necessities. They are definitely needed, but they can be compromised if circumstances force one to.
Self-actualization, the fulfillment of one’s full potential as a person, is only for a select few. One thinks that because self-actualization is such a luxury, it is exercised only by those in the privileged corridors of power or those with large accumulates of surplus wealth. Surely, there is a high probability that self-actualization will come with power and surplus wealth, but there is much less probability that this self-actualization will be based on altruism and the good of the larger humanity. Rather, there is more chance that power will urge for more power and wealth for more wealth, and those at the lowest level of Maslow’s pyramid will be kept there permanently.
Therefore, while dealing with broad-based subjects like geopolitics or geo-economics, we should try to keep our minds tied to the basic human instincts and behaviors that are actualizing in these fields. Perhaps this is another way of saying so much that is wrong with humanity in terms of inequalities, poverty, disease, and war ultimately has its basis in the actualization of some human will. However, it depends on how much institutionalized or politicized that ‘will’ is made to appear.
Unravelling the Complexities of Geo-Economics
So, as we endeavor to unravel the complex idea of geo-economics, in the end, we will find ourselves encountering the simple human urge to accumulate goods and will find, as the old English saying goes, ‘trade follows the flag and the flag follows the trade’, meaning that economics and politics provide cover to each other.
In analyzing geo-economics, we also need to understand that the ideological basis of our political thought is not spontaneous; rather, it is derived from past experience. As human communities have evolved with time, the circumstances of their social and material interaction have evolved, too. Scholars have tried to define and theorize how things work around them in every era. As we go back in time, we find that fewer people, fewer traders, fewer travels, and fewer states made world-systems less complex.
Entering the 20th century, with a population explosion, societies became dense, and commerce became much more diversified, making the systems of politics and economics much more complex and global in nature. World-systems analysis is a good attempt to explain how commerce and politics work in today’s world. But before coming to that, we need to see how knowledge movement occurred before this idea.
Mercantilism is related to the proto-industrialization[iv] era of the 16th century feudal Europe and onwards to the early modern period of the formation of nation-states in the 18th century. It was the era of bullionism, marked by the reign of Queen Elizabeth (r. 1558-1603), who focused on adding up enough national resources to make England’s defense and navy at par with the powerful Spanish Empire. It worked on the simple idea of increasing exports and decreasing imports by levying high taxes on them.
Developmentalism and Modernization
In the wake of national liberation movements throughout Africa and Asia immediately after World War II, the idea of developmentalism came to the rescue as the US feared the loss of control over newly independent states and faced the threat of an expanding communist ideology. This idea emphasized economic growth built on industrial mass production and the notion that only a certain type of national economic structure is conducive to increased wealth.[v]
These ideas coincided with the era of neocolonialism and showed an ideological forwardness pushed by the changing needs of economic factors that suited the West. However, under this ideological forwardness lay the plan of extortion of the newly
liberated states after World War II. Its major tenet was to judge the legitimacy of a national government upon its economic performance rather than good governance or its people-friendly policies. They would have to actively participate in the international capitalist market to increase economic performance.
Above all, this developmentalism calls for separating bureaucracy and the political system. While politicians deal with national issues, bureaucrats should deal with the internationalism necessary to develop the nation’s economy.
So, posing to be a progressive and liberal ideology, developmentalism was a form of modern extortion and faced blowback in many states. In the Latin American debate on developmentalism, explained by Ramón Grosfoguel, there was a tension between protectionism and free trade.
He says, “Free trade and national sovereignty were ideas they [the Spanish Creole elites] defended as part of their struggle against the Spanish colonial monopoly of trade. However, for racial and class reasons, the modern ideas about individual freedom, rights of man, and equality were underplayed”,[vi] thus explaining how ideas are not always just an honest explanation of what is happening, but many times they are means of hijacking people’s consciences to accomplish certain ends.
Developmentalism’s implication that history is on a unilateral path of evolution towards development and culture has little implication on this linear world’s evolutionary chain shows how it is alienated from everything outside the capitalist system, everything in the real world.
Modernization, yet another knowledge movement, came to the fore as nascent states, experiencing statehood but no power in the world system and finding no prosperity in the capitalist hegemonic structure they were weaved in, started showing their anger in the form of protests and social movements. The 1968 worldwide protests[vii] were especially against capitalism, authoritarianism, and racism. This was followed by the 1970s economic stagnation.
Modernization was ‘understood in three different meanings: as the internal development of Western Europe and North America relating to the European New Era; as a process by which countries that do not belong to the first group of countries aim to catch up with them; and as processes of evolutionary development of the most modernized societies (Western Europe and North America), i.e. modernization as a permanent process, carried out through reform and innovation, which today means a transition [of the West] to a post-industrial society’.[viii]
Therefore, in this new ‘knowledge movement’ with a new evolutionary touch, developing states were still expected to imitate the developed world and follow in their footsteps to reach the epitome of a post-modern utopia if they could.
Perhaps globalization is just a later advancement in this ‘permanent process of modernization’ as humanity enters a supposed post-industrial era – an era foreseeing a future with supercomputers and innovative technologies like artificial intelligence, machine learning, quantum computing, blockchain, etc. It is also an era of extreme wealth inequality, where the ‘world’s richest one percent have more than twice as much wealth as 6.9 billion people[AS1] ’.[ix]
The question is whether this new post-industrial era will essentially strengthen the core-periphery divide within the global system as well as within states, or is there any hope in this strongly capitalist model to ever allow equal welfare for the whole of humanity? Especially when there is talk of geopolitics being replaced by geo-economics, giving the notion that, perhaps henceforth, all global moves will be made for economic gains, curtailing all other human entities like morality, human rights, etc. to a minimum. This economic factor is more eminent in the coming multipolar framework wherein the new emerging blocks like the BRICS, the SCO and the SPIEF are all posing to be economic blocs and not security-based ones like NATO, QUAD, I2U2 etc.
World-Systems Analysis
All these theories were centered in the West and saw the rest of the world only as a corollary of the economic interests of the West. History was supposed to be on a unilateral path of evolution towards Western capitalist style development; nothing else mattered, like the culture or belief or even the welfare of a people. Each theory ensured the economic submission of newly independent states to US capitalism and political control.
