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Warfare by many means

Economic warfare
COMPETITION / The weapons are sanctions, subsidies, dumping, hostile takeovers and theft of industrial secrets. The goal is simple: to weaken a country's economy so that it cannot offer political, economic or military resistance.


Many times I think that today's young people have an impossible task ahead of them when they have to interpret the world. Reality was complicated enough when I was young. But when I reflect on everything that has happened of historical importance on the world stage in the last 30 years, I wonder if all this must not seem quite overwhelming. How are you going to fit all of this into the history and social studies classes? It is extra complicated today that everyone is both friends and enemies. All countries have an interest in trade and intercourse, while at the same time competing for influence, positions and resources. And many times with crude methods.

Our times are therefore characterized by a form of warfare with many means. Not only do we see war in Europe, throughout Russias shameless invasion of Ukraine. We are also in the midst of an economic war: the weapons are sanctions, subsidies, dumping, hostile takeovers and the theft of industrial secrets. The aim is simple: to weaken a country's economy so that it cannot offer political, economic or military resistance.

National security interests

A recent book deals with the driving forces behind this war. Important keywords here are Trump, Brexit, corona and China's economic growth. The book describes how the battles are fought, and which methods and tools are used.

Author Kåre Dahl Martinsen is professor of European security policy at the Norwegian Defense Academy. He has a doctorate in political science and has, among other things, researched European cooperation before and after the fall of the wall. Economic warfare is interesting and very relevant – it is easy to read, at just under 160 pages plus bibliography. The author covers many areas and touches on hostile takeovers, monopolies as weapons, targeted dumping, theft of know-how, industrial espionage and brain drain, just to name a few. Those who want to update themselves on trade and great power politics since the 1980s therefore have some good hours of reading ahead of them. And an active sanctions policy seems to be working, even if countermeasures dampen the effect in the long term.

And all of this is also very relevant in a Norwegian context. On 23 March 2021, then Minister of Justice Monica Mæland entered the history books. From the floor of the Storting, she announced that the government was going to stop the sale of engine manufacturer Bergen Engines to Russian-owned TMH International. The sale had caused a great deal of attention as the factory supplies engines to several Norwegian and allied naval vessels. Could it entail a risk to national security interests?

South Africa managed through all the years of sanctions.

Yes, said the minister. Never before has the Security Act been used to stop the takeover of a company. And it had all started as a normal news item, that Rolls-Royce had sold Norway's only manufacturer of marine engines, a cornerstone company with 650 employees. Now it was more like a spy thriller and turned into a big political drama. Only a month before the trade was halted, the government stated that it considered this "something the ministry should not or should not interfere with". Defense Minister Frank Bakke-Jensen warned against calling wolf. But he eventually had to admit that Norwegian politicians had been far too naive here.

Tjeerd Royaards (Netherlands) – more sanctions

Sanctions – and China

That trade leads to fred, is an old maxim in European history, and the philosopher Kant stood for that line. Now his old homeland, Germany, is biting its lip and swallowing old pride. Germany is now more and more willing to let politics guide trade, and not the other way around.

During a meeting with President Jimmy Carter in the 1980s, there Carter tried to pressure the Germans to join an economic punitive response after the Soviet invasion of Afghanistan, then-Chancellor Helmut Schmidt replied that "countries that trade with each other do not shoot at each other". Seen from his point of view, the imports contributed to West Germany's security. The difference between the USA and West Germany could hardly be greater.

This applies not least in the relationship with China. The European, and the German, politics today now mirror the American one, which took place before the EU's, writes Dahl Martinsen. The fact that the US and the EU, which previously failed to agree on a trade agreement, now seem to share the same view of what China is doing is important.

The irony is that China itself has never hidden what it wants to achieve with its foreign trade. The official view is that doing business with China is a win-win for both parties. But in various economic strategy plans it is clear that they want to gain political influence in several countries, writes Dahl Martinsen. The fact that the EU has taken a long time to realize this is connected to the prospect of large revenues on the Chinese market, and a lack of agreement on whether China was a partner or a threat, the author claims.

