Weaponised interdependence

Indian Economy glossary

Also called: Weaponization of interdependence · Topic: International Trade Policy, WTO and Intellectual Property · NCERT: Beyond NCERT

Meaning

Weaponised interdependence is when a country uses its control over a shared global network to put pressure on other states. The network might be a payments system, a data platform, a key technology or a supply chain. Global trade and finance pass through a few central chokepoints (points that everyone must go through). A country that controls a chokepoint can do two things: cut others off from it, or quietly watch the information that flows through it. So the same links that make trade efficient can be turned into tools for economic coercion (economic pressure used to force a change in policy) or spying. This is why countries now treat supply-chain resilience (the ability to keep goods moving when one supplier fails) as a matter of national security.

Example

In 2022, Western countries shut some Russian banks out of SWIFT, the messaging system banks use to send cross-border payments. They also froze about US$300 billion of Russia's central-bank reserves. Both steps worked only because the West controls these financial networks. Indian ports show a similar risk. Most of their cranes come from one Chinese company, ZPMC. A US congressional investigation found cellular modems with no clear purpose inside ZPMC cranes at US ports, and such modems could allow remote access.

Don't confuse with

  • Economic sanctions: sanctions are a policy tool, such as a trade or investment ban. Weaponised interdependence is one source of their power: control over a network that others depend on. A simple import ban needs no such control.
  • Weaponisation of trade: this is the wider idea. It covers any use of tariffs, export bans or trade dependence for political pressure. Weaponised interdependence is the narrower case where the leverage comes from controlling a central network.

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