Against this backdrop, Immanuel Wallerstein developed the modern version of world-systems analysis, wherein the concept of a world-system was replaced with many world-systems that were connected in an axial division of labor. This allowed the legitimacy of regions and complex processes defined as outside the axial division of labor of the capitalist world economy.
Wallerstein tells us how the idea of liberalism was based on the three values of the market, the state, and the civil society. He explains the fact that because the ‘stagnation of the world economy beginning in the 1970s’ undermined the ‘dominance of centrist liberalism’ based on the ‘political autonomy of three separate spheres of social life – the market, the state, and the civil society’, conservative forces attempted to ‘reverse all the political, economic, and cultural changes that had occurred in the 1945-1970 period’ under the ‘deceptive label of neoliberalism’. This shifted the ‘analytic framework they applied to the world-system from “developmentalism” to something they called globalization’.
Wallerstein further asserts that this new framework was used ‘to impose, primarily via the US Treasury and the International Monetary Fund (IMF), a practical program that came to be called the Washington Consensus. This consensus demanded that all countries that were not ‘developed’ should institute a program that prioritized export-oriented growth while simultaneously opening their borders to foreign direct investment, privatizing state enterprises, reducing their welfare programs, and downsizing their bureaucracies’.[x]
More interestingly, Wallerstein’s idea of world-systems analysis, which he presents as a ‘knowledge movement’, is a divorce from the 19th-century social sciences, comprising disciplines that delineated the ‘West from the rest’, namely history (past and present); economics, political science, sociology (the market, the state, and the civil society), anthropology, and oriental studies (tribal cultures, frozen ‘high’ civilization) to a uni-disciplinary analysis of ‘a world’.[xi] A discipline that would be living, dynamic, and interrelated with all disciplines and where all factors ‘must be analyzed in their mutual defining of each other’.
In doing this, Wallerstein has attempted to lay bare the use of history, economics, and anthropology by the West as tools to legitimize their leadership and the leadership of their economic methods as the exemplar to be followed and standardized. All this, even when the world players were constantly feeling the pinch of its extortion – yet it is clear that the hegemonic system still controls the world-system to a great extent.[xii]
Camouflaged Western Ideologies
So far, it has been established that Western ideologies have been devised with the motive to disguise economic concerns under the cloak of a seemingly human-friendly political narrative – the flag has safeguarded the trade. Moving from international politics and economics to geopolitics and geo-economics, the same ulterior motive can be seen repeated, albeit cajoled in new attractive terminologies.
Nevertheless, the ‘knowledge movement’ is a strong idea; it opens the possibility of changing how we view our world. It questions the very framework onto which we weave our theories and lays open to inspection underlying simple assumptions that we have taken for granted in building our edifice of knowledge. This tendency of ‘knowledge movement’ is what allows us to move from the simple ideas of mercantilism and developmentalism to the complex ideas of dependency theory, globalization, and so on.
Knowledge spans geographically but accumulates temporarily, and this accumulation allows for more permutations and, thus, newer possibilities come to the fore, both in technological advancements and in ideology. In fact, technology and ideology seem to be growing side by side like the two strands of a winding double helix of the DNA.
Rather, consider the tri-helix of politics, economy, and sociology growing together, built upon the building blocks of new ideas and technologies, and bonded by the glue of practices and beliefs to realize the complexity of a world-system. A complexity that is multiplied as we add more indicators[xiii] to our analysis. Knowledge, therefore, moves evolutionarily in a normal pattern with ‘development-by-accumulation’ and sometimes episodically with zeitgeists who create interrupted periods of revolutionary science,[xiv] making new paradigms of thinking available to us.
When we talk of geo-economics as a new global force that may be replacing geopolitics, the idea is easier to assimilate if we are thinking of an underlying phenomenon of power and control that works in all possible ways to make its gains through the political front, the economic front, by way of force, or by any means at all. This means that, as politics moves globally, now if economics too is moving globally and can be used to gain power over people and control over resources, then perhaps one could understand geo-economics as a form of, or means of, gaining political ends – therefore equating economics itself to politics. This is in the sense that they are both complementing the same ends and becoming each other’s means.
For the same reasons, we also talk of political economy, which is like doing economics using politics as a tool, and reversely, we use the term economic politics, popularly called geo-economics, which would mean doing politics using economics as a tool. More simply, economics could be considered as an activity that creates the movement of goods, increases productivity, and hence brings general prosperity. But now, if in addition to these gains, it becomes a means to gain power and control upon ‘others’, and that also overwhelmingly, then one should hear the alarm sounding.
Freedom and the New Colonialism
Historically, when colonialism was ending in its direct form after World War II, and a wave of want of ‘self-determination and freedom’ hurled through nation after nation, these nations made their own unique struggles and wars against their colonial masters around the globe. Many states embraced the socialist ideal, and the people embraced this idea because they saw it as the only alternative to the enslaving capitalist exploitation under which they were suffering. Freedom, democracy, and rationalism were the magical words that opened the dream for a prosperous future for the commons.
The period between 1945 and the 1980s was not only the period of the Cold War but also the period when most countries gained their independence. So, three acts were going on. One that the political forces of the US and USSR, the two poles, were trying to pull each country into the capitalist or communist camp. The other was that the colonials, having to leave the riches of their colonies, were trying to install puppet regimes in their place that would act as middlemen who would be willing to secure their interests over those of the people. The third act was the realization of power in the previously subjugated nations. This realization brought with it the need for a firm identity and ideological ground to advance into the future.
At the same time, the creation of the UN and its related organizations made for a global platform, a club of nations that was apparently a democratic forum with one-country-one-vote, but behind the curtains, was overpowered by the victors of World War II. It seems that it was only natural for these victors to now think of converting their victories into fruits by devising methods to siphon the world’s riches towards themselves – and the transnational corporations (TNCs) were the perfect tools. Perhaps that was why ‘governments of recently de-colonized countries perceived TNCs as potential or actual agents of a neo-colonialist project aiming at exploiting national resources without adequate compensation and at interfering in the political process of the newly independent states’.[xv]
Indeed, the colonizing states had a predominantly capitalist mindset, to the extent that they approved of enslaving whole nations and whole continents so as to have them become means for their capitalist profiteering. The first amendments towards democratic rights in Britain and the US came only after World War I,[xvi] a war that had flattened many empires and, in whose aftermath, socialist regimes had taken place in several states. The fire of ‘reason’ and ‘human rights’, ignited by the Enlightenment and embodied in Socialism, was soon to reach back home to Protestant Western Europe and its biggest permanent colonies in North America. There was a reason to slowly embrace the idea of democracy and equal rights while still securing the privileges of the ruling elite and the white land owners.
