- CFA Exams
- 2024 Level I
- Topic 2. Economics
- Learning Module 5. Introduction to Geopolitics
- Subject 5. The Tools of Geopolitics
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Subject 5. The Tools of Geopolitics PDF Download
The tools of geopolitics may be separated into three types.
National security tools. The most extreme example of a national security tool is that of armed conflict. Espionage is an indirect national security tool. Military alliances are often used either to aid in direct conflict or to deter conflict from arising in the first place.
Economic tools. They are used to reinforce a cooperative or non-cooperative stance via economic means. Among state actors, economic tools can include multilateral trade agreements or the global harmonization of tariff rules. Economic tools can also be non-cooperative in nature. Nationalization is a non-cooperative approach to asserting economic control.
Financial tools. They are the actions used to reinforce a cooperative or non-cooperative stance via financial mechanisms. Examples of cooperative financial tools include the free exchange of currencies across borders and allowing foreign investment. Examples of non-cooperative financial tools include limiting access to local currency markets and restricting foreign investment.
Multi-Tool Approaches. It is possible to combine cooperative political, economic, and financial systems. For instance, cabotage is a foreign company's legal permission to convey goods inside a country. Numerous nations, even those with multilateral trade agreements, place limitations on cabotage in all areas of transportation.
International organizations may utilize a variety of geopolitical tools to achieve their goals. Many geopolitical actors are less likely to start a fight or employ a hostile tool against other actors as they utilize more collaborative tools.
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