For years, many believe that a world of global economic networks and interdependent countries intimately connected via Supply chains and finances made War obsolete that is part of the reason Russia's invasion of Ukraine was so shocking .but the international economy itself has turned into a Battlefield of the conventional warring Ukraine has Unleashed a Swift and staggering economic conflict led by the United States and its allies against Russia and that war is being waged with new weapons forged in the post-cold war age of global Networks as much as we talk about multiple multiple politics when it comes to Global networks. there is just one superpower the United States, many Global networks have centralized economic choke points and While the U.S. Has been able to turn these Into tools of coercion, no other country can adjust to these capabilities. oligarchsBanks and even entire countries as Russia has painfully discovered it is now up to the United States to determine how to Steward this enormous power if it overreaches it might provoke a military response or create the incentive for its adversaries to create and Foster their own alternative Networks the Ukraine Ward may be a turning point will we Ends with a fragmented world economy where military and economic conflict become two sides of the same coin or will we find ways to prevent economic conflict.and stop them from spiraling into further military confrontations along with more conventional sanctions on Russian oligarchs and some Russia Goods key Russian banks have been denied access to Dollar clearing the Beating Heart of the Global Financial system they have been turned away from the Swift messaging Network which allows money to be transferred across borders in response to what Russia has threatened to disrupt the global economy by cutting off gas flows to Western Europe and banning the export of key raw materials.
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But the economic tools can be used against the West which is much less effective than the tools used against it. If Russia stops selling gas neons or fertilizers, there will be a global shortage and will have dire consequences for poor countries and poor people as food prices rise, Yet the countries that Russia is targeting will be able to withstand this transformation. and will eventually find sources elsewhere while there are substitutes for Russian nickel there's no good substitute for the U.S. Dollar and If you can't use Swift messaging and U.S.-controlled financial institutions' clear transactions in dollars, it's very difficult to pay for the things you sell.while it's hard to create sophisticated machines without semiconductors that are made with U.S. intellectual property, surprisingly other countries want to mimic America's ability to weaponize global networks. we have seen Talking about a parallel financial network led by the United States but it would be very difficult for Russia or perhaps China to build it. its own alternative Global networks unless the United States overreachesRussia now has its own Swift alternative but it really only works within Russia's borders China's cips payment system is only slightly more successful in terms of scale cips handles roughly 11 000 transactions a day almost exclusively in mainland China and Hong Kong while Swift processes around 42 million across Hong Kong's desire to become hong kong's global financial hub globally is hampered by the lockdown and the government's brutal response to democratic protests not only because the payment networks in Russia and China are three or four decades behind the others, and that they fear how they will misuse these networks if they control them.ts problems but it at least provides some legal protections to businesses in countries that have fallen afall of its harsh measures often U.S officials treat these rules as an obstacle preventing them from taking strong actions yet these restrictions provide America with a strategic Advantage they give foreign countries and businesses some reason for trust when the United States gives into the temptation to These protections were weakened when the Trump administration threatened to freeze Iraq's account with the New York Federal Reserve after it requested the withdrawal of U.S. Troops in 2020. it undermines the long-term strategic interest of the United State over each then is the more immediate threat no one expected the array of sanctions designations technology controls an asset freezes to be assembled as quickly or at such scale now there is a nearly palpable air giddiness among policy makers Every Day brings new restrictions that build on one another European officials have news that they might use this new form of economic Warfare to bring down Mr Putin's regime or provoke the collapse of the Russian economy these statements were hastily clarified but they Illustrated deeper Danger as a new book by the historian Nicholas Mulder emphasizes the economic weapon of sanctions and blockades doesn't work nearly As much as its supporters expect or effectively imagine that stronger sanctions will lead to greater danger that they will lead to an unexpected reaction as Mr. Mulder shows fear The sanctions helped further Nazi Germany's territorial ambitions at a time when Iran was feeling badly constricted by sanctions when it was accused of attacking shipping through the Strait of Hormuz. a key choke point in the global energy economy the closer Mr. Putin's regime comes to collapse the more likely that it will lash out this doesn't mean that The United States and its allies should stop using their control over global economic networks as a weapon, one of the few ways it can use it responsibly against nuclear power. in an unprovoked war, However, their measures should be strict enough to reach specific goals to protect Ukraine's independence and to limit Russia to the maximum extent possible. aggressive gains the minimum to the minimum to reassure other countries and avoidvescalation to emphasize that the measures are not intended to provoke regime change in Russia America may also need to adjust and recalibrate sanctions to contain economic Fallout and unexpected consequences for allies as it did in 2018 when U.S sanctions against Oleg deripaska threatened to disrupot Aluminum.supply chains in Europe similar adjustments should aim to prevent wide-scale human suffering in Russia and else where negative economics restrictions have to be bal;anced by posiotive economic aid tio countries at risk of hunger the united States also explicity lay out the circumstances under which the executive branch will apply such economic measures the range of permissioble goals that they can accomplish the review procedures that will ensure they are proportionate and the circumstances under whjich they will apply such economic measures the range of permisible goals that they can accomplish the review procedures that will ensure they are proportionate and the circumstances under which they will be withdraw.these commitments will help minimize the very real risk that Future economic conflicts would become violent when many thought that an interdependent world economy prevented war, but it would be really bitter if it provoked war instead.