The embrace of democracy by the capitalist West was, however, an oxymoron because of the reason that ‘capitalism and democracy follow different logics: unequally distributed property rights on the one hand, equal civic and political rights on the other… debate, compromise and majority decision-making within democratic politics versus hierarchical decision-making by managers and capital owners’.[xvii]
Despite the fact that most countries have embraced democracy as a form of government in one form or another, it has proven to be a mere tool in the hands of political elites or deep states of the countries, who use it as a cover behind which they can secure their broader economic interests. The TNCs secure the economic interests of the same controllers transnationally, making their economic empires and interests geo-economic.
In the move towards a post-industrialism era, it is notable that the TNCs have been predominantly based in Western Europe, North America, and Japan. .
According to a 2018 UN report, ‘“the top 2000 companies in 2017 accounted for $39 trillion in sales, $190 trillion in assets, and $57 trillion in market capitalization, over 50 percent higher than the 2003 figures, when top companies accounted for $25 trillion in sales and $31 trillion in market capitalization.
In both years, 18 economies had more than 99 percent of the world’s top firms, and together these economies account for the vast majority of all top 2000 companies. Together, these companies had $39 trillion in sales, $190 trillion in assets, and $57 [KR2] trillion in market capitalization in 2017. In comparison, world GDP was about $80 trillion in the same year2017’.”[xviii]
According to the report, more than 1,590 of the Forbes Global 2000 lists of top TNCs are based in the US and its allied states, while 233 are in China and 25 in Russia. And ‘“the same applies to global investment patterns. In 2000, developed countries owned almost 90 percent of global FDI stock. Today, their share has dropped to 75 percent…”’.[xix] The global foreign direct investment (FDI) flows slid by 13 percent in 2018, to $1.3 trillion from $1.5 trillion the previous year – the third consecutive annual decline, according to UNCTAD’s 2019 report.[xx]
Simply put, the international flow of financial resources to developing countries is either in the form of private investments or foreign aid. The private investment that is almost four times the foreign aid may be in the form of bank loans given through multinational companies based in the parent state or FDIs invested directly by the TNCs. Just like most TNCs are based in US-allied states, most of the FDIs are invested in projects related to these TNCs and in states that are ready to open their markets to policies dictated by the TNCs.[xxi]
‘World Politics’ Blockading ‘World Business’
Presumably, when Edward Luttwak coined the term geo-economics in 1990, he was trying to explain that even after the end of the Cold War, ‘world politics’ was not ready to give way to ‘world business’. This was because ‘states and blocs of states still existed’ which were ‘structured to jealously delimit their own territories’ to assert ‘exclusive control’ and because of the ‘internal impulses of their own bureaucracies’ that were not ready to lose their own controls. In these circumstances, ‘impelled by the bureaucratic urges of role-preservation and role-enhancement’, they devised ‘to acquire a “geo-economic” substitute for their decaying geopolitical role’.[xxii]
For Luttwak, ‘the goal of mercantilism was to maximize gold stocks, whereas the goal of geo-economics could only be to provide the best possible employment to the largest proportions of the population’[xxiii] – a simpleton analysis compared to what has really taken place in today’s times.
It seems that in Luttwak’s worldview, the evolving global nature of economics led by speedy transport, the internet, and developing technologies, would naturally lead to egalitarianism – as if excess wealth in terms of produce and services would be so huge that there would be no point in hoarding it away from common public use. But sadly, the reality is not so altruistic. In fact, human behavior in general practice shows an opposite trait which is locking away global wealth from the commons, even as it increases multiplicatively, as shown in the above figures.
In contrast to Luttwak, Leslie Sklair talks of a transnational capitalist class (TCC) that ‘operates in three spheres, the economic, the political, and the cultural-ideological’ and that the TCC is ‘emerging and is beginning to act as a global ruling class in some spheres. … the key feature of the globalization of the capitalist system … has been the profit-driven culture/–ideology of consumerism organized by this class and … the TCC is working consciously to obfuscate the effects of … the class polarization crisis and the crisis of ecological unsustainability of the global capitalist system’.[xxiv]
Being ‘stateless’ by definition and having a constitutional regime of their own, the TCC acts as a state-within-state in their base countries and as non-state actors in their host states. The TCC will make their own bargains with those states, independent of the law of either their own states or the state they are to enter for business.
On the one hand, owning the largest capitals in the world, the TCC influences their own government’s policymaking, devising them to legislate in the interests of the ‘capital’. On the other hand, bearing a promise of jobs and prosperity and owing to their transnational character, the TCC is able to take advantage of geographical differences. This gives them the ability to switch and re-switch resources and operations on regional and global scales,[xxv] giving them a manipulation value by which they can force development-thirsty states to make free-trade agreements that provide special tax concessions and low tariff rates for their FDIs by which they can be forced to give them access to unregulated labor.
The TCC maintains an increasingly widening rich-poor divide at the global scale. Parag Khanna explains, ‘some of the largest American-born firms such as GE, IBM and Microsoft are “collectively holding trillions of dollars tax-free offshore by having revenues from overseas markets paid to holding companies incorporated in Switzerland, Luxembourg, the Cayman Islands, or Singapore[AS3] ”’.[xxvi] And at the other end, inside developing states, the ‘foreign direct investments from transnational corporations managed by global professionals often mean bribes and consultancy fees for the bureaucrats in recipient countries’ governments and miserable jobs for the rest’.[xxvii][AJ4]
The Way of the TNCs
The TNCs that have conceptually evolved from the idea of multinational corporations are no longer bound to decision-making in their mother countries; rather, they have a decentralized management system and prefer to have decisions made at the supranational level. Being the largest, most capital- and skill-intensive, and the most innovative, the TNCs have acquired a clout. They exert direct political influence upon their parent states by lobbying and campaign contributions, leveraging informal ties to political leaders, and offering both ‘inducements’ or promises of new investment and ‘deprivations’ or threats of withdrawal of investment.[xxviii] [AJ5] [AS6] However, this political clout is not limited to their parent states.
