New War Fronts Lie in Economic Zones

New War Fronts Lie in Economic Zones

CSS and PMS Solved Essays | New War Fronts Lie in Economic Zones

Sidra Nawaz, a Sir Syed Kazim Ali student, has attempted the CSS essay New War Fronts Lie in Economic Zoneson the given pattern, which Sir Syed Kazim Ali teaches his students. Sir Syed Kazim Ali has been Pakistan’s top English writing and CSS, PMS essay and precis coach with the highest success rate of his students. The essay is uploaded to help other competitive aspirants learn and practice essay writing techniques and patterns to qualify for the essay paper.

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1- Introduction

  • Economic standing has supplanted military might as a symbol of a state’s power, making economic zones the new battlefields.
  • The developed world strives for economic exploitation of the third world by the use of modern financial weapons like controlling their natural resources, imposing sanctions, and trapping them in debt.
  • Although perceived as a nonviolent means of warfare, conflicts between economic blocks hold dire consequences and pose an imminent threat of a new economic cold war.

2- New world order: the dawn of multipolarity

  • Shift from uni-polarity to bi-polarity, now unfolding towards unbalanced multipolarity

3- Why are emerging war fronts along economic zones instead of battlefields?

  • The historical technique of conventional warfare becoming obsolete with the advent of WMDs
  • Classical war having huge consequences, whereas economic warfare being comparatively less violent
  • Earlier, security guarantee global supremacy; monetary might symbolized its power.

4- An overview of Weapons of economic war fronts

  • ✓Sanctions and embargos
  • ✓International aid and debt trap
  • ✓Destabilization of rival’s economy
  • ✓Blocking shipping pathways
  • ✓Control over natural resources

5- Current manifestations of conflicts across economic zones

  • ✓Global rivals competing for economic infrastructure projects: China-backed BRI, US-supported B3W and PGII
  • ✓Rivalries between Economic blocks of the North and the South
  • ✓The China-US trade war: a demonstration of modern war
  • ✓Countries striving to control maritime trade routes to exert influence 
  • ✓Trade sanctions imposed by powerful states deteriorating the already struggling economies of weaker states
  • ✓Embargoes authorized by International Organizations like the U.N. hindering some states’ economic development
  • ✓The de-dollarization campaign redefining the global economy and trade
  • ✓Competition to acquire maximum raw materials and natural resources

6- How can states mitigate the threat of economic wars?
7- Critical Analysis
8- Conclusion

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In today’s highly globalized world, economic standing has supplanted military might as a symbol of the state’s power, and GDP has become an indication of hegemony. As the multipolar world order materializes, economic zones develop as new battlegrounds where rivals compete to control trade routes and economic infrastructure instead of chasing enemies in traditional battlefields. Moreover, the formation of regional blocks and the clash between West-backed liberal economic ideology and East-supported socialistic policies have put immense pressure on the weaker states to pick a side, and staying neutral is not a choice anymore. The developed states strive for economic exploitation of the third world nations by modern weapons like controlling their natural resources, imposing sanctions, and trapping them in debt. Although perceived as a nonviolent means of warfare, it holds dire consequences for the global economy and international politics and poses an imminent threat of a new economic cold war. However, by prudently analyzing the situation, states should utilize economic interdependence in their favour and abide by international laws for peaceful coexistence. This essay sheds light on how economic zones have transformed into new war fronts and manifestations of economic conflicts in the contemporary world order. 

In the two great wars of the twentieth century, the world has witnessed mass destruction not only in economic terms but taking a staggering toll on human lives, demolishing infrastructure, and ultimately resulting in food insecurity. However, the world order is unfolding towards an imbalanced multipolarity after the Cold War. It can be understood from the fact that the former rivals – the USA and Russia – collectively controlled 88 per cent of global GDP in 1950, an amount now condensed to be only 57 per cent. The current state of the international power race is characterized by increased economic integration and the dawn of China as the new economic powerhouse competing with the USA, and the mushrooming of several middle powers are jockeying for hegemony.

