New War Fronts Lie in Economic Zones

Outline
1. Introduction
2. A bird eye view on the evolution of modes of war
3. What are some indicators that prove that new war fronts lie in economic zones
3.1. The US-China trade war
3.2. Strict sanctions on Iran for its nuclear ambitions
3.3. Crippling trade embargoes on North Korea
3.4. Politicization of financial Action Task Force (FATF) by the United States and its allies
3.5. Political maneuvering of International Monetary Fund (IMF) and the World Bank for
foreign policy gains

4. Causes of shift from armed conflicts to economic warfare

4.1. The heavy human and economic cost of armed conflicts
4.2. The long-lasting nature of war in the battleground
4.3. Armed conflict embroils other countries into confrontation, thus, increases the scope of
the war.

5. Recommendations to prevent economic warfare

5.1. De-politicization of international financial institutions.
5.2. Stronger role of the United Nations

6. Conclusion

Written by Sualeh Chandio

 The rapid rise of globalization has inextricably interwoven states with each other. The
intricate nature of modern economies has significantly changed the mode of war from
battlegrounds to trade. Since armed conflicts are devastating for not only humans but for the
environment and economies as well, the use of economic sanctions provides the least harmful
and relatively easy approach to influence other country’s behaviors. Economic warfare can be
defined as the use of, or the threat to use, economic means against a country to weaken its
economy and thereby reduce its political and military power. The effectiveness of economic
warfare has compelled the big economic powers to deviate from the traditional approach of war
which is costly and time-consuming. Take, for instance, the US-China trade war where there was
no tangible battleground, but the whole world felt the heat of the war. Both countries, during the
peak of the trade war, imposed heavy tariffs on each other’s goods to discourage domestic
consumers. Additionally, the U.S. forced Iran and North Korea to abandon their nuclear
ambitions. To that end, Washington imposed crippling sanctions on both countries. In addition to
direct economic sanctions, big economic giants use international financial institutions, such as
International Monetary Fund (IMF), Financial Action Task Force (FATF) and The World Bank,
for their foreign policy gains. Because of its effectiveness and quick results without drawing
much international attention, economic warfare has considerably changed the approach to war.

A mild thought would infer that the modes of war have mutated throughout the history of
mankind. Wars until the 20th century were fought on battlegrounds, using at first swords, then
guns, tanks, artillery and so on. However, two catastrophic world wars, which killed millions
around the world and almost pushed humanity into the stone age, taught the international
community that unleashing the monster of war does not benefit anyone. Fast forward to the
current times, economic warfare has become a prominent lever of power in the international
arena of political gambling. The relative ease and potency of economic warfare have made it the
most useful tool in the foreign policy arsenal. It erodes enemy’s economic power which
eventually weakens its military and undermines its sovereignty. Thus, it is clear to state that the
modes of war have undergone changes with the passage of time.

Written by Sualeh Chandio

 The United States for settling some political scores with China went for the trade war instead
of a face-to-face confrontation with the latter. The staggering rise of the Chinese economy
ruffled some feathers in Washington particularly when a Chines company, Huawei, wanted to
build 5G technology in the United States. The U.S. fearing that China could exploit this
technology in the feature banned Huawei and imposed heavy tariffs on Chines goods. The
United States imposed USD 36 billion worth of tariffs on the Chines goods as the first round of
attack. As China retaliated, the trade war became more intense. Global supply chains and stock
markets plunged since both China and the U.S. are the world’s most lucrative markets. Although
the U.S. was not able to achieve its intended goal, it did prompt some concession from China
without opting for any physical war. Therefore, this economic warfare between both countries
indicates the shift from the traditional approach towards war.

Crippling sanctions on Iran by the U.S. for its nuclear ambitions is another prominent
example of economic warfare. The deadly eight-year (1980-88) war between Iran and Iraq had
taught the former that it needs nuclear deterrence for the protection of its sovereignty. Thus, Iran
started building centrifuges for nuclear fuel. However, the U.S. did not endorse this move and
barred its allies from any trade with Iran. Also, the U.S. cut off Iran and its banking system from
the international financial system. Consequently, Iran’s economy deteriorated. Unable to cope
with the pressure, Iran decided to step back from its nuclear program, and in return, the U.S. lift
the sanctions. Although the deal did not last long, economic sanctions compelled Iran for a
concession with Washington. Thus, it is clear to conclude that economic sanctions on Iran did
help the U.S. to achieve its foreign policy goal.

Additionally, the U.S. imposed trade embargoes on North Korea for its nuclear weapons
development. No country has reaped the benefits of economic warfare more than the U.S. due to
its currency domination and influence over the global financial system. In addition to Iran, North
Korea has also been a victim of the U.S. trade embargoes. Due to rigorous nuclear testing and
North Korea’s aspiration to join the nuclear umbrella coupled with its alleged human rights
violations, Washington, together with the United Nations, imposed military and various other
economic sanctions on North Korea in 2006. Although the U.S. was not able to stop North Korea
from developing nuclear weapons, it has isolated Pyongyang from much of the world. Hence, it

Written by Sualeh Chandio

is evident that instead of opting a war with North Korea, the United States choose economic
warfare for achieving its objectives.