Take the example of Nigeria. In November 2010, WikiLeaks disclosed Shell Oil’s own claim of involvement in the affairs of the state. Shell is the US-based subsidiary of Royal Dutch Shell (of Anglo-Dutch origin). Shell Oil claimed it had ‘inserted staff into all the main ministries of the Nigerian government’, giving it access to every movement of the politicians.
Ann Pickard, Shell’s vice-president for sub-Saharan Africa, had boasted that the ‘Nigerian government had “forgotten” about the extent of Shell’s infiltration and was unaware of how much the company knew about its deliberations’.[xxix]
Moreover, it was revealed that the drug company Pfizer had hired private investigators to find evidence against the Nigerian attorney general Michael Aondoakaa to pressure him into dropping charges against the company regarding ‘medical tests with the oral antibiotic Trovan conducted on children living in Kano during a meningitis epidemic in 1996’.[xxx]
Western Allies Face Competition
These instances clearly show both the use of political influence to achieve economic goals and economic activity to enhance political clout. However, the turn of the decades has not brought all good for the US and its Western allies; with its economic miracle, China has come out to be a global competitor in the business world, while Russia, in a quiet alliance with China, has reemerged as a daunting political force.
Among others that have come to the fore are Turkey, which has shown both economic stability and political outreach; India, which aspires to a greater role on the global stage owing to its weight of population and spread of land; and Brazil, whose economy is the largest in Latin America and the second largest in the Americas, and whose large oil reserves guarantee its potential role in the future.
The Rise of China
China’s foreign policy is particularly tied to its economic policy, and perhaps the new mood and pattern that China has developed in the way it does business around the world has had a profound impact on enhancing the geo-economics concept and giving it a real feeling.
China’s gross domestic product ([AS7] GDP) in 2 020 was $15,222,[xxxi] compared to the US GDP of $22,111,[xxxii] while the forecast says that China will overtake the US to become the world’s largest economy by 2028.[xxxiii] However, these figures alone do not show how China’s economic interests have permeated globally. In Africa, where Western interests and influence are entrenched insidiously deep, China’s ingress has been surprisingly successful. For instance, in Chad, a Françafrique country whose long-ruling dictatorial leaders Tombalbaye, Habré, and Déby accepted French patronage. So much so that French troops were directly responsible for the Déby government’s security, and France’s military and air base was so heavily deployed that Chad was called the “French aircraft carrier of the desert”.[xxxiv]
France uses Chad as a base for overt and covert interventions in all Communauté Financière Africaine (African Financial Community, CFA) zone countries. It intervened in Mali’s Tuareg crisis in 2012, where the French launched Operation Serval, which conducted over 20 major air campaigns against the desert-bound Tuareg, and in the Darfur crisis in Sudan, where it was reported that the rebels were using arms from Chad.[xxxv] All this hard work is rewarded with French dominance in the security and economic policies of these states and has been documented.[xxxvi]
China’s entry was not expected in such a tight environment. Chad had allowed Exxon Mobil, Chevron, and Petronas, along with World Bank funding, to drill for oil in 2000. However, in 2008, the World Bank withdrew its funds, alleging that these had not been used in the allocated sectors. At this, Déby gave China the rights to a large oil exploration zone, starting a relationship that kept getting warmer with the construction of several roads, railroads, and a hospital. In addition, a new international airport was also constructed in N’Djamena.
Chad, being a landlocked country, oil from its Francophone neighborhood was difficult to bring to the outside world, but China’s business model has proven to be transcontinental. A deal has been contracted that will allow this oil from Chad to be exported via Cameroon’s new port, again being built by China at Kribi on the western coastline of Africa. Another China-made port is being built in Cameroon at Lalabe to ship iron ore that China will mine at Mbalam.
On the other side of the continent, China is developing the Lamu Port in Kenya, which will connect to Ethiopia and South Sudan via highways and railroads under the LAPSSET Corridor Project.[xxxvii] In Sudan, China is building a railway from Khartoum to Port Sudan, constructing the Merowe hydroelectric dam, and making two power plants in Port Sudan and Rabak.
In neighboring Egypt, President Sisi signed the mega Suez Canal Corridor Project with China in 2014. This project will oversee[AJ8] [AS9] the construction of three canal cities, Suez, Ismailia, and Port Said, comprising industrial and commerce hubs and six associated ports[AJ10] . These are only a few of several more contracts China is pursuing in Africa. Recent updates indicate that Chinese investments and involvement in Egypt’s maritime sector have been substantial. Chinese companies such as Hutchison Ports and COSCO Shipping Ports have invested heavily in Egyptian ports, including Alexandria, El Dekheila, East Port Said, and Ain Sokhna[xxxviii].
Furthermore, the Suez Canal Economic Zone (SCE Zone) continues to attract major Chinese investments, particularly in green energy projects. In October 2023, Egypt signed agreements with Chinese companies to produce green fuel, including green ammonia and hydrogen, as well as potassium chloride. These projects represent a total investment of around $14.75 billion and aim to position SCE Zone as a major hub for green energy production in the Middle East and Africa[xxxix].
In Europe, China’s reach is no less astonishing. In 2019, Italy signed infrastructure projects, including four major port constructions.[xl] Infuriated at this, French President Emmanuel Macron said, ‘Time of European naïveté towards China is over’. He said it was Europe’s ‘uncoordinated approach’ that had allowed China to take ‘advantage of our divisions’.[xli]
Perhaps Macron was right, as over the last decade, 13 other EU states, including Poland, Estonia, Portugal, Belarus, Germany, and Greece, have made contracts under the Belt and Road Initiative (BRI) with China. China has been a part of the 16+1 format[xlii] between China and Central and Eastern European Countries (CEEC) since 2012. With a Chinese trade volume of $67.98 billion in the 16+1 format in 2017, China deals with investments, transport, finance, science, education, and culture projects with these states. Interestingly, the CEEC has all the members of the Warsaw Pact except East Germany, and the map of the 16+1 format shows the entire belt of Eastern Europe. One wonders if China is taking back twice the influence that NATO took away from Russia in Eastern Europe.
