Editorial – Geopolitics also matters for businesses – Among the big changes that the “Ukraine and Crimea crisis” are bringing or catalyzing, we may be seeing the end of the hegemonic belief that economics, and “business” only matter. Now that the E.U., its European members and the U.S. could be moving towards sanctions against Russia – at least if they want to be true to what they have said –  the corporate world seems to be discovering the huge impact those sanctions may have on each of them, as, for example, they may not be able to honour contracts and deliver goods as in the case of German Rheinmetall and may have to reimburse payments and pay heavy penalties, as in the case of French shipyard STX. Profits will of course be lowered, corporate strategy impacted, while employment and growth at macroeconomic level will be impacted. That Reuters underlines in its title that “sanctions rhetoric shakes companies, investors” [my emphasis] indicates the level to which geopolitics and international matters had been thought secondary to the rest over the last twenty to thirty years. The wake up call could be brutal and go as far as signifying bankruptcy for smaller businesses depending directly or indirectly upon those contracts newly questioned by potential sanctions and Russian potential counter-attacks.

Yet, there was no fatality here. First, the separation between geopolitics, economy, finance, monetary policy, domestic political dynamics, etc. has never existed in the real world. It was at best a convenient way to study different complex disciplines and at worst a (dangerous) ideological statement. Second, businesses, even small ones, can, as much as governments, access and develop strategic foresight and warning analysis for geopolitical matters. I am not here talking about a political risk approach that would only look at elections, or sovereign default risk, with as only policy options “we invest or not”, nor at economic intelligence aka industrial espionage nor either at the hardcore security approach to tactically protect employees and investment. I am here talking about real strategic foresight and warning, which allows for the development of scenarios and thus for the consideration of a whole range of actions BEFORE it is too late, from lobbying, to hedging, to treasury and financial policy to weather correctly complicated times, to real communication and search for solutions with partners in countries where sanctions may apply (that could at least mitigate medium to long-term negative impact), to even relocation of subsidiaries, of course considering second, third and fourth level impacts on reputation, trust, respect from partners, staff and governments, etc.. to a process which, them, through warning, helps steer properly policy and strategy.

Will businesses embrace this new uncertain geopolitical world or will they choose to become its victim? From their choice, and how it develops collectively at country (or actor to remain more neutral) level, will also depend the evolution of norms we evoked with the two previous issues of the Weekly (here and here), and the shape of the emerging world order.

Check also the extremely important paper regarding the possibility to have more than one international currency, which could lead to mammoth developments internationally. Those developments could potentially be accelerated by U.S. and E.U. financial/banking sanctions against Russia.

Click on the image to access the Weeklyweak signals, warning, businesses, Ukraine, Crimea

About the author: Dr Helene Lavoix (MSc PhD Lond)

Dr Helene Lavoix, PhD Lond (International Relations), is the Director of The Red (Team) Analysis Society. She is specialised in strategic foresight and warning for national and international security issues. Her current focus is on Artificial Intelligence, Quantum Science, and Security. She teaches at Master level at SciencesPo-PSIA.

Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.