Aside from direct sanctions, the U.S. and its allies have also politicized Financial Action
Task Force (FATF) to advance their interests in the world. As the Cold war was sighing its last
breaths, FATF was created to develop and promote policies to protect the global financial system
against money laundering and terror financing. Unfortunately, it was soon polarized by the
Western bloc for solely their interests and hurled FATF away from its mandate. According to the
Royal United Services Institute (RUSI), the world’s oldest think-tank on security and defense,
FATF is highly politicized by some powers to abuse weak countries. For instance, Pakistan was
green-listed by FATF in 2018; despite Pakistan’s sincere efforts to implement FATF’s
recommended points, it still languish in the green list due to the pressure from the U.S. and India.
Hence, it is wise to conclude that the U.S. and its allies have polarized FATF for their narrow
foreign policy goals.

In Addition to FATF, the International Monetary Fund (IMF), and the World Bank has also
been used for political maneuvering of the U.S. As a new boss of the capitalist system, the U.S.
established the IMF and the World Bank to maintain financial stability and promote high
employment among its other goals. Currently, most of the decisions at the IMF and the world
bank are influence by the U.S. Instead of basing voting rights on population, which would have
been the true democratic approach, IMF and The World Bank gave veto and greater power to the
USA since it has the largest economic commitment to these financial institutions. Both
institutions have been used against, Venezuela, Iran, North Korea and many others who went
against the wishes of the West. Thus, it is evident that these international institutions have been
used as a weapon of economic warfare against the so-called ‘rogue nations.’

The shift from the traditional mode of war is because of many reasons and chief among them
is the heavy human and economic cost of a war in the battleground. The history of homo sapiens
is replete with countless wars and conflicts. All these wars were fought on battlegrounds with
weapons draining the blood of millions. With the industrial revolution in 1760, advancements in
weapons made war even deadlier. The two devastating world wars, first in 1914 and again in
1939, are prominent examples of these deadlier wars. This mode of war destroyed many empires
and even civilizations due to their unbearable economic and human cost. Finally, after a long and

Written by Sualeh Chandio

bloody road, the modern human realized that war should be the last resort to seek for the
settlement of a dispute. As a result, 21st century gave rise to the concept of economic warfare.

Moreover, long-lasting nature of armed conflict has made it redundant in the modern
world dominated by democratic principles. Long-lasting nature of war can be best described by
the Thirty-Year war in Europe between Catholics and Protestants. What started as a chiefly
religious and to some extent as political war, lasted for thirty years and wiped out nearly half of
the Europe’s population. Another suitable example would be the World War II, which Hitler
thought would be finalized within a year, but to his surprise, continued for four years. Therefore,
considering today’s modern world influenced by democracy, armed conflict has become
redundant by the establishment of international organizations for dispute resolution.

Lastly, armed conflict embroils other countries into confrontation, thus, increase the scope of
the war. War cannot be controlled for a long period of time; it spreads like a plague no matter
how much people control it. World War I itself is the product of this very nature of the war. It
started when a Serbian nationalist killed Archduke Franz Ferdinand, as a result, Austria-Hungary
declared war on Serbia. Because Serbia was a protégé of the Union of Soviet Socialist Republics
(USSR), seeing Austria-Hungary mobilizing, USSR came for Serbia’s defense. Within a week
Great Britain, France, Belgium all declared war on Austria-Hungary. This happened due to
various alliances between these countries. The same domino effect was also witnessed in World
War II. Therefore, the highly contagious nature of armed conflict has made it almost obsolete in
the 21st century.

Although economic warfare is prevalent in present times, depoliticization of the

international financial institutions can stop this invisible enemy from exploiting vulnerable
countries. The first step toward the prevention of economic war should be the liberations of IMF,
FATF and The World Bank from the influence of the U.S. and its allies. The use of these
institutions might serve the U.S. interests, but this will undermine the broader democratic
principles in the long run. All major states should unite and make some mandatory reforms in
these institutions, starting from giving all members an equal say in the policy-making. Even the
U.S. would not be able to resist if the international community pledges for necessary reforms and
raise voice for the de-polarization of the global financial system and its guarantors. Thus, to stop

Written by Sualeh Chandio

further exploitation of weak nations through economic sanctions it is necessary to implement the
much-needed institutional reforms.

At last, a stronger role of the United Nations is also essential to keep economic war at bay.
The United Nations (UN) was established in 1945, with the purpose to secure international peace
and order. Certainly, the economic war is a threat to international peace and stability, thus, it
calls for an active role from the UN. Without the role of the UN, even reforms in the
international financial institutions would be much more difficult. It is the only institution that can
hold hegemonic powers accountable for their undeclared economic war on financially unstable
countries, such as Iran, Venezuela, North Korea and Pakistan. Hence, the UN should play a
stronger role and ensure that threats to international peace in all forms should be tackled with the
full severity of the law.

To conclude, economic sanctions and trade embargoes against various countries are vivid
proofs of this modern form of war. Therefore, it has been established that new war fronts lie in
economic zones. Just like a war in the battleground, economic warfare is also a threat to
international stability. Global players should not ignore this problem; they must push the main
culprits to abstain from their illegitimate actions. By implementing necessary reforms in the
International financial institutions and with a stronger role of the UN, economic warfare can be
stopped from destroying nations. Humanity has crossed a long bloody road to reach the current
stage of relative stability and dominance of international law. With cooperation and concessions,
global actors can make this world a better place to live.

Written by Sualeh Chandio