By the way, Russia is also a beneficiary of the Belt and Road Initiative. Since 2001, when Russia and China signed a friendship treaty, the two are pursuing a close-lipped but deep-seated fraternity that helps them consolidate their powers, the absence of which would force them to confront each other, disallowing a global role for both. China’s import of Russian oil and gas has surpassed that of Saudi Arabia, and the two complement each other’s stances on the South China Sea and the Ukraine and Crimea issues in the UN.
Ukraine, a state that Russia considers to be a post-Soviet space country, is not a place where it would allow Western interests to grow. The Euromaidan 2014 clearly showed that Russia would go to any extent to repel NATO and the EU from establishing their influence in Ukraine. In February 2022, Russia started a direct, conventional war with Ukraine over its insistence on wanting to be a part of NATO and the EU.
Interestingly, the same Ukraine also comes in the extended route map of the BRI’s on-land Silk Road Economic Belt. Since 2017, China has engaged in dredging projects[xliii] in Yuzhny Port in Odessa and Port of Chornomorsk. China has also worked on installing wind and solar plants and the 200 km Odesa-Mykolaiv-Kherson highway.[xliv]
The Chinese Strategy
These examples give a glimpse of how China is penetrating cross-continentally. However, there is a certain dissimilarity between the pre-World War II colonial penetration and the post-World War II Western penetration with the help of international institutions tilted to their benefit and the culture of buying off political elites of countries.
In contrast, China’s penetration is seemingly based on a mutually profitable, give-and-take, non-coercive, non-oppressive methodology. So, will China be able to get, with mere handshakes, channels into states that are fed up with the coercive policies of the developed world that want to build their post-industrial future standing on the backs of an already extorted, underdeveloped world, or will China prove to be another coercive hegemon, just waiting to gain the momentum that will eventually overweight any resistance to its will.
However, China is not exactly in a position to harbor such a notion of hegemony, even in the regional context, as it finds itself nestled in its increasingly multipolar neighborhood. The mood of the region, wherein Russia and China both tend to act like regional powers, is like a balance-of-power behavior between the two.
The two states that had remained embroiled in the Sino-Soviet split marked by opposing interpretations of Marxism-Leninism until the end of the Cold War are now making the most effective partnership against the West. In the post-Cold War era, the two seem to have supplemented each other’s foreign and economic policies, and the mutual non-threat allows them to further their geo-economic interests in the larger world.
Turkey, another emerging regional power that has shown its mettle in the Syrian War and its involvement in the Libyan crisis, is swiftly extending its economic interests in adjacent regions.
Binding Force of China, Russia, and Turkey
It seems that these three states are binding the region into a unity that will strengthen the economic scenario of each of them. The question is, how have their interests converged all of a sudden? Is it not that the emergence of geo-economics and the increased awareness of resource pockets, trade routes, and industrial and market interdependencies have necessitated economic ‘flow security’ over conventional border securities?
Luttwak said in 1990, “Everyone, it appears, now agrees that the methods of commerce are displacing military methods – with disposable capital in lieu of firepower, civilian innovation in lieu of military-technical advancement, and market penetration in lieu of garrisons and bases”.[xlv]
Perhaps, he thought that the soft balancing of power that arises from economic security concerns would cause a relative decline in military concerns. For instance, so far, the US has used only economic and financial sanctions against Russia’s territorial expansion in Crimea, and US/EU backing of Ukraine in the face of Russian direct intervention has so far been ineffective and fruitless. It is also propounded that China benefits from being a part of the liberal world as its wealth relies on access to and utilization of global markets, especially Western end-markets, for its exports.
The question is, has the US’ resort to sanctions against Russia and China not been because it was already war-weary due to heavy losses in Afghanistan, Iraq, and Syria and that it was not yet ready for a new war? Has China not made its own alternative multilateral financial institutions, like the Asian Infrastructure Investment Bank and the New Development Bank, and spread a web of its economic corridors worldwide that gave it access to markets regardless of the US and its European allies?
The Trade War
Geoeconomics took a suicidal plunge when US president Donald Trump initiated a Trade War with China with setting tariffs and trade barriers on China, in return of China’s unfair trade practices and intellectual property theft[xlvi]. The US dragged all its allies into this Trade War, forcing them to comply with the sanctions they had levied on China, even if that hurts their own economies and industries[xlvii]. At the beginning of the war there was the idea of ‘decoupling’ from China altogether. When this idea proved to be completely impractical, it was changed into the idea of ‘de-risking’, which meant continuing trade with China but only after a sterilization process wherein all possible risks of security and intellectual theft have been dealt with[xlviii].
Interestingly, a major component of this Trade War was the ‘semiconductor’ war. The semiconductor supply-chain presented a perfect example of how the world had integrated into a global village, wherein interdependence of specialized geographic locations had created a balance of power that would push countries towards cooperation and prevent war. Semiconductors are perhaps the world’s most sophisticated and research-intense industry. The semi-conductor chips were ‘designed’ in the US, and ‘fabricated’ in Taiwan. The industry used highly technical ‘tools’ made in the Netherlands, and once ready they were sold to China for ‘packaging’ into appliances, wherefrom the finished-product was supplied through the world. This was a perfect example of globalization and geoeconomics – everyone depended on each other, and every link was indispensable for the others.
Taiwan Semiconductor Manufacturing Co (TSMC), produces 90% of the world’s most advanced chips that are close to or less than 10nanometer in size. The idea of decoupling or derisking, or the idea of a China-Taiwan War, would not only isolate Taiwan from its biggest trade partner as China buys 42% of Taiwan’s export and Taiwan buys 22% of China’s. Rather, it would disrupt a global supply-chain that serve everyone. Nevertheless, US president Jo Biden, who succeeded Trump has kept the tariffs in place[xlix].
