19 Jul Applicability of ius contra bellum international principles and standards to hybrid threats coming from the economic sector
Economic development has always played an important role in national security. Simply put, economic development determines a state’s potential for warfighting. The economy, as an instrument of national power, depends on foreign investments, capital, market regulations, innovations, trade, human capital, etc. These factors are variables through which a state can be influenced or can play a crucial role in practicing this instrument in practice. The market-based economy, or at least different forms of it, dominates the world. Market-based economy is strongly related to democracy and is internally regulated by the supply and demand dynamics, with the state having a limited role in market regulation. Non-state actors, such as corporations, act under market dynamics in terms of production, goods, and services, leading to a horizontally regulated economy. The idea of using this segment for political influence during peacetime was developed by proponents of liberal democracy. Concepts like “Track two diplomacy” or “Multi-track diplomacy,” among other forms of influence, use the economy as an avenue to enforce, establish, and maintain peace.
However, not all states that practice democracy have a market-based economy with limited state involvement. Countries like Russia, China, Iran, and North Korea have utilized the opportunities of the open global market stimulated by liberal democracies, but with a different conceptualization. These countries have established what is known as a “corporate state.” In practice, the global market, predominantly regulated horizontally by non-state actors under a capitalist-based logic, is challenged by the concept of a vertically regulated economy operating under centralized regulation. In other words, Russia, China, North Korea, and Iran have a so-called command economy during peacetime, unlike western democracies where the private sector plays a dominant role and acts in a centralized “vertical” (top-down) manner. Synchronized and state-sponsored activities in market competition can significantly weaken the economic competence of victim states and directly undermine their political and defense capabilities.
From a legal perspective, this is problematic because these states operate on the threshold between peace and war, using wartime models of the economy during peacetime. The corporates, which act as an extended hand of the state, have an incomparable advantage over Western-based companies in market competition. The only recourse from a legal perspective would be to apply criminal, corporate, or similar laws applicable in peacetime. However, the applicability is limited because it can be challenging to prove any wrongdoing, and even if evidence exists and attribution is clear, jurisdiction becomes the next obstacle. Even if there is an international court decision, there is no real executive power to enforce the law or judgment. As a result, companies can suffer significantly from wrongdoing and economic manipulation. One could argue that thanks to the domination of the liberal market and the growing body of international economic criminal law, there may be some applicability.
Despite everything, cumulative actions have an impact on military and political power. In addition to indirect and unfair competition, the greatest threats come from economic crime (cybercrime) and espionage (cyber espionage).