Economics-2 Introduction to Geo Politics Reading
Description: Economics-2 Introduction to Geo Politics Reading No 13 Version 2023 Study Session 3 Learning Outcome Statements The candidate Should be able to: describe geopolitics from cooperation versus competition perspective describe geopolitics and
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slide1. Economics-2 Introduction to Geo Politics Reading No – 13
Version 2023 Study Session 3<br>
slide2. Learning Outcome Statements The candidate Should be able to:
describe geopolitics from cooperation versus competition perspective
describe geopolitics and its relationship with globalization
describe tools of geopolitics and their impact on regions and economies
describe geopolitical risk and its impact on investments All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide3. Los a: Geopolitics Geopolitics- the study of geography and its effects on politics and trade.
Trade relations
Agreements
Policies
See the table to the right given by the Thomson data stream on how various wars affected returns. All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide4. Los a: Geopolitical Risks Russia Ukraine Conflict: Case study
Total of $139 Billion assets are stuck in Russia
$79 bn in Debt
Companies leaving Russia are leaving 47% of GDP Of Russia
Hence it’s important that Geopolitical risk be studied as a part of investments All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide5. Los a: Relationship Complexities Example All Rights Reserved -Mentor Me Careers www.mentormecareers.com Russia India U.S Ukraine Close Ally Ally Close Ally Attacks Pressure Pressure Oil Imports
NPK Fertilizer
Defense Deals
Diplomacy Against China Disclaimer: The diagram is just a hypothetical depiction of Geo political cooperation complexities, we are in no way expressing any opinion on the current scenario. Readers are advised to use it only for education purposes.<br>
slide6. Los a: Features of Political Cooperation All Rights Reserved -Mentor Me Careers www.mentormecareers.com Source: New York Times<br>
slide7. Los a: Motivations for Cooperation National Security or Military Interest
South Korea and the U.S
India & Russia
U.S & Israel
Economic Interest
Resources
Standardization
Regulatory
Process
Operational
Cultural All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide8. Los b: Non-State Factors: Globalization All Rights Reserved -Mentor Me Careers www.mentormecareers.com Global Trade as % of GDP SOURCE: World Bank Business Dependency<br>
slide9. Los b: Globalisation All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide10. Los b: Threats of Globalisation Gain for company Loss for Country
Lower Environmental and Governance Standards
Political Consequences
Interdependence All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide11. Los c & d:categorisation All Rights Reserved -Mentor Me Careers www.mentormecareers.com Non-Cooperation Globalisation Cooperation Nationalism<br>
slide12. Los c & d: Example Countries All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide13. Los c& d: Characteristics All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide14. Los d: Tools of Geopolitics All Rights Reserved -Mentor Me Careers www.mentormecareers.com Nationalization of export
Foreign investment restrictions
Economic Sanctions
Export Subsidies Multilateral trade Agreements
Economic and Monetary Union
Common Market Voluntary Export Restraints
Domestic Content Requirements
Espionage
Terrorism
Armed Conflict Trading Blocks (USMCA)
NATO( North Atlantic Treaty Organization) Globalization Nationalization Cooperation Non- Cooperation<br>
slide15. Los d: U.S All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide16. Los:d Case Study U.S primarily stated the disbanding of Saddam Hussain as the primary reason for conflict.
Today U.S imports $3.8 Bn in crude Oil from Iraq All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide17. Los d:Case Study U.S sanctions against Venezuela since 15 years
In March 2022 U.S .S. officials demanded Venezuela supply at least a portion of oil exports to the United States as part of any agreement to ease oil trading sanctions on the OPEC member nation, two people close to the matter said.
Source: Reuters
the U.S Defended Kuwait during the Gulf War
U.S imports $1.2 Bn In Oil minerals
U.S Imports $1.5 Bn in oil from Libya( U.S armed conflict in 2015-19 against ISIL)
U.S & Saudi Arabia have been long-standing partners for mutual benefits All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide18. Los d: Syrian Crisis & Germany Response Syrian crisis started in 2011 post violent government crack down on public demonstrations resulting in civil war
As a result of ongoing conflicts, 6.6 million Syrians fled the country
Germany announced that it would admit 1.1 million refugees
Was not supported by neighboring countries
Germany benefited in the long run-lower labor costs
Improved demographic balance of the young population All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide19. Los d:Types of Geo-Political Risks for Investments Event Risk
Elections
New Legislations
Example: U.K’s referendum on EU, most expected a No vote but ended opposite.
10 Year Govt Bonds dropped
1ST Day -21%
30 days -42%
1 Year -25% All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide20. Los d:Other Risks Exogenous Risk
Japan Earthquake 2011 caused a Nuclear Accident
Equities declined 20% from March to Nov 2011
Thematic Risks
Cyber attack- Equifax data breach 2017
Sep 2017- Credit reporting company reported a data breach of 147 Mn people
Equifax stock fell by 13.7% and 34.9% in a week All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide21. Los d: Assessing Geo-Political Threats All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide22. Los d: Assessing Geo-Political Threats All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide23. Los d: Assessing Geo-Political Impacts Scenario Analysis
How likely is the event
What’s the worst outcome of it
Signposts
Creating indicators, data piece or event
March 2015 the Brexit phone pole suggested a “Leave Vote” All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
Version 2023 Study Session 3<br>
slide2. Learning Outcome Statements The candidate Should be able to:
describe geopolitics from cooperation versus competition perspective
describe geopolitics and its relationship with globalization
describe tools of geopolitics and their impact on regions and economies
describe geopolitical risk and its impact on investments All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide3. Los a: Geopolitics Geopolitics- the study of geography and its effects on politics and trade.