The bitter lesson learned was that the Trade War did not achieve the primary objective of reviving American manufacturing nor did it result in the reshoring of factory production[l]. Though the trade war led to higher employment in certain industries, tariffs led to a net loss of U.S. manufacturing jobs, and US trade deficit increased.
Is Geo-Economics the New Form of Statecraft?
According to Richard Youngs, geo-economics is “the use of statecraft for economic ends; a focus on relative economic gain and power; a concern with gaining control of resources; the enmeshing of state and business sectors; and the primacy of economic over other forms of security”.[li]
This type of definition is state-centric and simplified, as it dismisses the fact that economic-politics and political-economy, though two different methods, are easily replaceable by one another as the circumstances call for. Moreover, not resorting to military means for securing economic ends is only up to the time when that patience for the ‘other’ is not lost and one is not over-assured that one’s military might is invincible.
This means that with geoeconomics we are more aware of our dependency on a relentless global circulation of resources, goods, data, and people. At the state level, there is a more profound realization of how crucial this global– flow security is for their sustainability, progress, and power, yet even all this interdependency and sensibility does not stop states from accumulating more and more weapons.
The human element and the actualization of its potential will always be the biggest threat impending upon possible peace. So, it remains a question of whether geo-economics is a real, unescapable concept of our times, or is it just a discourse being used by Western ideologists to shape peoples’ worldview or perhaps a discourse that helps veil the defamed neoliberal project that is at work to secure the US-led global- hegemonic system in this new globalization era.
So, can geo-economics be the new form of statecraft and, more so, has geo-economics brought with it the wisdom of unity and cooperation, ultimately bringing egalitarian good to human society, or will it too be used as a discursive tool that will again be used by the inventiveness of the powerful to lure the weak into their own zero-sum gains. So, we are in the middle, at the edge of a sword, where the complex interconnectedness of today’s commerce has put even the strong states, with all their military wherewithal, in a mode of risk-aversion rather than that of unneeded confrontation, and where in the avarice of power some are tempted to break this working interconnectedness with every passing moment. .
With increased political awareness brought by media and activism, states also face internal threats that force them to work for both their economic growth and political weightage. Increasingly, the populations of states are becoming war-weary and more concerned with their internal stability and progress. Increasingly, businesses want to be connected to the global financial flows – and more states are focusing on using geo-economics as a means of statecraft. As long as a state can maintain its economic security, competitiveness, and independence, war is not desired, as all wars can be fought on the economic fronts, like civilized people. The same tools of markets, finances, and technologies can be used to control their own increasingly dissatisfied populations. Yet, sadly, powerful states will resort to war whenever they discover that other means are not bending global trade flows to their own interests.
Nevertheless, as globalization is being evolved in new ways in a coming multipolar framework, even though stuck in the two devastating wars of Ukraine and Gaza, there seems to be a forward movement towards geoeconomics in place of geopolitics. This is seen in the emergence of the BRICS, the SCO and the Global South as blocs pursuing economic integration in place of security integration. However, it remains to be seen in time, if these same blocs remain economy-based or turn into security complexes. For now, as in the case of the BRICS, there is talk of creating a gold-backed currency reflecting the relative weight of corresponding economies[lii]. States from around the globe that have become wary of wars and security competition, are being attracted to this new idea wherein all partners will have due place and progress and wherein any one powerful state will not try to become a global hegemon.
References
[i] Francis Fukuyama, End of History and the Last Man’, 1992, Free Press
[ii] Edward N. Luttwak, “From Geopolitics to Geo-Economics: Logic of Conflict, Grammar of Commerce,” The National Interest, no. 20 (Summer 1990): 17-23, https://www.jstor.org/stable/42894676
[iii] A.H. Maslow, “A Theory of Human Motivation,” Psychological Review 50 (1943): 370-396, http://psychclassics.yorku.ca/Maslow/motivation.htm
[iv] Charles Tilly, “Flows of Capital and Forms of Industry in Europe, 1500-1900,” June 1981, CRSO Working Paper No. 237, https://deepblue.lib.umich.edu/bitstream/handle/2027.42/51011/237.pdf?sequence=1
[v] Erik S. Reinert, Developmentalism, December 2010, Working Papers in Technology Governance and Economic Dynamics No. 34, http://hum.ttu.ee/wp/paper34.pdf
[vi] Ramón Grosfoguel, “Developmentalism, Modernity, and Dependency Theory in Latin America,” Nepantla: Views from South 1:2, (2000), https://www.umass.edu/legal/Benavides/Fall2005/397U/Readings%20 Legal%20397U/5%20Ramon%20Grosfoguel.pdf
[vii] Steven M. Gillon, “The Revolution That Was 1968: As simmering political and cultural resentments exploded in 1968, nearly every week produced news of another earth-shattering event,” History.com, February 23, 2018, https://www.history.com/news/the-revolution-that-was-1968
[viii] Igor Klyukanov and Sergei Gavrov, “Modernization, Sociological Theories of,” International Encyclopedia of the Social & Behavioral Sciences, 2nd edition, Vol. 15 (2015), https://www.academia.edu/ 24901103/Modernization_Sociological_Theories_of
[ix] “A deadly virus: 5 shocking facts about extreme global inequality,” Oxfam International, accessed July 11December 25, 20241, https://www.oxfam.ca/news/worlds-richest-1-have-more-than-twice-as-much-wealth-as-6-9-billion-people-says-oxfam/#:~:text=(Ottawa)%20%E2%80%93%20Global%20inequality%20is,to%20a%20new%20Oxfam%20report.
[x] Immanuel Wallerstein, “World-systems analysis,” Sociopedia.isa, 2013, DOI: 10.1177/2056846013114, https://sociopedia.isaportal.org/resources/ resource/world-systems-analysis/download/
[xi] Ibid.
[xii] Larry Elliott, World’s 26 richest people own as much as poorest 50%, says Oxfam, Guardian, 21 Jan 2019, https://www.theguardian.com/ business/2019/jan/21/world-26-richest-people-own-as-much-as-poorest-50-per-cent-oxfam-report
[xiii] Note: In levels of analysis, variables rarely can be observed directly, so, we have to look at them indirectly on a somewhat more concrete level, namely that of indicators or proxies.
