06260269 - Geopolitics and IB: new frameworks for development

Geopolitics, as an interdisciplinary subject of geography, political economy, sociology,  international relations…, but there is no unified definition of this term. Generally speaking, the narrow definition of geopolitics risk only includes the threat brought by events related to military conflicts, terrorist acts and international tensions.The broad definition of geopolitical risk that we adopt includes three aspects: -Political (war, social unrest, religious conflicts, etc.); -Economic (trade friction, trade protectionism, anti-globalization, etc.); -Natural (earthquake, tsunami, drought, pandemia, etc.).

The measurement of this risk also has different consequences and economic implications depending on the definition, but there is a broad consensus that geopolitical risks, both broad and narrow, will have adverse impacts on the world economic environment. Geopolitical risks will not only worsen the international relations system, but also cause fluctuations and instability of macroeconomic data such as global oil prices, stock market returns, commodity prices and policy uncertainties. The growing geopolitical tensions due to the mistrust between big powers and competition between them for access to ressources, markets, know how or techonology result into more nationalistic policies that has direct effects in reality: It disrupts trade and FDI affecting global supply chains and economic cooperation, all of which can lower economic growth and impact corporates as well as people’s daily lives.  Multinational corporations and their network of supply-chains and global activities have now to operate in a complex and fast moving business environment in which emerging geo-economic forces are interacting with shifting geopolitical realities. We have also to considerer that in the modern world, business have also a noteworthy effect and great deal of influence on the overall geopolitical situation. In this context, building capacity for Geopolitical Risk Analysis and management is now a new priority for corporates in order to get global policy settings right and improve resilience through a sturdier international strategy. This course is an introduction to the fundamentals of the geopolitics in the business context. Business is in the mist of the current geopolitical transformation, so the first objective of this course is to give to participants a broad perspective on the major geopolitical changes in progress, likely to impact corporate activities. Some cyclical, some more stuctural. Notably: 

• The changing International environment with geopolitical risks on the rise; 
• The gradual displacement of the economic and political center of gravity; from developed countries to emerging countries; 
• The consequences of the geopolitics reshuffling due to the recent events (COVID 19 pandemic crisis; second Trump mandate…).

The second objective of the course is to offer participants a methodology for an efficient Geopolitics Risk Analysis allowing them to identify, assess, anticipate and manage difficulties to which their company could be affected in their international activities.

On completion of this module, students will be able to: 
• Understand the changing nature of global geopolitics and its impact on corporate business environment and activities. 
• Assess the impact of geopolitics events on strategic decisions of the firm.

Estimation of private study (outside of contact hours): 12 hours

COURSE OUTLINE

1- THE NEW GEOPOLITICAL CONTEXT: GROWING GEOPOLITICAL DIVISIONS: TOWARDS A MULTIPOLAR WORLD

A) The return of Geopolitical risk - The world’s rules-based order is cracking - Towards a dual order – The US to preserve the liberal order
- China-US rising confrontation - The US Containement strategy 
- The return of State power : from industrial policies to rearmement
- How the war in Ukraine and the rise of China is reshaping US’s global alliances
-The USA at a turning point ? Beware a world without American power.

 B) Towards a dual order – A more acertive China - China, the challenger of the liberal order?
China is intensely strategic about winning influence : China, Russia and Iran are forging closer ties; China and its neighbours ; China and Africa
-China vs America: how Xi Jinping plans to narrow the military gap
- As economic growth slows, will China have the means of its ambitions?

 C) The Middle Powers dilemma 
-The non allied block
-The Global South, a new definition
-India equilibrium stance

 D) New geopolitical actors - the enlarged BRICS 
-Are the BRICS+ representative of the Global South ?
-The BRICS bloc is riven with tensions
-What is the future of the BRICS?

2- CORPORATE’S GEOPOLITICAL RISK 

A) Geopolitical  risk - Democracies vs Autocracies 
- Western values and the support for democracy are steadily diverging from the rest of the world’s
- The decline of the West in perspective
-The fading of global governance and multilateralism

B) A corporate new geopolitical perspective for investments and trade 
-Protectionism; on shoring; near shoring; friend shoring…
-The use of Sanctions / embargos / Restricted access of advance technologies :  a geoeconomic weapon
-Political / regulatory risks
-Societal risks

C) Other rising Geopolitical risks
-Supply chains risks
-Terrorism
-Criminal risks
-Cyber risks

3. GEOPOLITICAL RISK MANAGEMENT
A) The Global Risks Landscape assessment
-WEF framework
-FFP framework

B) -Business in an era of heightened geopolitical instability
-Scenarii over globalisation
-How to build a robust strategy for a volatile world
 

PRESCRIBED TEXTS AND PUBLICATIONS

• Mikael Wigell (dir), “Geo-economics and Power Politics in the 21st Century: The Revival of Economic Statecraft” (Routledge Global Security Studies, 2020).