Perhaps it took a corona pandemic for the West to understand how dependent they were on it China with regard to various goods, both of a strategic nature and of ordinary everyday goods. This also contributed to an increased skepticism towards economic globalisation. Now Europeans began to debate the fact that free trade moved jobs to low-cost countries, and that closer economic contact with China came with political strings attached. All this contributed to increased vulnerability. And in the worst case to political instability.

Dahl Martinsen visits most things in the trade field. And this is surprisingly exciting material. The way China is gaining influence in the world is worth knowing more about. They buy up ports and other infrastructure, not only in Africa and Asia, but also in Latin America and Europe. The port of Piraeus in Greece is now in Chinese hands. But here the EU, and perhaps Germany in particular, only has itself to thank? The Germans were tough, on behalf of the EU, when Greece had to undergo a severe economic restructuring a few years ago. Then believe China to...

According to Dahl Martinsen, the acquisition of companies from foreign players can lead to a loss of control over a number of supply lines, and that one's own industrial development suffers as a result. The manner in which the Chinese state has proceeded is questionable, with regard to both good business practice and international rules.

Do sanctions work?

Sanctions are increasingly used in international politics, writes Dahl Martinsen in one of the book's most interesting chapters. In the wake of the invasion of Ukraine, this tool has increased explosively. But the author gives no simple answers to whether sanctions works or not. South Africa managed through all the years of sanctions, although this also affected the apartheid regime. Iran is not giving in, despite international sanctions, and neither is North Korea. Both states find trade loopholes, via both legal and illegal channels.

New procedures within the EU have meant that sanctions can be introduced more quickly, and that they are easier to implement. The annexation of Crimea and the occupation of eastern Ukraine was the trigger. The Norwegian Sanctions Act has also been revised. Sanctions can now also be directed at individuals.

But the experiences from the Iraq war in the early 2000s show that the extensive sanctions that were then adopted by the West led to a lot of suffering and death for ordinary people, not least because medicine supplies were also boycotted. Sanctions turned out to hit like a war. One result of this is that exceptions are now made for medicines when sanctions are adopted.

Medical equipment, on the other hand, is in a gray area; basically there is an opening for it to be sold. At the same time, writes Dahl Martinsen, there is a danger that technological components in, for example, a dialysis machine can be picked out and used militarily. Russian defense industry has supposedly started picking the semiconductors they need, out of refrigerators and dishwashers, among other things. War leads to both innovation and reuse.

But the Russian press has reported on empty shelves in pharmacies. hamstring, which we also saw a rise in here at home during the corona pandemic, is a reason. Another is that the international payment system is rigged so that Western systems, with trade in Western currency and transfer arrangements, such as SWIFT, lead to payment problems. In any case, both the war and perhaps also sanctions have led to a massive brain drain from Russia.

The current sanctions against Russia are working.

I therefore interpret the author to mean that the current sanctions against Russia are working. Dahl Martinsen refers to Tormod Tingstad, former director of the Norwegian fertilizer company Yara, who has said in an interview that Norwegian companies previously worked deliberately to find loopholes. They don't now.

Although major countries such as China, India, South Africa and Brazil are not part of the sanctions against Russia, other countries, which traditionally avoid taking sides, such as South Korea, Singapore and Taiwan, have joined the punitive measures.

But what happens if China follows Russia and invades disputed islands, or Taiwan? China itself has pushed ahead with its plans to become more self-sufficient in most things.

The author also writes that the EU's threats of financial sanctions against anti-democratic decisions in countries such as Hungary, Slovakia and Poland have also had some effect.

Andrew P. Kroglund
Andrew P. Kroglund
Kroglund is a critic and writer. Also Secretary General of BKA (Grandparents' Climate Action).

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