Written by: Sanchaly
Over the recent years, geopolitics and geo-economics have become two prominent concepts in diplomacy. Taking India’s example as an emerging economy, it has started to play a crucial role in global affairs. India’s maneuvers sharply highlighted India’s geopolitical ambitions over the Indo-Pacific. However, India’s reluctance to enter economic partnerships such as RCEP, put a question mark on India’s thrive for geo-economics.
Meaning of Geopolitics
‘Geopolitics’ means the politics of gaining control over the geographical entities. Simply put, when power equation and foreign policy are determined by geographical factors and territorial alignment, geopolitics is considered an important influencer. Under the domain of geopolitics, political scholars often analyze the geographic influence on international affairs. Swedish political scientist Rudolf Kjellen first time coined the terms during the 20th century.
The massive advancement in connectivity in terms of rail, roads, airplanes, and sea routes has opened the platform to interact with large-scale geographical partners. However, geopolitics has the embedded security concern of threatening territorial sovereignty. According to the notion of realism, the balance of power (BoP) would always act to stabilize the potential geopolitical instability. For instance, the US-India strategic partnership is one of the notable agreements between the two nations. But the question is did the US, after the 90s start to cooperate with India to deal with China’s rising threat? The answer lies in India’s geographical proximity to China, which allows India to take very swift action in any exceptional circumstances.
The debate on geopolitical aspects of global affairs started with a historical analysis by Alfred T. Mahan. Mahan argued that “controlling the sea routes is the key to controlling the world” because of the superior mobility of trade vessels and the strategic significance of the ocean chokepoints. While Mahan gave the example of colonial success by controlling the sea channels, another thinker Mackinder argued that the “future power would be from the land power”. The Heartland and Rimland theory of Mackinder soon got popularized in the international intellectual community. This debate to date remains the center of discussion in the domain of geopolitics.
Definition of Geo-economics
Geo-economics is a newly invented term, but not an isolated one. There is no exact definition of geo-economics. However, geo-economics can be considered the study of resources, and other macroeconomic trends through the lens of international affairs. Geopolitical risks and potential cannot be ignored when a firm needs to decide on expanding to other regions of the world. Additionally, geopolitical volatility acts as the main driving force of markets. Taking the example of the Russia-Ukraine war, the inflation of the essentials especially, wheat has become a permanent feature in the international market.
As the world becomes more interconnected and the production norms become globalized, the economics of one country, today, is dependent on the others. The example of the 2008 global financial crisis would be ideal to mention here. There is no authoritative definition of geo-economics, but the theoretical principle of geo-economics can be traced back to the neoclassic. Robert D. Blackwill in the book ‘War by Other Means’ mentioned that Geo-economics is a tactic to defend national interest by using economic instruments, especially, international trade. In the theories of international relations, the liberalism school preached the importance of interconnected trade and commerce. Hence, many scholars advocated that Geo-economics is a positive concept to suppress military power and betterment collectively.
However, in recent years, the use of geo-economics as a weapon has increased significantly to embarrass adversaries. There is an intense debate about whether economic sanctions should be used in foreign policy. The state apparatus often supports the high level of risk research to develop domestic commercial entities and to oppose foreign commercial interests. Geopolitical action can negate the country’s military strength, but economic sanctions can impact millions of lives of civilians.
The interplay between geopolitics and geo-economics
In the contemporary scenario, geopolitics terms are often used interchangeably with international politics. However, there is a literal difference between the two. Geopolitics denotes only the factors related to the geographical domain such as location, climate, natural resources, availability of crucial products, and many others, whereas international politics is a much wider corpus and is a zone of the interplay among many factors apart from the geographical factors. Furthermore, the concept of geographical influence also seems to be weakened after the globalized expansion of trade, communication, and transportation. In today’s world, people are no longer bound by geographical obscurity. The increasing industrial capabilities and their global expansion, enhancing the scope of people-to-people exchange have facilitated the networking of civil society, diminishing the role of geopolitics significantly.
The same phenomena of globalization have strengthened the interdependence among the countries even with adverse relations. The regulators of financial markets also include geopolitical trends. Investors, before investing thoroughly research the risk and potential of the investment. One thing that is distinct between geo-economics and geopolitics is that political scholars are different in analyzing the ongoing scenario. Political scholars are more prone to develop a narrative, whereas economists prefer the application of the quantitative method to evaluate the profit and loss of expansion.
The quantification of the risks can give a clearer picture of the future risk management process. Businesses are now globally vulnerable more than ever. Globalization, on the one hand, gives them a readily available market, but, on the other hand, the diverse risk factors make the businesses more exposed to different kinds of possibilities. Therefore, geopolitics cannot be separated from geo-economics. There is a visible impact of the geopolitical trends on the economy and markets and the interplay between the two shapes majorly, the decision-making of the countries.
The dichotomy between geopolitics and geo-economics in making India’s foreign policy.
India’s foreign policy is an interesting one to understand the interdependence between Geopolitics and Geo-economics in decision-making. Indian position on geo-economic challenges such as climate change, trade, and industrial policy is sharply different from the geopolitical challenges which are also much older in the Indian context. India’s default geopolitical challenges from the two immediate neighbors, especially China’s successive geopolitical aggression compelled India’s foreign policy to strengthen the partnership with the West concerning defense and security-related agreements. However, India’s economic interests continue to be in the middle of the North-South divide.
China’s stand-off in Galwan Valley since 2021 is a prominent geopolitical challenge for India, but both countries have strong convergent mutual economic interests and thus many scholars pointed out the situation is not out of control yet. There is a clear dichotomy between India’s geo-economics and geopolitics interest in the agenda of the East Asian Quad and the West Asian Quad. China’s unprecedented assertiveness defined the agenda of the East Asian Quad, whereas trade, commerce, and technology determined the functioning of the West Asian Quad.
To secure its geo-economic interest, India is now more active in negotiating the Free Trade Agreements (FTAs) bilaterally as well as with regional forums like the European Union. However, one can question India’s withdrawal from the Regional Comprehensive Economic Partnership (RCEP) is India’s lack of political will to open the market for profitable trade. Though RCEP would impact regional trade positively in India’s favor, it can hit the domestic market of India at its worst. In this context, the excessive pushing for geo-economic interests in foreign policy decision-making can be detrimental and can create geopolitical issues.
Way forward
The balancing of geopolitical interests with geo-economic interests can be the best possible solution for making foreign policy sound and approachable. The need of the hour is the greater coordination between external affairs and commerce ministries. The favorable condition for India’s economic interests and geopolitical challenges needs to be seen in common ground to resolve the issue with dialogues.
The opinions expressed and suggestions made in the article belong solely to the author. Diplomania and O.P. Jindal Global University do not endorse the same
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