4. Economic war IEP Rennes – AEP-CEP Program 2013-2014
Introduction • «War is the continuation of Politik by other means» - Carl von CLAUSEWITZ, On War, 1832. • 1989 : « The end of the Cold War is the final victory of Democracy and the end of political conflicts » ? The End of History and the Last Man, Francis FUKUYAMA, 1992.
• 2013 : is war the continuation of Economic by other means ? • Problem: what are the new conflicts of globalization ?
Course Plan I. Economic wars A. Conflicts for ressources B. Conflicts for markets
II. New political wars ? A. Innovation wars B. Intelligence wars
III. New international relations ? A. The privatization of war B. The rise of Soft power
Conclusion
I. Economic wars A. Conflicts for ressources • The new issue : ressources – 2050 : 9 billions people – Globalization: westernization of ways of life (car, diet meat)
• Conflicts for ressources ? • Energy • Food • Water
Conflicts for energy ressources • Offshore fields : – Malvinas/Falklands : conflicts between the UK and Argentina – Exclusive Economic Zone (EEZ) difficult to draw (200 miles zone)
South-China Sea conflict • Chinese ambitions – Paracels and Spratleys archipelago – 6 countries : China, Vietnam, Malaysia, Philippines, Brunei, Indonesia. – EEZ : how to draw the 200 n.miles EEZ?
• Main issues – Oil offshore : billions USD according to China – Fishing ressources – Manganese nodules on the sea bottom
Conflicts for food Forces involved into Cod Wars
• Fishing wars for EEZ – Cod war : conflict between the Royal Navy and Iceland in the 1950s and the 1970s.
• Fishing wars because of fishing quotas – Conflits between European fishers : • « War anchovy » between Spainish and French fishers • « war herring » in Feroe Islands
Iceland -
2 large patrol vessels 6 small patrol vessels
UK -
28 destroyers 32 frigates 1 Fast Minelayer 1 Minesweeper 10 RFA Supply vessels
Competition for food • Land grabbing – Goal : secure food supplies – Main buyers : • Gulf States (Saudi Arabia, Emirates) • East Asia (China, South-Korea) • Private groups (Daewoo in Siberia)
– Main sellers : Sub-saharan countries, Russia, Australia… « There is no grabbing, just investment » Minister of Economy of Burkina Faso.
Course Plan I. Economic wars A. Conflicts for ressources B. Conflicts for markets
II. New political wars ? A. Innovation wars B. Intelligence wars
III. New international relations ? A. The privatization of war B. The rise of Soft power
Conclusion
I. Economic wars A. Conflicts for markets • Issues : – protecting national markets – Acces to foreign markets
• How to protect national markets ? – National standards (ex. rail-size in Spain) – Custom fees – Subsidies
• How to access new markets ? – ODA – Export subsidies
How to protect the agricultural market? • Subsidies for agricultural sector – CAP (Common Agricultural Policy) in Europe : first budget of EU. – US farm subsidies : around 20 billion USD/year in direct subsidies : « farm income stabilization ».
• The banana dispute – Liberalization of Banana market by the WTO in the 1990s – EU : keep protecting bananas from overseas territories (Martinique, Guadeloupe) – US : sanctions on EU exports (custom fees)
How to protect the aviation market • The US dispute against Concorde – Supersonic passenger airliner (cruise speed : Mach 2.02, 2158 km/h) – Anglo-French project. – Overflight forbidden in the US because of… pollution and noise
• The US Defence and Boeing – 2008 : 35 billions contract to Airbus… Canceled and awarded to Boeing.
How to access new foreign markets ? • ODA – Development aid – Ex. ODA loans are conditioned to the use of French technologies (partially). – Ex. Hanoi metro: French engineering (Systra) and French materials (Alstom).