RECOMMENDED TEXTS AND PUBLICATIONS

Books
• Ian Bremmer, Preston Keat, The Fat Tail: The Power of Political Knowledge in an Uncertain World, New York, Oxford University Press, 2010.
• Cavusgil, C.S., Knight, G. and Riesenberger, J.R. (2008) International business – strategy, management and the new realities. 
• Czinkota, M. R. and Ronkainen, I. A. (2005) International business – 7th edition. 
• Thomas Friedman, The World is flat: A Brief History of the Twenty-First Century, New York, Farrar, Straus and Giroux, 2005.
• Torben Juul Andersen ; Peter Winther Schrøder, Strategic Risk Management Practice: How to Deal Effectively with Major Corporate Exposures.  (Cambridge University Press, 2010).  
• Mikael Wigell (dir), “Geo-economics and Power Politics in the 21st Century: The Revival of Economic Statecraft” (Routledge Global Security Studies, 2020).
• “International Macroeconomics”, Robert Feenstra and Alan Taylor, New York: Worth Publishers, 2017, 3th edition.

Textbooks
• “Global Development Horizons 2011; Multipolarity: The New Global Economy” World Bank.
• “Seven Challenges to Globalization”, 2015. World Economic Forum report. 
• “Understanding Geo-economics and Strategy” – A New Era of Geo-economics: 

Articles
• “Sharpening strategic risk management” by Armoghan Momammed ; Richard Sykes. (PWC, 2012).
• “Business strategies for emerging markets: Management, investment and opportunities” by David Levine. (EWMBA 257, Spring 2006).
• “Understanding Geo-economics and Strategy” – A New Era of Geo-economics: Assessing the Interplay of Economic and Political Risk, Sanjaya Baru, IISS Seminar 23-25 March, 2012. 

Websites
• Economic indicators: IMF: http://www.principalglobalindicators.org 
• Economic indicators: OECD :  http://www.oecd.org/statistics 
• Economic indicators: https://databank.worldbank.org
• Country informations: http://eiu.com; 
• Corruption: Transparency International’s: http://transparency.org
• Openness: Globalization index: http://globalization.kof.ethz.ch 
• Competitiveness: World Economic Forum: competitiveness ranking: http://weforum.org; IMD World Competitiveness yearbook: http://imd.org 
• Regulatory framework: World Bank: « Doing Business »: http://worldbank.org 
• Business conditions: World Bank: « Doing Business »: http://worldbank.org 
• Corporate and sovereign governance: World Bank: « Doing Business »: http://worldbank.org
• Economic freedom: Heritage Foundation: Index of economic freedom: http://heritage.org; Fraser Institute:  http://fraserinstitute.org 
• Politic freedom: Freedom House: http://www.freedomhouse.org 
• Transparency: World Bank: « Doing Business »: http://worldbank.org    
• Development level : UNDP Human Development Index: http://hdr.undp.org/en/  
• FDI attractiveness: FDI confidence index: http://atkearney.com 
• Risks: http://weforum.org ; https://www.cia.gov/library/publications/the-world-factbook/ 
• Fragile state index: Fragile States Index | The Fund for Peace
• Rule of Law Index - World Justice Project's: http://worldjusticeproject.org

EMBLEMATIC BOOKS OR RESEARCH PAPERS REGARDING THE SUBJECT OF THE COURSE

1. Geo-economics and Power Politics in the 21st Century: The Revival of Economic Statecraft. 2018  (Routledge Global Security Studies). Mikael Wigell, Sören Scholvin, Mika Aaltola.

Individual grade
Personal written assignment
Home work 12h

Other grade(s)
Grading during class
Case study - Oral presentation, 1h

Weight: 70% / 30%

TEACHING METHODS
- Lectures
- Case studies

NATURE OF MATERIALS
Case studies based on recent press articles 

TEACHING INNOVATIONS AND USE OF TECHNOLOGY
ADVISED PRIOR READING

Reference book 
Geo-economics and Power Politics in the 21st Century: The Revival of Economic Statecraft. 2018  (Routledge Global Security Studies). Mikael Wigell, Sören Scholvin, Mika Aaltola.