[xiv] Thomas S. Kuhn, The Structure of Scientific Revolutions (Chicago: The University of Chicago, 1970), https://www.lri.fr/~mbl/Stanford/CS477/ papers/Kuhn-SSR-2ndEd.pdf
[xv] Mathias Koenig-Archibugi, “Transnational Corporations and Public Accountability,” Government and Opposition Ltd, Vol. 39, Issue 2, (January 2004): 234-259, doi:10.1111/j.1477-7053.2004. 00122.x, https://web.archive.org/web/20160222070146/http:/dspace.africaportal.org/jspui/bitstream/123456789/8719/1/Transnational%20Corporations%20and%20Public%20Accountability.pdf?1
[xvi] Democracy, Democratic Institutions, Encyclopedia Britannica, retrieved Feb.3, 2023, https://www.britannica.com/topic/democracy/ England
[xvii] Wolfgang Merkel, “Is capitalism compatible with democracy?” Z Vgl Polit Wiss, Vol. 8 (July 2014), DOI10.1007/s12286-014-0199-4, https://projects.iq.harvard.edu/files/mobilized_contention/files/merkel_-_is_capitalism_compatible_with_democracy.pdf
[xviii] “Transnational Corporations Investment and Development,” UNCTAD, Vol. 25, no. 2 (April, 18, 2018), ISBN: 978-92-1-112933-5, https://unctad.org/system/files/official-document/diae2018d4_ en.pdf
[xix] Ibid.
[xx] “World Investment Report, Special Economic Zones,” UNCTAD, 2019, ISBN 978-92-1-112949-6, https://unctad.org/system/files/official-document/wir2019_en.pdf
[xxi] Professor Raymond Markey & Katherine Ravenswood, The Effects of Foreign Direct Investment and Multinational Enterprises on the areas covered by the 1977 MNE Declaration of the ILO, A Global Holistic Scan, September 2009, New Zealand Work & Labour Market Institute, Auckland University of Technology, http://www.ilo.org/wcmsp5/ groups/public/@ed_emp/@emp_ent/@multi/documents/publication/ wcms_117580.pdf
[xxii] Edward N. Luttwak, “From Geopolitics to Geo-Economics: Logic of Conflict, Grammar of Commerce,” The National Interest, no. 20 (Summer 1990): 17-23, https://www.jstor.org/stable/42894676
[xxiii] Ibid.
[xxiv] Leslie Sklair, “Competing Conceptions of Globalization,” Journal of World-Systems Research, 5(2), (August 1999): 142-163, DOI: https://doi.org/10.5195/jwsr.1999.140
[xxv] Peter Dicken, Global Shift: Transforming the World Economy, 3rd edition (London: Sage Publications Ltd, 1998), ISBN-10: 1853963674
[xxvi] Parag Khanna and David Francis, “These 25 Companies Are More Powerful Than Many Countries,” Foreign Policy, accessed July 11February 3, 20243, https://foreignpolicy.com/2016/03/15/these-25-companies-are-more-powerful-than-many-countries-multinational-corporate-wealth-power/?utm_content=bufferd66be&utm_medium=social&utm_source= facebook.com&utm_campaign=buffer
[xxvii] Voldemar Tomusk, “The rise of the transnational capitalist class and World Bank ‘aid’ for higher education,” International Studies in Sociology of Education, 12:3, (2002); 335-352, DOI: 10.1080/ 09620210200200097
[xxviii] Joseph S. Nye, “Multinational Corporations in World Politics,” Foreign Affairs 53, no. 1 (October 1974): 153-175, https://www.jstor.org/stable/ 20039497
[xxix] David Smith, “WikiLeaks cables: Shell’s grip on Nigerian state revealed,” The Guardian, December 8, 2010, https://www.theguardian.com/ business/2010/dec/08/wikileaks-cables-shell-nigeria-spying
[xxx] “US embassy cables: Pfizer nears $75m Nigeria settlement,” The Guardian, December 9, 2010, https://www.theguardian.com/world/us-embassy-cables-documents/203205
[xxxi] C. Textor, “Gross domestic product (GDP) at current prices in China from 1985 to 2019 with forecasts until 2025,” Statista,accessed JulyOctober 1121, 20241, https://www.statista.com/statistics/263770/gross-domestic-product -gdp-of-china/#:~:text=In%202019%2C%20the%20gross%20domestic, trillion%20U.S.%20dollars)%20in%202020.
