Table Of ContentGeo- Economics and Power Politics in
the 21st Century
Starting from the key concept of geo- economics, this book investigates the new
power politics and argues that the changing structural features of the contemporary
international system are recasting the strategic imperatives of foreign policy
practice.
States increasingly practise power politics by economic means. Whether it is
about Iran’s nuclear programme or Russia’s annexation of Crimea, Western states
prefer economic sanctions to military force. Most rising powers have also become
cunning agents of economic statecraft. China, for instance, is using finance, invest-
ment and trade as means to gain strategic influence and embed its global rise. Yet
the way states use economic power to pursue strategic aims remains an under-
studied topic in International Political Economy and International Relations. The
contributions to this volume assess geo- economics as a form of power politics.
They show how power and security are no longer simply coupled to the physical
control of territory by military means, but also to commanding and manipulating
the economic binds that are decisive in today’s globalised and highly intercon-
nected world. Indeed, as the volume shows, the ability to wield economic power
forms an essential means in the foreign policies of major powers. In so doing, the
book challenges simplistic accounts of a return to traditional, military-d riven geo-
politics, while not succumbing to any unfounded idealism based on the supposedly
stabilising effects of interdependence on international relations. As such, it
advances our understanding of geo- economics as a strategic practice and as an
innovative and timely analytical approach.
This book will be of much interest to students of security studies, inter-
national political economy, foreign policy and International Relations in general.
Mikael Wigell is Senior Research Fellow at the Finnish Institute of International
Affairs and Adjunct Professor in International Political Economy at the Univer-
sity of Tampere, Finland.
Sören Scholvin is Research Fellow at the Institute of Economic and Cultural
Geography, University of Hanover, Germany.
Mika Aaltola is Director of the Global Security Programme at the Finnish Insti-
tute of International Affairs. He also works as Professor of International Rela-
tions at Tallinn University, Estonia.
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US National Security Reform
Reassessing the National Security Act of 1947
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Geo- Economics and Power Politics in the 21st Century
The Revival of Economic Statecraft
Edited by Mikael Wigell, Sören Scholvin and Mika Aaltola
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Geo- Economics and Power
Politics in the 21st Century
The Revival of Economic Statecraft
Edited by
Mikael Wigell,
Sören Scholvin
and Mika Aaltola
First published 2019
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
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Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2019 selection and editorial matter, Mikael Wigell, Sören Scholvin, and
Mika Aaltola; individual chapters, the contributors
The right of Mikael Wigell, Sören Scholvin, and Mika Aaltola to be
identified as the authors of the editorial matter, and of the authors for their
individual chapters, has been asserted in accordance with sections 77 and
78 of the Copyright, Designs and Patents Act 1988.
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British Library Cataloguing-i n-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-i n-Publication Data
Names: Wigell, Mikael, editor. | Scholvin, Sèoren, editor. |
Aaltola, Mika, editor.
Title: Geo-economics and power politics in the 21st century : the revival
of economic statecraft / edited by Mikael Wigell, Sèoren Scholvin, and
Mika Aaltola.
Description: Abingdon, Oxon ; New York, NY : Routledge, 2018. | Series:
Routledge global security studies | Includes bibliographical references
and index.
Identifiers: LCCN 2018012150| ISBN 9780815397304 (hardback) |
ISBN 9781351172288 (e-book)
Subjects: LCSH: International economic relations–Political aspects. |
Balance of power–Economic aspects. | Geopolitics–Economic aspects. |
International relations–Economic aspects.
