consumer good companies faced boycotts after also been contemplated by the United States of continuing to provide basic necessities to Russia, America.27 and a European energy company was accused of “complicity in war crimes” due to linkages to a Together, these trends towards geoeconomic 25 Russian gas 昀椀eld. warfare risk creating widespread spillovers. More extensive deployment of economic levers to meet In the face of vulnerabilities highlighted by the geopolitical goals risks a vicious and escalating cycle pandemic and then war, economic policy, particularly of distrust. Financial and technological rami昀椀cations in advanced economies, is increasingly directed may highlight further vulnerabilities, leading states to towards geopolitical goals. Countries are seeking proactively wind back other interdependencies in the to build “self-suf昀椀ciency”, underpinned by state aid, name of national security and resilience over the next and achieve “sovereignty” from rival powers, through two years. This may spur contrary outcomes to the onshoring and “friend-shoring” global supply chains. intended objective, driving resilience and productivity Defensive measures to boost local production and growth lower and marking the end of an economic minimize foreign interference in critical industries era characterized by cheaper and globalized capital, include subsidies, tighter investment screening, labour, commodities and goods. data localization policies, visa bans and exclusion of companies from key markets. This will likely continue to weaken existing alliances as nations turn inwards, with enhanced While initially driven by tensions between the United state intervention perceived to drive a “race to States of America and China, many policies are the bottom”. Further pressure will be placed on extra-territorial in nature or have been similarly multilateral governance mechanisms that act as adopted by other markets, with spill-over effects mitigants to these risks, potentially mirroring the across a broad range of industries. For example, politicization of the World Health Organization Switzerland is considering the introduction of a (WHO) during the COVID-19 pandemic and the general cross-sectoral foreign direct investment near paralysis of trade enforcement on more screening regime for the 昀椀rst time. Expanded state contentious issues by the World Trade Organization aid to support self-suf昀椀ciency in “strategically (WTO) in recent years.28 It will also likely embed important products”, including climate mitigation and the importance of broader geopolitical spheres adaptation, has also heightened competition within of in昀氀uence in “dependent” markets, with global global blocs. The EU has already raised concerns powers extensively exercising trade, debt and about the USA's In昀氀ation Reduction Act, which technological power. Although some developing includes signi昀椀cant tax credits and subsidies for local and emerging markets may wield critical resources 26 green technologies. as leverage, considered in Chapter 3: Resource Rivalries, anticipated controls on capital, labour, Economic levers are also being used to proactively knowledge and technological 昀氀ows risk widening the constrain the rise of rivals. This includes delisting developmental divide. of foreign companies, extensive use of the foreign direct product rule and export controls on key In addition, spheres of in昀氀uence will not be purely technologies and intellectual property as well as contained to global powers, nor “dependent” broad constraints on citizens and entities working developing and emerging markets. The in昀氀uence and with designated foreign companies. The introduction alignment of the Middle East in regional and global of an outbound investment screening regime has politics will shift. Although the challenge of longer- Global Risks Report 2023 20