Global economic warfare needs new rules

By Hugo Slim

As I write, Ukrainians are waking up after another night of Russian bombing that is deliberately intended to hurt civilians by destroying essential power stations and impoverishing their lives. Today, once again, it will be impossible for millions of civilians to cook hot food, keep warm and clean clothes, run hospitals, schools and banks, turn on computers and charge mobile phones.

This is economic warfare – that ancient strategy of war which intends to degrade or destroy the enemy population’s “household management” - the original Greek meaning of the English word, economy. In pre-modern agrarian societies, economic warfare involved scorched earth policies which burnt fields and barns full of crops, poisoned wells, and carried out comprehensive looting. In addition to bombardment, Russian policy is also to blockade Ukrainian ports and loot as much agricultural and industrial material as possible in parts of Ukraine under Russian occupation.

Economic warfare runs both ways in this war. Western states ranged against President Putin are deliberately de-coupling their economies from the Russian economy by disinvestment, boycott and blockade. Their intention is to degrade the Russian economy and encourage widespread dissatisfaction with Putin among the Russian population. De-coupling is also intended to brand Putin’s government as a pariah with whom it is wrong to associate in any way.

In the euphemism of the UN vocabulary, Western states describe their economic warfare as sanctions. Such sanctions also cause civilian suffering and are partly responsible for hundreds of thousands of Russians fleeing to Armenia and Georgia, for many Russian businesses shutting down and the crisis of spare parts. At the same time, many Western businesses and employees are suffering from a loss of assets, income and jobs caused by disinvestment.

The repercussions of economic warfare in this great power conflict are truly global and set this war apart in the recent history of economic warfare.

Big war means big economic war

Over the last thirty years, economists and humanitarians have thought hard about war economies. They have exposed how governments and armed groups have used war as “economics by other means” and how state failure is so often linked to violent economic capture of natural resources by elites. Important links have been made between war, timber, diamonds, drugs and other natural resources in the wars in Liberia, Sierra Leone, the Democratic Republic of Congo, and Myanmar. There was also a rigorous analysis of the effects of economic restrictions on the people of Iraq, which produced a better understanding of the humanitarian impact of sanctions.

But the Ukraine War is a Big War. It is a war between two major economies and a wider confrontation between two global powers – Russia and NATO countries. This conflict’s economic warfare is affecting hundreds of millions of people around the world who are thousands of miles beyond the military warzone.

These wars were relatively small and fought between small armies within poor and internationally powerless states. Millions of civilians still suffered from this economic warfare. But the Ukraine War is a Big War. It is a war between two major economies and a wider confrontation between two global powers – Russia and NATO countries. This conflict’s economic warfare is affecting hundreds of millions of people around the world who are thousands of miles beyond the military warzone. As multi-domain warfare, this economic warfare also risks devastating attacks and blockades across the world’s cyber economy.

When great powers engage in economic warfare, it affects the world economy. The reverberating effects are truly global and reach billions of people. Russia may not have proved itself a great military power, but it is a major energy power because of its oil and gas. Civilians shivering in Poland and the UK this winter will be cold because of energy warfare over Ukraine. People short of food and facing high prices in East Africa, West Africa and the Middle East will be doing so because of food and fertiliser blockades around Ukraine, unless the UN Black Sea Export scheme can hold its own.

The shock of economic warfare in Liberia and Sierra Leone led to important new regulations on the trade in diamonds and other conflict minerals. Should global economic warfare now be subject to similar regulations and new rules? If so, what would they look like?

Regulating global economic warfare

In the midst of Putin’s new wave of bombardment, international lawyers will argue about the legality of attacking “dual use” facilities in war - infrastructure that serves both military forces and civilians. Such targets are legitimate in certain circumstances. They will also argue over which natural resources and infrastructure must be protected as “indispensable to the survival of the civilian population”, and which are not.

These laws of war, which limit civilian suffering during the conduct of hostilities, are important. But their limited definition of civilian populations as only citizens of warring parties, or in the control of warring parties, limits their view of economic warfare’s global effects. Big economic warfare demands that we extend war’s regulation and protection to citizens thousands of miles away whose governments are taking no part in the conduct of hostilities. In many cases, these people are remote collateral damage.

But how realistic is it to set rules for economic warfare? Surely, every state and any business has the right to choose where it invests and with whom it does business. Also, States preferring to use economic force to reduce military risks to their citizens and prevent the escalation of war may make good ethical sense.

Yet, governments are required to consider the consequences of any action they take because public policy is never enacted in a moral vacuum. The suffering caused by economic warfare must be taken into account and avoided or mitigated wherever possible.

So what might regulation be able to achieve?

Precautions, exclusions and human rights

First, regulation could affirm the principle of global precautions in economic warfare, and the importance of recognising or reducing its unjust consequences on people living far beyond the war, with no stake in the fight. Such global precautions would endorse the generally accepted prohibition of indiscriminate warfare and ensure that economic warfare is limited.

Secondly, regulation could agree that certain essential commodities and services should always remain outside blockades and play no part in economic warfare’s impact beyond the war zone. This would include water, basic food supplies, essential energy supplies and medical supplies, which could never be globally restricted.

Likely take-up of these two approaches – global precaution and global exclusions in economic warfare - is already promising. Both Russia and NATO states are seriously working to reduce the risks of world hunger through the Black Sea Agreement. It is clear that both sides see humanitarian and political interests in limiting the global effects of their economic warfare. In the same way, all NATO states have acted to reduce the consequences of energy inflation for their own citizens by providing energy subsidies. This too is important, even when many of their citizens support Ukraine and are willing to suffer to some extent to secure their victory.

International human rights law already has everything needed to legally insist upon clear limits to global economic warfare by requiring that it does not violate people’s rights to life, food, health, education and their right to earn a living, and other economic rights.

Thirdly, international law can play a useful role in underwriting these two policies and giving them a firm legal basis. Here, there are two routes - international humanitarian law (IHL) and international human rights law. It will probably take years for States to reach agreement on a new protocol to the Geneva Conventions on global economic warfare, or to invest political time and capital to agree to some new principle that sees IHL’s provisions extending beyond the territories of warring parties to take account of economic warfare's global effects. Instead, international human rights law already has everything needed to legally insist upon clear limits to global economic warfare by requiring that it does not violate people’s rights to life, food, health, education and their right to earn a living, and other economic rights. This is the approach being taken by UN Special Rapporteurs reporting to the Human Rights Council.

Global economic warfare is a reality once more as we return to a world of confrontational great powers. It needs regulation and now is the time to start learning the lessons from its use around the Ukraine War. Such learning and new policymaking is pressing because if the next Big War involves a confrontation between China and the US, then global economic warfare could be catastrophic.

About the Author

Dr Hugo Slim is a Senior Research Fellow at the Institute of Ethics, Law and Armed Conflict at the Blavatnik School of Government, University of Oxford. His new book is Solferino 21: Warfare, Civilians and Humanitarians in the 21st Century.