Tom Barry

Leading by example

Foreign policy and economics are linked. The biggest countries have more resources to pursue their foreign policy goals. In the past foreign acquisitions or colonisation were seen as a way to achieve economic dominance. But the two are often treated separately.

The recent financial crisis and subsequent global economic recession has shown that they cannot be. The Council on Foreign Relations recently put together a multimedia show that explores what they call "geoeconomics" - defined as anything that touches on both the economy and geopolitics. It's well worth watching in full.

As the CFR notes, one of the possible casualties of the crisis is the dominance of the open market model exemplified by the UK and the US. The risk is that countries around the world see the crisis as a signal that this economic model is not going to deliver for their citizens and they retreat from some of the reforms that have been so successful in driving global development.

Clearly, there are many lessons to be learned from the crisis - from financial regulation to the renewed use of fiscal policy. But it would be dangerous if they included wholesale retreat from global economic openness as well.

Posted at 16:44 11 August 2009 by Tom Barry  |  Comments[3]