Shatha Khalil *
Economic war is one of the oldest types of wars known to mankind, which, as a kind of conflict over economic resources, possessing international markets, energy and water sources, which are the main causes of World Wars I and II, and until the middle of the 20th century , those wars were being carried out . Economic wars in the past centuries were not clear by the use of military force and colonialism that spread throughout the world at the beginning of the nineteenth century.
Experts say modern wars and civil strife since the beginning of the 20th century have led many countries to adopt economic planning that maintains a balance between the local economy and the requirements of routine civilian expenditures on the one hand, and the need for the war effort of the resources and extraordinary measures on the other hand.
In the second half of the twentieth century, the images of economic occupation and control of markets, through the movement of imports and capital, replaced military power, and its greatest forms were shown in globalization and the new world order, which had its devastating effects and serious consequences, especially on third world countries. “The consequences and effects of the economic war are unemployment, migration, changing perceptions of social knowledge, increasing poverty, illiteracy, and rising numbers of people living below the poverty line.
The concept of wars economics:
It is the process of mobilization and inventory of all available national resources of material and human, and redistributes their use, so that the bulk of them are devoted to serve the war effort, in order to achieve victory in the battles fought by the state.
In other words, the set of measures taken by the state during wars, or when crises and internal conflicts erupt, and to maintain its economy during these exceptional circumstances, by adopting a productive system that provides economic resources to ensure continuity of internal civil cohesion and to win the military confrontation , it is defined as the economy of war which is a change in the structure of the economy of the country that is going through a war, allocating a large part of the state resources to face the expenses of war and armament, in turn, it reduces public spending to provide only the necessary needs of the citizen , it means the development projects , social welfare and other activities sponsored by the state, retreat and become minor things.
Therefore, the “war economy” is essentially a non-productive economy, especially as it depends on external aid and is governed by networks of interests spread between the business and financial sectors and between state and government institutions, it puts pressure on economic choices and determines their directions.
Observers point out that its implications are the severe shortage of goods in the civilian sector caused by the increase in demand during the war, because of the need for military supplies to the armed forces, in addition to the chaos that may pervade markets and lead governments away from their economic system, to intervene in the economy, so it resorts to distribute resources and goods by administrative decisions that go beyond the market mechanism when necessary.
The countries that enter into war are obviously turning their economy into a war economy. The priority is to secure basic materials such as fuel and food, amid the decline in the activity of many productive sectors. The economist “Philippe Le Beilon ” defines the economy of war as: system of producing ,mobilizing and allocating resources to sustain the war effort.
The most important images and plans of economic wars:
1. Dumping countries concerned with debt and interest, so as to refrain from payment and worsen their reputation in the world, and thus prevent the freedom of borrowing from the outside world, and then stop development programs, and may threaten their social stability.
2 – To create crises between neighboring countries targeted economic wars, for the benefit of the major countries from the sale of weapons and depletion of natural resources of those countries, as happened between Yemen and Ethiopia, Syria and Turkey, the UAE and Iran.
3. Plans to ensure economic dependency by linking the economies of the target countries to the economies of the major countries by providing them with food and medicines, providing economic aid, annual aid, etc., thus ensuring the allegiance of these conflicting countries to the major states from the economic and political aspects because these countries were dependent on that aid and it has become indispensable.
4. Military protection, in the sense that developed countries guarantee a number of countries with natural resources, which do not have the power to defend themselves, permanent military protection, or temporary, in exchange for large sums of money, oil and rare natural resources, for example the US protection for the Gulf States.
Types of financing economic wars “international and civil”:
Wars are generally very expensive and must be financed. Inter-State wars are more expensive than civil wars because they mobilize much larger resources, but they are easier to finance because the belligerent has the means of coercion and institutional legitimacy, so through legitimate coercion it can do the mobilization and confiscation for military purposes, imposing tax, leveraged, and thus postpone financial problems.