Since the historical technique of conventional warfare has become obsolete owing to the scale of destruction it caused, a fact supported by the ban imposed by the United Nations (U.N.) on the use of weapons of mass destruction (WMD), modern nations have started to flex on economic warfare, which is considered as nonviolent and less destructive as it eliminates the chances of mutually assured destruction (MAD). Similarly, in the olden times, the state’s security guaranteed its global supremacy, whereas in the recent era, the monetary might symbolize the power of a state. Thus, the emerging war fronts have transitioned to economic zones instead of battlefields.

The emergence of new war mechanisms is coupled with the advent of modern weapons to destabilize the economies of global competitors. The formation of the new Bretton Woods system and the creation of institutions like the IMF and the World Bank allowed them to exploit the beneficiaries through harsh lending conditions. Likewise, controlling a state’s natural resources is also used to control the weaker states. Moreover, China’s so-called debt diplomacy and the currency monopoly of the U.S. dollar enable the countries to maintain their global influence. Similarly, the obstacles placed on international trade routes and repeated sanctions and embargoes imposed by the U.S. on its rivals like China, Iran, and Russia are instruments to contain the economic growth of the contesting rivals.

The current manifestation of conflicts across the economic zones is observed in forming new economic infrastructure projects. For instance, the multi-trillion-dollar Belt and Road Initiative (BRI) is a global development strategy adopted by China to uplift the economies of the developing countries it passes through by establishing transcontinental trade routes. Being the second largest economy, China facilitates trading and boosts its allies’ economies with the intention of countering the global influence of the USA.

Consequently, the USA has adopted counter strategies to match the Chinese BRI by proposing infrastructure development projects backed by the political-economic forum Group of Seven (G7). The Bring Back Better World initiative, commonly known as B3W, supports megaprojects. In contrast, the Partnership for Global Infrastructure and Investment (PGII) contributes to developing multiple similar small- to medium-scale projects. Another advancement is the India-Middle East-Europe Economic Corridor (IMEC) project, intended to strengthen economic integration among Asia, the Persian Gulf and Europe. Such plans of action taken by the U.S. are perceived as measures providing an alternative to the China-led BRI to maintain the global balance of economic power.

In the same manner, the formation of economic blocks highlights the way states are competing for global trade shares. For instance, the European Union (E.U.) and NAFTA are two of the greatest trade blocks of the global North that promote free trade and foster investment opportunities. Subsequent arrangements and trade blocks are now emerging that empower the economies of the global South, like the BRICS+, ECO, SCO, ASEAN, etc., to provide economic coordination and ease of carrying commercial activities to the participating countries, thus maintaining global trade balance.

Another instance is the trade war between China and the U.S., propelled by conflicting economic ideologies. The capitalist U.S. has accused China of unfair trade practices, subsidizing its industries and maintaining non-tariff barriers to trade. On the other hand, communist China has accused the U.S. of protectionism and violating the World Trade Organization (WTO) rules. Although the Federal Reserve Bank of New York claimed that the US-based companies lost more than 1.7 trillion USD due to imposing tariffs on China, it fulfilled President Donald Trump’s declaration that the U.S. will use ‘all available tools’ to undermine China’s global trade dominance. However, the trade war also decelerated the Chinese economy, but ultimately, it found new trading partners that reduced its reliance on the U.S. markets.

An interesting demonstration of global conflicts along the economic zones is the control of the naval trade routes. Maritime transport is a crucial element of international trade, as approximately 80% of global merchandise is shipped via sea. The new tactic to influence the global economy is to exert dominance over the global choke points by leveraging on a state’s geo-strategic location. For example, Iran has flexed its authority to threaten to close down the Strait of Hormuz multiple times in response to the sanctions imposed by the U.S. on Iran. This poses serious hazards to global energy security, as an enormous amount of oil and natural gas passes through the bottleneck daily. Similarly, any state controlling these straits can exercise their authority to destabilize the global economic order.

