Accession Number:

AD1045783

Title:

Investing in the Future World Order: Geoeconomic Strategy and Foreign Direct Investment

Descriptive Note:

Technical Report

Corporate Author:

SCHOOL OF ADVANCED AIR AND SPACE STUDIES, AIR UNIVERSITY MAXWELL AFB United States

Personal Author(s):

Report Date:

2017-06-01

Pagination or Media Count:

121.0

Abstract:

Preservation of the US-led liberal world order is vital to the national security interests and long-term economic prosperity of the United States, and changes are occurring to the international system which warrant US attention. There has been are surgence of the use of economic tools in statecraft and a rise of Foreign Direct Investment FDI in international commerce. Because of these changes, states are developing geoeconomic strategies to better employ the economic instrument of power in support of economic and geopolitical interests. Leveraging of FDI has become a powerful tool in geoeconomic strategy, and many states are using FDI to further their global influence. The United States, however, does not have a strong geoeconomic component of its grand strategy and is not actively leveraging FDI. This thesis begins by discussing in detail the resurgence of geoeconomics and the rise of FDI. Following that discussion, the thesis provides a framework for analyzing geoeconomic strategies and incorporating FDI into those strategies. The framework is applied to three case studies and examines the geoeconomic strategy and directed-FDI use of three states Germany, China, and the United States. Germany and China leverage FDI to pursue their national interests. Conversely, the United States primarily subscribes to a laissez-faire view of economics, treating economics as an almost apolitical field. This puts the United States in a position of disadvantage in todays geoeconomic-centric world. The final section of this thesis discusses potential geoeconomic strategies for the United State and provides a recommendation for future research to assist in the development of those strategies. The author concludes that the United States needs to reinvigorate its thinking about geoeconomics, develop a strong geoeconomic component of its grand strategy, and consider the leveraging of FDI in the development of its geoeconomic strategy

Subject Categories:

  • Economics and Cost Analysis

Distribution Statement:

APPROVED FOR PUBLIC RELEASE