In this context, we recall the debates that followed World War I, the war reparations owed to Germany, the criticisms against Keynes, the failed attempts to improve the gold standard and the 1929 crisis.
Civil wars are small wars, but financing is more difficult, because tax deductions can not be carried out under the guise of institutional legitimacy, borrowing is prohibited, and it is directly taken as a form of theft and looting. External assistance is indispensable, which is always available in its lowest forms to allow the passage of arms and supplies, or direct supplies,and assistance.
In both cases, such assistance is not without interest, and due to the imbalance in power between the two sides of the civil war and its external supporters, assistance is used as collateral for those, to restrict the freedom of action of the entrants, both in the conduct of the confrontation, or in particular to negotiate the exists of war, in addition, entrants seek to ensure maximum self-sufficiency and security by redoubling their “own” resources to the maximum possible extent.
With easily exportable resources, especially precious stones and precious metals, the financing of civil wars is an easy process, although it encourages overseas buyers to buy them cheaply. They become the patron and backer. This is the case of repeated civil wars in a number of African countries, in Syria, for example, we witness an unexpected development of oil exports, even though they are no longer hidden. It is worth to mention that the black market for oil – widely dispersed and largely overlooked – was created at the time of the embargo imposed on Iraq , in the absence of natural resources, the local factions finance themselves by resorting to the cultivation and exportation of all types of drugs , both in Afghanistan and in various Latin American countries – In Lebanon, the looting of the warehouses of the Beirut port in 1976 has fueled a wave of deadly conflicts, and, as a result, Feeding emerging militia funds, and kidnapping for ransom.
It is worth to refer to the operations of looting of bank safes which were the least common operations, and in this regard, one case in Lebanon was recorded during the 15 years of the war. Banks are immune because they can easily pay money to militias in order not only to secure “protection” but also because it is indispensable to finance the civil war as a whole, for the militias or the population.
Exchange channels and rich war:
In the wake of inter-State wars, the channels of exchange and supply are blocked by the transformation of the border into “confrontational” lines and with the development of warships, the closure of commercial channels has become a weapon in itself, as it creates to the warring States possessing this power the desire to tighten the noose on its enemies , they are forced to direct part of their military efforts to control “strategic” sources of supply, or even to impose a blockade, or to take reciprocal blockades, the best proof of which is World War I and, to a greater extent, World War II.
On the other hand, during civil wars, the internal corridors are cut off, spontaneously beginning by violence, and then in an organized way by militias that find looting of domestic goods a major source.
The Components and Features of Economic Warfare:
The main components and features of economic warfare can be summarized in the following points:
1. The strength of the balance of payments within the State, its ability to be free from external shocks, or the resistance to such shocks.
2. The strength of the national currency against foreign currencies, and the currency’s enjoyment of the value and history among other currencies, through exchange rate regimes that are subject to market mechanisms.
3. The strength of the productive apparatus within the state, its ability to meet internal needs, and the ability to create a competitive surplus when exporting.
4. The flexibility of the productive apparatus in the production of various goods. For example, General Motors of the United States can be converted to produce tanks at the same time.
5. The size of the internal market in the country, and its consistency and diversity, so that the internal market is compatible with the potential of productive countries, and can absorb the productive activity and service, and all the above is considered by the power of the state to enter the economic wars, in other words, these states have tools which are enabling it to carry out the economy attack , and at the same time, have mechanisms to defend the national economy, because the national economy is characterized by strength and continuous growth.
The most prominent weapons used in economic warfare:
1. Economic boycott:
Economic boycotts are one of the most important weapons of economic warfare through the complete boycott of commodities of one country, non-importation or exportation of any country’s goods by using products competitive with that country’s products, giving them no opportunity to promote their export goods, and the boycott of food goods is more effective because they are more rapid in damage, followed by then manufactured goods.
2. Economic and military siege:
The economic boycott could enter a wider range, including the economic blockade and prevent the entry and exit of goods into the area within the economic blockade, through a naval, air and land blockade, as was the case with Iraq, Libya and Cuba.
