How Targeted Measures Are Changing the Global Economy: Three Scenarios for the Future

The invasion of Ukraine by Russia has prompted Western nations and their allies to impose extensive sanctions. This is yet a further example of how economic interdependence has been utilised as a weapon to address security challenges. This frequent, and often aggressive, utilisation of sanctions can decisively affect the functioning of globalisation. There are three most likely scenarios. Firstly, the increased use of extraterritorial sanctions affecting business climates and trade relations will lead to the fragmentation of the global economy. Second, the markets will find ways to contain the risks due to economic and political disruptions due to the imposition of economic sanctions and, therefore, the status quo is likely to prevail with only a gradual or minimal impact on global trade dynamics. Third, the value of a global economy would inspire a new world order wherein sanctions would not be as frequently used as today.

Revised version of a paper presented at the IAI Transatlantic Security Symposium 2023–24, held in Rome on 22 April 2024.