[xxxii] “Forecast of the U.S. Gross Domestic Product (GDP) for fiscal years 2019 to 2030,” Statista,January 20, 2021, https://www.statista.com/ statistics/216985/forecast-of-us-gross-domestic-product/
[xxxiii] Evelyn Cheng and Yen Nee Lee, “New chart shows China could overtake the U.S. as the world’s largest economy earlier than expected,” CNBC, January 2, 2021, https://www.cnbc.com/ 2021/02/01/new-chart-shows-china-gdp-could-overtake-us-sooner-as-covid-took-its-toll.html
[xxxiv] Chrysantus Ayangafac, “Resolving the Chadian Political Epilepsy: An Assessment of Intervention Efforts,” Institute for Security Studies,Situation Report, (June 1, 2009), https://media.africaportal.org/ documents/CHAD1-06-09.pdf
[xxxv] “Supply and demand, Arms flows and holdings in Sudan,” Small Arms Survey, Sudan Issue, HSBA, December 2009, https://reliefweb.int/ report/sudan/sudan-issue-brief-no-15-dec-2009-supply-and-demand
[xxxvi] Marco Wyss, “France and the Economic Community of West African States Peacekeeping Partnership in Theory and Practice,” Journal of Contemporary African Studies 35, Issue 4 (July 6, 2017) pg. 487-505, https://doi.org/10.1080/02589001.2017.1348600
[xxxvii] “Lamu Port South Sudan – Ethiopia Transport (LAPSSET) Corridor Project – Project Appraisal Report,”African Development Bank Group, January 30, 2020,https://www.afdb.org/en/documents/lamu-port-south-sudan-ethiopia-transport-lapsset-corridor-project-project-appraisal-report
[xxxviii] Amr Salah Mohamed, China’s growing maritime presence in Egypt’s ports and the Suez Canal, MEI, Nov. 3, 2023, https://www.mei.edu/publications/chinas-growing-maritime-presence-egypts-ports-and-suez-canal
[xxxix] Egypt, China sign agreements to produce Green Fuel at Suez Canal Economic Zone, Egypt Today, Oct. 7, 2023, https://www.egypttoday.com/Article/3/127764/Egypt-China-sign-agreements-to-produce-Green-Fuel-at-Suez
[xl] Stuart Lau, “Italy may be ready to open up four ports to Chinese investment under ‘Belt and Road Initiative’,” South China Morning Post, March 19, 2019, https://www.scmp.com/news/china/diplomacy/article/ 3002305/italy-may-be-ready-open-four-ports-chinese-investment-under
[xli] “French President hails the ‘end of European naïveté’ towards China,” China Economy Review, March 25, 2019, https://chinaeconomicreview.com/french-president-hails-the-end-of-european-naivete-towards-china/
[xlii]“‘16+1’ mechanism set to bolster China-Europe ties,” The State Council China, July 6, 2018, https://english.www.gov.cn/news/international_ exchanges/2018/07/06/content_281476211556242.htm
[xliii] Turloch Mooney, “Ukraine port dredging latest notch in Belt and Road,” Journal of Commerce, May 22, 2017, https://www.joc.com/ international-trade-news/infrastructure-news/europe-infrastructure-news/ukraine-dredging-latest-notch-belt-and-road_20170522.html
[xliv] “China Road and Bridge Awarded Odessa-Mykolaiv Highway Project; China Continues to Invest in Ukraine, but Outside of Crimea,” RWR Advisory Group, July 10, 2017, https://www.rwradvisory.com/china-road-and-bridge-awarded-odessa-mykolaiv-highway-project-china-continues-to-invest-in-ukraine-but-outside-of-crimea/
[xlv] Edward N. Luttwak, “From Geopolitics to Geo-Economics: Logic of Conflict, Grammar of Commerce,” The National Interest, no. 20 (Summer 1990): 17-23, https://www.jstor.org/stable/42894676
[xlvi] Ana Swanson, Trump’s Trade War With China Is Officially Underway, July 5, 2018, New York Times, https://www.nytimes.com/2018/07/05/business/china-us-trade-war-trump-tariffs.html
[xlvii] Simon Hinds, What Industries Will Be Hurt By A China-Europe Trade War? April 19, 2024, Altium, https://resources.altium.com/p/what-industries-will-be-hurt-china-europe-trade-war
[xlviii] Andreea BRINZA, Una Aleksandra BĒRZIŅA-ČERENKOVA, Philippe LE CORRE, John SEAMAN, Richard TURCSÁNYI, Stefan VLADISAVLJEV, EU-China relations: De-risking or de-coupling − the future of the EU strategy towards China, European Parliament, March 2024, https://www.europarl.europa.eu/RegData/etudes/STUD/2024/754446/EXPO_STU(2024)754446_EN.pdf
[xlix] U.S. updates export curbs on AI chips and tools to China, March 30, 2024, Reuters, https://www.reuters.com/technology/us-commerce-updates-export-curbs-ai-chips-china-2024-03-29/
[l] Josh Zumbrun, Bob Davi, China Trade War Didn’t Boost U.S. Manufacturing Might, Oct. 25, 2020, https://www.wsj.com/articles/china-trade-war-didnt-boost-u-s-manufacturing-might-11603618203
[li] Youngs R (2011) Geo-economic futures, Martiningui, A and Youngs, R (eds), Challenges for European Foreign Policy, 2012: What Kind of Geo-Economic Europe? Madrid: FRIDE, https://www.files.ethz.ch/isn/ 143630/Challenges_for_European_Foreign_Policy_in_2012.pdf
[lii]Paulo Nogueira Batista Jr., BRICS currency? Contemporary World Economics, Aug, 19, 2023, https://cwejournal.hse.ru/index.php/cwejournal/pnoguiera-3-2023
[AS1]access date and link changed
[KR2]repeat
[AS3]access date changed
[AJ4]quite an old reference
[AJ5]quite an old reference
[AS6]yes but they are needed to make the sequence of the writeup, replacements will not be the same!
[AS7]Access date changed
[AJ8]current poition?
[AS9]Info added
[AJ10] [AJ10]The Suez Canal Corridor Project, initiated by Egypt and China in 2014, has seen significant developments and ongoing activities. This project aims to transform the region through the construction of three canal cities—Suez, Ismailia, and Port Said—along with industrial and commercial hubs and six associated ports.
Recent updates indicate that Chinese investments and involvement in Egypt’s maritime sector have been substantial. Chinese companies such as Hutchison Ports and COSCO Shipping Ports have invested heavily in Egyptian ports, including Alexandria, El Dekheila, East Port Said, and Ain Sokhna. For instance, Hutchison Ports is developing a new terminal in Ain Sokhna, which will enhance the port’s capacity significantly. (https://www.mei.edu/publications/chinas-growing-maritime-presence-egypts-ports-and-suez-canal)
Furthermore, the Suez Canal Economic Zone (SCZone) continues to attract major Chinese investments, particularly in green energy projects. In October 2023, Egypt signed agreements with Chinese companies to produce green fuel, including green ammonia and hydrogen, as well as potassium chloride. These projects represent a total investment of around $14.75 billion and aim to position SCZone as a major hub for green energy production in the Middle East and Africa. (https://www.egypttoday.com/Article/3/127764/Egypt-China-sign-agreements-to-produce-Green-Fuel-at-Suez)
Despite these advancements, challenges remain. Suez Canal revenues have faced recent declines due to geopolitical tensions, particularly the conflict involving Houthi rebels in Yemen. These tensions have disrupted shipping activities and affected overall canal revenues (https://english.ahram.org.eg/NewsContent/1/1235/518017/Egypt/Urban–Transport/Egypt%E2%80%99s-Suez-Canal-revenue-has-dropped–in–Sisi.aspx)
In summary, the Suez Canal Corridor Project continues to evolve with substantial Chinese investment, focusing on enhancing Egypt’s infrastructure and industrial capabilities while also navigating geopolitical and economic challenges.
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