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A complex world: geopolitical analysis

Technological advances, new business strategies, and an increasingly fragmented political landscape, all shape a complex reality, from which Europe seeks to remain cohesive in defending its interests and values. The director of the political think tank at the European Council on Foreign Relations in Madrid, José Ignacio Torreblanca, conducted an incisive analysis of the situation during his participation in the latest International Workshop held by MAPFRE Global Risks.

José Ignacio Torreblanca, Professor of Political Sciences and International Relations, has been leading the European Council on Foreign Relations’ (ECFR) Madrid office for over 15 years, a European think tank that seeks to structure strategies around a more united and solid Europe, cohesive in defending its interests and values in the world. Specifically, Torreblanca’s work is focused on the area of technology and geopolitics. “In recent years I have been increasingly convinced that innovations such as digitization are a great distributor of power, a disruptor inside and outside the member states,” he says.

Existing international agreements and business strategies —mainly in the energy field—, made by interdependent regions, have translated into vulnerabilities in the current war context. “In contrast to the idea of a cold war, where the two blocs are isolated from each other and their interactions are very limited, they have become instruments of power to coerce foreign policy,” he says.

The ECFR has worked with the European Commission over the last year to draft the EU’s digital foreign strategy, with the aim of gaining a position among innovation leaders and overcoming its technological dependence –as compromised as its energy dependence– “A significant part of this roadmap will drive a digital alliance with Latin America that requires budgetary support. It has to be an agreement on markets, on democracy, and also on values,” he said.

 

A new global regime

Ukraine’s war has disrupted the global order, affecting supply chains and placing strain on international agreements. “From the EU’s point of view, we see that in the quest for strategic sovereignty and autonomy, the world is inevitably moving towards a much more fragmented regime in which it is very difficult to operate. We are transitioning from a rules-based reality to one based on power,” explained Torreblanca.

The international relations expert highlighted some trends that are marking this evolution: the transition of global power from a political standpoint between the United States and China —which entails accommodation by other countries—, the fragmentation of the international economic liberal order —with protectionist trends—, and the erosion of democracies. “When we combine these three elements, we come across a very weakened liberal order, with which we have returned to power politics, spheres of influence, and limited sovereignty ideas,” he said.

“We have a division within the territory, between a more protectionist than average German axis and a number of supporters of so-called ‘open strategic autonomy'”

 Contingent European Strategy

All these international conflicts place the EU in the position of whether or not to become a pole of reference, a global stabilizer that generates multilateral rules in the field of technology and trade. “It’s not technically belligerent, but the sanctions packages it adopts are seen as an aggression. Therefore, the region is in an economic war,” the expert said.

Another open front is climate change, which is also a contentious issue. With the energy transition, many countries will lose their main power, based on the oil, natural gas, or coal market. “We Europeans have decided to unilaterally dismantle fossil fuels, but if we have to impose the cost on others with border adjustment mechanisms, there will be geopolitical tensions,” he warned.


A complex business scenario

During the Covid-19 pandemic, technology transactions surged with an increase in the flow of digital goods and services. “However, there are increasingly more limitations,” the expert said. “The index measuring online trade restrictions across more than 100 categories indicates that there is more fragmentation. Of course, with China at the forefront. The United States remains, along with New Zealand, Iceland, Norway, Ireland, and Hong Kong, one of the most open countries.”

In Europe, tensions are beginning to emerge over data sovereignty and virtual activity. Under what conditions does this occur? How can other platforms operate in the region without adhering to certain standards? “We have a division within the territory, between a more protectionist than average German axis and a number of supporters of so-called open strategic autonomy, in an attempt to ensure that profits are not achieved at the expense of innovation or international flows,” Torreblanca revealed. In this debate, which will continue over the next few years, international relations will play a key role. “Before the World Trade Organization, sanctions were determined by anti-dumping, for example. They are now extraterritorial or lack economic justification,” he warned.

How will all these litigations be resolved when they are based purely on reasons of national security or geopolitical interest? “The United States has 29,000 sanctioned individuals or companies worldwide for political reasons. The European Union, 15,618. We are continuously reusing economic and trade instruments for foreign policy reasons and therefore introducing major disruptions in many economic sectors, including many countries,” he said.

“This idea that social networks were going to help democratization, as we thought during the Arab Spring, has been turned on its head and has put us citizens on the defensive” 

Pursuing digital leadership

We are currently witnessing a technical and specialized competition between the United States and China. However, almost no European company is participating in this rivalry. Each technology generates its own geopolitical order. When you trade in fossil fuels, control over extractions, pipelines, and maritime transport is critical. When your economy is based on digital technologies, perception changes. The big players are not Saudi Arabia or Russia, but rather Alphabet or Microsoft. Rather than marine shipping lines, what matter now are submarine cables.

“Until now, no one has been concerned about who controls them or where they pass through. We have now realised that most of the communications network is in the hands of the United States, although China is creating its own to transport its data and establish links with other countries,” explains Torreblanca about these very important elements of penetration from a geopolitical point of view and in the struggle between spheres of influence. In this context, Latin America has significant potential to become a strategic provider of new materials to a digital economy in transition.

 

Erosion of democracies

The digital sphere has become an important factor in the destabilization of democracies through the disarray of informative spaces, encouraged by the vulnerabilities of virtual platforms and social networks, which have ended up acting as uncontrolled media, with business models based on attracting attention rather than generating reliable news. “The percentage of people who think that democracies or elected governments were brought to power legitimately has fallen dramatically,” the expert said. These influence and disinformation operations undermine citizens’ trust in their governments and institutions.

This tension grew during the pandemic, with surreal scenes. “We’ve seen 5G towers burned down in the UK because people were convinced that they interacted with the chip they inserted when you were vaccinated,” he recalled. The regulation of these phenomena and global networks is very complicated, although, fortunately, large technology companies are starting to take steps towards effective control systems. “This idea that social networks were going to help democratization, as we thought during the Arab Spring, in the sense that they were going to make opposition and contestation more possible, has been turned on its head and has put us citizens on the defensive”, he concluded.

 

 If you found this interesting, keep reading… November will be the turning point for assessing energy self-sufficiency in Europe

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