LM 5: Introduction to Geopolitics Flashcards
What is geopolitics?
Geopolitics is the study of how political decisions and international relations are influenced by geography
What is geopolitical risk?
Geopolitical risk is the potential for events such as policy changes, natural disasters, or terrorism to disrupt the normal and peaceful course of international relations
What are the 2 types of actors that manage decisions about exposure to political risk, describe them? SN
- state actors: national government or country leaders that have authority over country’s national security and resources.
- non-state actors: participate in geopolitics but no direct control of national security or country resources.
What is cooperation in geopolitics?
countries work together when they share common goal
What are 2 main motivations for cooperation? NE
- national security or military interest
- economic interest
What is geophysical resource endowment?
includes factors such as livable geography and climate, as well as access to food and water, all of which are required for sustainable growth.
What is standardization in geopolitics?
Standardization is the process of establishing uniform protocols and rules for the production, sale, and delivery of products and services. (help facilitate economic activities across borders)
What is soft power?
means of influencing another country with non-coercive or no force.
eg. cultural and educational exchanges, travel grants, and advertising.
How do institutions help geopolitics?
Countries generally benefit from having strong institutions, particularly those that promote government accountability, property rights, and the rule of law.
What is at the top and what is at the bottom of hierarchy of interests?
top: survival
bottom: economics & social issues
What is globalization?
countries opening their economies to increase their integration with the global economy
What are 2 features to globalization? CC
cultural features (tastes without traveling to different country)
communicative features (collaborate all over the world)
What are 3 primary motivations for non-state actors to participate in globalization, describe them? IAI
- Increasing profits (eg. produce in different country, low labor cost)
- Access to resources and markets (net potential sources of resources, raw materials, or employees)
- Intrinsic gain (personal growth or net cultural experiences outside of profit)
What is nationalism?
anti globalization; promotion of country own interest to detriment of interest of other countries
What are 4 downfalls of globalization? ULPI
- Unequal Accrual of Economic and Financial Gains (not everyone gains in globalization)
- Lower Environmental, Social, and Governance Standards
- Political Consequences
- Interdependence
What is reshoring the essentials?
returning production of certain essential items back to their domestic market.
What is re-globalization production?
diversify their supply chains
What is Doubling down on key markets?
investing more in key markets to the firm
What are the 2 axis to geopolitics? CG
- Cooperation/Non- Cooperation
- Globalization/ Nationalism
What is autarky vs hegemony?
Autarky: mixture of Nationalism and Non-Cooperation
Hegemony: mixture of Globalization and Non-Cooperation
What is multilateralism vs bilateralism?
Multilateralism: mixture of Globalization and Cooperation
Bilateralism: mixture of Nationalism and Cooperation
What is regionalism under bilateralism?
where a group of countries cooperate with one another, other countries are excluded
What are the 3 categories of tools used by state and non-state actors in pursuit of their geopolitical objectives? NEF
- National security tools
- Economic tools
- Financial tools
What are national security tools?
national security tools are used by governments with the intention of coercing another country to take certain actions.
What are financial tools?
things like global currency market, restrictions on currency trading etc.
What is cabotage?
right to transport passengers or goods within a country by a foreign firm
What are 3 types of geopolitical risk? EET
- Event risk (date known, outcome uncertain eg. election)
- Exogenous risk (possibility of sudden, unanticipated developments that impact a country’s cooperative stance) (aka black swan)
- Thematic risks (risk of a specific theme having great consequences (eg. climate change)
When assessing geopolitical threats what are 3 things investors must consider? LVS
- likelihood of occurrence
- velocity (speed) of impact
- size and nature of impact
What are black swan risks?
risks related to events that are extremely rare and highly unpredictable.
What is the difference between discrete impact and broad impact?
discrete effect 1 company or sector at a time
broad effect many sectors or economy’s/countries
What is a signpost?
signpost is an indicator that a particular risk is becoming more or less of a possibility
What is the difference between world bank group, world trade organization, and International Monetary Fund?
world bank group: organizations that make leveraged loans to developing countries
world trade organization: regulates cross-border trade relations among nations on a global scale
International Monetary Fund: promote economic growth and stability
