Of waning certainties and rising risks: CoE experts delineate economic trends and hybrid threat activities

As global power dynamics shift and new technologies develop apace, new hybrid threats emerge alongside them. The global economy is interconnected on an unprecedented scale. At the same time, authoritarian regimes increasingly challenge the rules and principles of global governance. Hence, for the first time, the European Centre of Excellence for Countering Hybrid Threats has dedicated a comprehensive Trend Report to economic threat potentials.

New frontiers for hybrid aggression

“What we can clearly observe is increased target practice. Hybrid threat actors, such as Russia or China, resort ever more to the economic domain,” explained Hybrid CoE Senior Analyst Ragnar Ingibergsson,who has co-authored the report with his colleague Jukka Aukia. The authors argue for readjusted policy responses in the economic realm, calling for economic policies and national security strategies to proceed in lockstep. To this end, the report lists an array of examples on which policymakers should focus their attention.

As malign actors are searching for vulnerabilities in democracies worldwide, the authors observe that economic coercion is intensifying. “Economic hybrid threats are part and parcel of authoritarian strategies. Ultimately, they are a cost-effective tool to promote a political ideology. To achieve their ends, authoritarians will not stop short of inflicting harm – if they perceive the cost to be calculable,” Mr Ingibergsson stated. “Above all, this is a pragmatic choice, which is geared towards avoiding political accountability for aggressive actions.”

From economic coercion to weaponized resources

In the field of economic coercion, the report focuses on China’s posture, which – alongside its economic leverage – is in flux and becoming more confrontational: “As a global trade heavyweight, we can expect China to take centre stage as an economic hybrid threat actor. China will continue to leverage its economic threat potential to further its own strategic agenda – a scenario for which we will need to prepare ourselves,” Mr Ingibergsson added. 

Examples of hybrid aggression listed in the report range from deliberate attempts to manipulate supply chains for production, and attacks on critical infrastructure, to the weaponization of crucial resources. “Russian President Putin, for instance, has demonstrated his resolve to leverage whatever tool is at his disposal to create global divisions, be it the supply of grain or gas,” said Mr Ingibergsson, pointing to another example of economic hybrid activity in the report.

“To weather the multiple storm fronts in the economic realm, policymakers must reinvigorate fair, transparent, and rules-based economic principles. When it comes to authoritarian regimes, insisting on reciprocity is key. Ultimately, the costs of coordinated responses to risks will be cheaper than inaction. However, they will be reflected in global markets,” Mr Ingibergsson noted.

To avoid bloc-building – a scenario which the authors say they cannot rule out in view of the zero-sum thinking of some authoritarian regimes – policymakers in market-based democracies should pivot towards emerging markets. At the same time, they should show clear initiative in working towards fair and universal access to critical resources, and in preparing their societies more effectively, by linking the public and private sectors as closely as possible.

The full report can be downloaded here: https://www.hybridcoe.fi/publications/hybrid-coe-trend-report-10-threat-potential-in-the-economy-from-vulnerabilities-to-chinas-increased-coercion/

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