Trade relations
Agreements
Policies
See the table to the right given by the Thomson data stream on how various wars affected returns. All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide4. Los a: Geopolitical Risks Russia Ukraine Conflict: Case study
Total of $139 Billion assets are stuck in Russia
$79 bn in Debt
Companies leaving Russia are leaving 47% of GDP Of Russia
Hence it’s important that Geopolitical risk be studied as a part of investments All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide5. Los a: Relationship Complexities Example All Rights Reserved -Mentor Me Careers www.mentormecareers.com Russia India U.S Ukraine Close Ally Ally Close Ally Attacks Pressure Pressure Oil Imports
NPK Fertilizer
Defense Deals
Diplomacy Against China Disclaimer: The diagram is just a hypothetical depiction of Geo political cooperation complexities, we are in no way expressing any opinion on the current scenario. Readers are advised to use it only for education purposes.<br>
slide6. Los a: Features of Political Cooperation All Rights Reserved -Mentor Me Careers www.mentormecareers.com Source: New York Times<br>
slide7. Los a: Motivations for Cooperation National Security or Military Interest
South Korea and the U.S
India & Russia
U.S & Israel
Economic Interest
Resources
Standardization
Regulatory
Process
Operational
Cultural All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide8. Los b: Non-State Factors: Globalization All Rights Reserved -Mentor Me Careers www.mentormecareers.com Global Trade as % of GDP SOURCE: World Bank Business Dependency<br>
slide9. Los b: Globalisation All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide10. Los b: Threats of Globalisation Gain for company Loss for Country
Lower Environmental and Governance Standards
Political Consequences
Interdependence All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide11. Los c & d:categorisation All Rights Reserved -Mentor Me Careers www.mentormecareers.com Non-Cooperation Globalisation Cooperation Nationalism<br>
slide12. Los c & d: Example Countries All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide13. Los c& d: Characteristics All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide14. Los d: Tools of Geopolitics All Rights Reserved -Mentor Me Careers www.mentormecareers.com Nationalization of export
Foreign investment restrictions
Economic Sanctions
Export Subsidies Multilateral trade Agreements
Economic and Monetary Union
Common Market Voluntary Export Restraints
Domestic Content Requirements
Espionage
Terrorism
Armed Conflict Trading Blocks (USMCA)
NATO( North Atlantic Treaty Organization) Globalization Nationalization Cooperation Non- Cooperation<br>
slide15. Los d: U.S All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide16. Los:d Case Study U.S primarily stated the disbanding of Saddam Hussain as the primary reason for conflict.
Today U.S imports $3.8 Bn in crude Oil from Iraq All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide17. Los d:Case Study U.S sanctions against Venezuela since 15 years
In March 2022 U.S .S. officials demanded Venezuela supply at least a portion of oil exports to the United States as part of any agreement to ease oil trading sanctions on the OPEC member nation, two people close to the matter said.
Source: Reuters
the U.S Defended Kuwait during the Gulf War
U.S imports $1.2 Bn In Oil minerals
U.S Imports $1.5 Bn in oil from Libya( U.S armed conflict in 2015-19 against ISIL)
U.S & Saudi Arabia have been long-standing partners for mutual benefits All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide18. Los d: Syrian Crisis & Germany Response Syrian crisis started in 2011 post violent government crack down on public demonstrations resulting in civil war
As a result of ongoing conflicts, 6.6 million Syrians fled the country
Germany announced that it would admit 1.1 million refugees
Was not supported by neighboring countries
Germany benefited in the long run-lower labor costs
Improved demographic balance of the young population All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide19. Los d:Types of Geo-Political Risks for Investments Event Risk
Elections
New Legislations
Example: U.K’s referendum on EU, most expected a No vote but ended opposite.
10 Year Govt Bonds dropped
1ST Day -21%
30 days -42%
1 Year -25% All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide20. Los d:Other Risks Exogenous Risk
Japan Earthquake 2011 caused a Nuclear Accident
Equities declined 20% from March to Nov 2011
Thematic Risks
Cyber attack- Equifax data breach 2017
Sep 2017- Credit reporting company reported a data breach of 147 Mn people
Equifax stock fell by 13.7% and 34.9% in a week All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide21. Los d: Assessing Geo-Political Threats All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide22. Los d: Assessing Geo-Political Threats All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>
slide23. Los d: Assessing Geo-Political Impacts Scenario Analysis
How likely is the event
What’s the worst outcome of it
Signposts
Creating indicators, data piece or event
March 2015 the Brexit phone pole suggested a “Leave Vote” All Rights Reserved -Mentor Me Careers www.mentormecareers.com<br>