Moreover, the surge in economic integration at the end of the Cold War and increased consumerism has made the states dependent on international trade. In such circumstances, imposing embargoes, sanctions, and other non-tariff barriers enables the states to wield influence at the international level by damaging the rival’s economy. For example, the oil embargo proclaimed by the oil-rich Arab nations of the Organization of Arab Petroleum Exporting Countries (OAPEC) in 1973 made the oil prices rise by almost 300 per cent, leading to an oil crisis in the U.S. that had many short-term and long-term impacts on the global economy. Similarly, the U.S. imposed sanctions on Iran in 2018 for “applying maximum economic pressure on the Iranian regime,” as quoted by former U.S. President Donald Trump. Similar sanctions were levied on other states like Russia and North Korea to isolate them in the international market and curb their economic performance.

Similarly, international organizations are also used to pressure the desired nations. For example, the Financial Action Task Force’s role in standardizing international financial practices is sometimes used against some weaker states. Also, the UN-imposed sanctions on Iran caused a big blow to its economy and receded its international political standing. Thus, such policies enable these organizations to exercise their authority and shape the economic world order in the interests of its beneficiaries.

Another manifestation is the de-dollarization campaign, which is gaining momentum as the states ditch the US-based currency and seek alternative ways to trade. Their sole motive is to dampen the influence of the U.S. in the international market by reducing reliance on the dollar as its primary reserve currency. According to IMF, the USD accounted for 59 per cent of total allocated currency reserves in the first quarter of 2023. Initially, China stepped in as the driver of de-dollarization, followed by Russia and India, and according to the Wall Street Journal, Saudi Arabia, a long-standing ally of the U.S., also intends to trade with China in Yuan. Moreover, BRICS countries have also hinted about creating a common currency to rival the U.S. dollar for international trade. Consequently, the independence from dollars will restrict the U.S. from promoting and enforcing its economic policies, thus opening new doors for conflicts in the economic corridors.

Lastly, natural resources are perceived as a weapon of influence and power as they are the backbone of a strong economy. The clash in economic zones is also a result of the superpowers competing for ownership of natural resources. China, the world’s factory floor, yields high exports in the manufacturing sector. Therefore, it has a greater energy requirement. Similarly, India, the world’s largest population of more than 1.43 billion people, is also energy deprived, and its energy consumption is growing rapidly. If the situation remains unchanged, the depletion of natural resources will bring the country’s economy to an inflexion point. Hence, every nation-state’s priority is to secure raw materials and natural resources to fulfil its needs and dampen import reliance.

Although the economic zones have become the arena for new war fronts, responsible states should take prudent measures to mitigate any chances of conflict and resolve disputes diplomatically. For instance, the lingering trade war between the U.S. and the European Union is being resolved via dialogues, and both parties have preferred to continue peaceful cooperation. Therefore, the looming threat of economic wars can be avoided by restoring bilateral negotiations, cultivating an environment of mutual trust and cooperation, and abiding by international laws. Moreover, the states should protect their domestic industries and ensure sufficient supply to fulfil their necessities.

Critically analyzing, the world has evolved into a multilateral trading system and the landscape of global markets is blurred with uncertainty and unpredictability. On the one hand, the competition has become so high; on the other hand, the need for cooperation has also accelerated manifold. In such a situation, states prefer to maximize their economic influence and strive to destabilize the rivals’ economies. One such example is the vision presented by George W Bush in the USA that promoted the idea of cutting the defence budget to boost the economy when he mentioned: “We can reap a genuine peace dividend this year and then year after year, in the form of permanently reduced defence budgets”. Thus, the presence of a strong military is no longer the primary focus of modern states; rather, they have diverted attention towards bolstering their economic development.

In a nutshell, economic zones make the new arena for competition and conflict where every state seeks to exert its influence on the global market and disrupt international supply chains. Many countries and international organizations have restored to using economic tools to establish their political influence by sabotaging the economies of weaker states to further their national interests. Thus, these measures have strained global relations, and continuing with such policies will further escalate and intensify the current economic conflicts as they carry the potential to spark a new economic cold war.

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