The economic embargo is the most lethal weapon of economic war, because it has a shortage of medicines and food and limited contact with the outside world, which has far-reaching economic and social consequences such as famine and disease.
3. Market penetration, monopoly and dumping:
The penetration of internal markets from the major countries capable of launching economic war is one of the most important weapons used in that war, where the penetration of the markets and the dumping of some goods and products to hit the internal productive apparatus of the state and weaken it and its inability to compete and resistance by exploiting International agreements that allow free trade, the penetration of markets through monopoly and the possession of production lines and vital industries in countries wanted to be economically destroyed.
Proof of this is the US relationship to Europe through the soybean trade, where the United States has a global monopoly on soybean trade, which exports 10 million tons to feed animals in which the food of Europe of meat depends heavily on.
The United States is very vigilant to protect this monopoly. It has succeeded in shutting down the Lavera plant in France and the Sardaigne facility in Italy to prevent industrial producers from using a new innovation for a French scientist to produce a better alternative to American earnings.
Perhaps the only thing that the United States is importing from the world is the human mind, where it works to attract and nurture those minds and provide all the elements for their success, which can have a severe impact on it.
4. Making economic crises:
Developed countries have mechanisms to create / fabricate economic crises in other countries, whether financial crises, bank crises, stock market collapses, and cyclical crises such as recession.
These devices have the tools to enable them to do the job, such as high-speed technology, which enables them to tamper with the indices of global or regional stock exchanges, as well as dissemination of rumors aimed at certain things, and other methods of technology and tactics, these devices have played a major role in the creation of global financial crises and international economic collapses, owing to the economic and political interests of the States that possess such instruments, as evidenced by the Asian tiger crisis of 1997.
5. War and corruption trade:
In all wars, there are great corruptions, such as arms sales to the parties of the conflict, the exhaustion of state resources by gangs, and corruption also is indispensable for the war. When countries pursue the principle of combating it, they use the term “war on corruption” as an indication to enhance the close relation between war and corruption.
Corruption is a complete and integrated system that has contributed to illicit enrichment and, in the last few years, has created a state of social unrest where the corrupt and the merchants of war tampering with the institutions of the state to get the economy from bad to worse.
At the beginning of any crisis or war, the country changes rapidly and strangely to coincide with the general situation of the country that contains these emergency conditions. It begins with it the rise and emergence of a new class in society, a new social class and owners of anonymous funds , they are often poor and simple business owners, not money and business owners, and the logic starts with asking one question, where do you get it.
Areas that suffer from security disturbances, such as war zones, clashes, blockades or border areas, some work in the arms trade, begin to promote new weapons or ammunition of all kinds, and offer them for sale to the parties of the conflict without hesitation. They bought them illegally, stolen government stores, or they bought them from unauthorized organizations or manufacturers, and had no objection to selling their weapons and ammunition to extremist or racist groups. What matters first and foremost is money.
Some of them monopolize foodstuffs and sell them at fictitious prices. They collect food, press the shopkeepers by force and intimidation to raise the prices of goods or close their shops to be able to sweep the market through false rumors and false news, prompting people to rush to their rescuer out of this catastrophe, Thus, the scheme succeeds and money increases easily.
There are people who trade in human beings, some traffickers abduct and capture men and women for physical ransom or trade with their organs.
There are people who trade with souls of young people , they don’t care for people and conflict, they only care for money noting that in the border areas, the trade of narcotics and all kinds of cannabis and drugs are reviving in addition the trade of fuel . They make agreements with a number of bribery officials from both sides of the conflict to facilitate the way of their goods and to overlook their merchandise and their militias / gangs. Before the war, they were not only outlaws and state-run pursuers, but the crisis made them to keep up with this behavior, work more freely, inject more drugs and cannabis, and spread them among young people. This happens in the absence of a strong state role – it is the investment of crisis and war to collect money.
Economic Studies Unit
Rawabet Center for Research and Strategic Studies