THE WEAPONIZATION OF ECONOMIC INTERDEPENDENCE: SANCTIONS, FINANCIAL STATECRAFT, AND THE FRAGMENTATION OF THE GLOBAL ECONOMIC ORDER

Systematic weaponization of economic interdependence in the form of sanctions, financial statecraft, export controls, supply chain securitization is fostering the fragmentation of the global economic order. This paper posits that the coercive leverage as exposed in the use of unprecedented measures has spurred active fragmentation best qualified by strategic diversification away from dollar reserves, by utilization of parallel payment systems, by friendshored industrial ecosystems and by an alternative trade corridor. Rather than power being further consolidated behind the sender, instead agency is redistributed back to “swing states” that are skilled at hedging between the blocs, and to hit states who develop advanced practices of evasion and capacity for withstanding consequences. The subsequent multiplication of centers creates systemic susceptibility to cascading shocks, and hinders collective responses to climate and pandemics, as well as embeds inflationary dysfunctions. The more assertive resistance of the Global South to extraterritorial coercion, and demand for governance reform, also modifies the terrain of struggle. The weaponization wager trades group stability for relative power, requiring statecraft focused on mutual dialogue and moderation to manage common planetary dangers.