• Export subsidies – Ex. BPIFrance or Ubifrance for helping SMB to export – COFACE
Sovereign funds for entering new markets • QIA in France – 85 billions USD – Invests in French economy • Aviation (6% of EADS) • Communications (TV, press) • Sports (PSG, handball, horseracing) • Tourism (hostels) • Environment (Veolia 5%)
• For what purpose ? See : SWF global ranks
Course Plan I. Economic wars A. Conflicts for ressources B. Conflicts for markets
II. New political wars ? A. Innovation wars B. Intelligence wars
III. New international relations ? A. The privatization of war B. The rise of Soft power
Conclusion
II. New political wars A. Innovation wars • Why innovation is so strategic ? – Cf. POSNER, international trade is based partially on innovation – Techological gap : trade from innovative countries to less innovative countries
Patent war • Issue : whose innovation ? • Samsung/Apple war – American justice : Samsung should pay an almost 1 billion fine – Korean justice (normally) : Apple should pay a fine too… – 1 mobile phone : almost 1000 patents
University competition • Academic ranking of World Universities • Promotes : – English speaking countries (scientifical publications in Nature and Sciences) – Richest universities (Harvard : 35 billions, Paris 6 : 400 millions )
Consequence : brain drain
Course Plan I. Economic wars A. Conflicts for ressources B. Conflicts for markets
II. New political wars ? A. Innovation wars B. Intelligence wars
III. New international relations ? A. The privatization of war B. The rise of Soft power
Conclusion
II. New political wars ? B. Intelligence wars • Issue : acces to information – Human intelligence – Electronic intelligence : NSA (PRISM), Echelon program – Military intelligence : special forces
• Economical intelligence – Embassy network – Trade Office
Course Plan I. Economic wars A. Conflicts for ressources B. Conflicts for markets
II. New political wars ? A. Innovation wars B. Intelligence wars
III. New international relations ? A. The privatization of war B. The rise of Soft power
Conclusion
III. New international relations ? A. The privatization of war • Private security – PMC – private military companies – Second military corp in Irak
• Private diplomacy – Non-governmental diplomacy by NGO (before G20…) – Private lobbys : ex. European commission in Brussels…
Course Plan I. Economic wars A. Conflicts for ressources B. Conflicts for markets
II. New political wars ? A. Innovation wars B. Intelligence wars
III. New international relations ? A. The privatization of war B. The rise of Soft power
Conclusion
III. New international relations ? B. The rise of Soft power • Soft power vs Hard Power – Joseph NYE – Political influence is possible with culture (Hollywood movies, K-pop).
• Difference between American and European power – Cf. Robert KAGAN – American : realistic view of IR (conflict). – European : idealistic view of IR (cooperation)
Asymmetric warfare • Symmetric warfare : – two powers with similar military power. Ex. Cold war.
• Assymetric warfare : – A weak actor against a superpower (ex. Vietnam vs US : guerrilla) – Power can be hijacked by a weaker opponent (ex. Twin Tower attack by 19 terrorist with a razor.
=> Unconventional warfare
Conclusion
Conclusion • Initial problem : what are the new conflicts of globalization ? • IR are dominated by economics & consequently… competition (soft conflicts ?) • Competition for : – Ressources – Territories (land, EEZ) – Information/innovation
• Increasing role of Soft Power… But Hard power is still the most important : the international security system is based on nuclear deterrence
Ile Longue (Brest, Brittany) French nuclear submarine base
Carl von Clausewitz (1780-1831) • Prussian general – Napoleonic wars
• Main work : On war – Unfinished, published in 1832 (after his death) – One of the most important treaty on strategy
• « War is the continuation of Politik by other means » – War : a political act + a political instrument
Main SWF – Sovereign Wealth funds Norway Country
GPF Acronym
Saudi NorwayArabia
SAMA GPF
United Arab Emirates ADIA Saudi Arabia SAMA Abu Dhabi United Arab Emirates ADIA China CIC Abu Dhabi China China
CIC SAFE
China Kuwait
SAFE KIA
Kuwait Hong Kong
KIA HKMA
Hong Kong
HKMA
Singapore
GIC
Singapore
GIC
Singapore Singapore China Qatar
TH TH NSSF QIA
Qatar
QIA
Government SWF Pension 70027852000000000 Fund (in billion Fund - Global 00785.2USD) SAMA Government Foreign Pension 70026759000000000 785.2 Holdings 00675.9 Fund - Global Abu Dhabi 70026270000000000 SAMA Foreign Holdings 675.9 Investment Authority Abu Dhabi Investment 00627 627 China Investment 70025752000000000 Authority Corporation China Investment 00575.2 575.2 SAFE Investment 70025679000000000 Corporation Company SAFE Investment 00567.9** 567.9 Kuwait Investment 70023860000000000 Company Authority Kuwait Investment 00386 386 Hong Kong Monetary 70023267000000000 Authority Authority Hong KongInvestment Monetary 00326.7 326.7 Portfolio Authority Investment Government of 70022850000000000 Portfolio Singapore 00285 Government of 285 Investment Singapore Investment Corporation Corporation Temasek Holdings 70021733000000000 Temasek Holdings 173.3 [9] National Social Security 00173.3 160.6 Qatar Investment 70021150000000000 Fund Authority Qatar Investment 00115 115
1990 Birthfoundation
Oil
n/a 1990
Oil Oil
1976 n/a 1976 2007
Oil Oil Oil Non-commodity
2007 1997
Non-commodity Non-commodity
1997 1953
Non-commodity Oil
1953 1993
Oil Non-commodity
1993
Non-commodity
1981
Non-commodity
1981
Non-commodity
1974 1974 2000 2003
Non-commodity Non-commodity Non-commodity Oil
2003
Oil
Authority Source : Wikipedia
Sector