Classification: LCC HF1359 .G4695 2018 | DDC 337–dc23
LC record available at https://lccn.loc.gov/2018012150
ISBN: 978-0-8153-9730-4 (hbk)
ISBN: 978-1-351-17228-8 (ebk)
Typeset in Times New Roman
by Wearset Ltd, Boldon, Tyne and Wear
Contents
List of figures vii
List of tables viii
List of contributors ix
1 Geo- economic power politics: an introduction 1
SöREN SCHOLVIN AND MIKAEL WIGELL
2 Geo- economics as a dimension of grand strategy: notes on
the concept and its evolution 14
BRAz BARACuHY
3 Interdependence as dependence: economic security in the
age of global interconnectedness 28
CHRISTIAN O. FjäDER
4 Critical infrastructure in geostrategic competition:
comparing the US and Chinese Silk Road projects 43
JuHA KäpYLä AND MIKA AALTOLA
5 Germany’s liberal geo-e conomics: using markets for
strategic objectives 61
HANS KUNDNANI
6 The Russian ‘pivot’ to Asia- Pacific: geo-e conomic
expectations and disappointments 75
PAVEL K. BAEV
7 US grand strategy in flux: geo- economics, geopolitics and
the liberal international order 89
KARI MöTTöLä
vi Contents
8 Leverage of economic sanctions: the case of US sanctions
against Iran, 1979–2016 99
PAUL RIVLIN
9 Energy and the future of US primacy: the geostrategic
consequences of the shale revolution 114
NIKLAS ROSSBACH
10 Learning geo- economics: China’s experimental path
towards financial and monetary leadership 128
MIKKO HUOTARI
11 Development lending as financial statecraft? A comparative
exploration of the practices of China and Japan 145
MIKAEL MATTLIN AND BART GAENS
12 China’s economic statecraft in Latin America: geostrategic
implications for the United States 164
MIKAEL WIGELL AND ANA SOLIz LANDIVAR
13 Oil as a strategic means in Venezuela’s foreign policy:
the cases of ALBA and Petrocaribe, 1998–2013 182
MARTHA LUCíA MáRqUEz RESTREPO
14 India, Pakistan and the contest for regional hegemony:
the role of geo-e conomics 192
SMRUTI S. PATTANAIK
15 Geo- economics and geopolitics in sub-S aharan African
power politics 202
SöREN SCHOLVIN
16 Conclusion 219
SöREN SCHOLVIN, MIKAEL WIGELL AND MIKA AALTOLA
Index 228
Figures
9.1 US net imports of crude and petroleum products 119
10.1 Sum of foreign assets and liabilities as per cent of GDP 129
10.2 China’s rise as a global direct investor 134
11.1 China’s foreign aid forms 2010–2012 150
11.2 Japan’s ODA distribution by region 2014 152
11.3 China’s foreign aid by number of recipient countries per
region 2010–2012 153
12.1 Chinese loans to Latin America 2005–2015 168
12.2 Sector distribution of Chinese greenfield foreign direct
investment in Latin America and the Caribbean 2010‒2014 169
12.3 Comparison of the Chinese lending and uS foreign aid in
Latin America 2005–2015 174
Tables
3.1 DHL global connectedness index 2005–2014 32
3.2 MGI global ranking 2014 33
3.3 Major foreign holders of uS treasury securities as of June
2015 37
8.1 Iranian oil production and export revenues 2010–2015 108
8.2 GDp growth 2006–2014 109
10.1 Schemes for crisis liquidity provision 130
10.2 Selected internationally active outbound financing vehicles 136
10.3 Emerging global RMB infrastructure: the Hong Kong model
goes global 140
11.1 Development lending as forms of financial statecraft in
Japanese and Chinese lending 158
12.1 Latin American countries’ estimated FDI flows from China
1990–2015 166
12.2 Top Chinese infrastructure projects in Latin America 167
13.1 pDVSA’s joint ventures with Chinese and Russian partners 184
13.2 Mixed companies created under the petrocaribe agreement 187
13.3 Debt of petrocaribe states to Venezuela 188
14.1 Comparative national power of India and pakistan 193
14.2 Distances between Central Asian cities and regional ports 195
14.3 India’s and pakistan’s exports to Central Asia 197
14.4 India’s and Pakistan’s intra-S AARC trade 198
Contributors
Mika Aaltola is Program Director of the Global Security Research Programme
at the Finnish Institute of International Affairs (FIIA) and professor of Inter-
national Relations at Tallinn University, Estonia.
Pavel K. Baev is a Research Professor at the Peace Research Institute Oslo
(pRIO). He is also Senior Non-R esident Fellow at the Brookings Institution,
Washington, DC, and Senior Associate Fellow at the Institut Française des
Relations Internationales (IFRI), paris.
Braz Baracuhy is Deputy- Director for policy planning at the Office of the
Brazilian Foreign Minister, Brasília.
Christian O. Fjäder is a Senior Visiting Research Fellow at the Finnish Insti-
tute of International Affairs (FIIA) and Director of policy, planning and
Analysis at the National Emergency Supply Agency, Finland.
Bart Gaens is a Senior Research Fellow at the Global Security Research
Program and Project Director for the Center on US Politics and Power at the
Finnish Institute of International Affairs (FIIA) in Helsinki. He is also
Adjunct Professor at the University of Helsinki, and Specially- Appointed
Associate Professor at the University of Osaka.
Mikko Huotari is Head of Program at the Mercator Institute for China Studies
(MERICS), Berlin.
Hans Kundnani is Senior Transatlantic Fellow at the German Marshall Fund
and Associate Fellow at the Institute for German Studies at Birmingham
University.
Juha Käpylä is a Senior Research Fellow in the Global Security Research Pro-
gramme at the Finnish Institute of International Affairs (FIIA), Helsinki.
Mikael Mattlin is a Senior Lecturer in International Politics and Adjunct Pro-
fessor at the University of Turku, Finland. He is also Non- Resident Senior
Fellow at the China Policy Institute, Nottingham University and Associate
Research Fellow of the European Research Centre on Contemporary Taiwan
at Tübingen University.
