State actors, notably China and Russia, are increasingly seeking to achieve strategic gains via hybrid operations in the economic and financial (E&F) domain, masked as benign commercial activity in the international financial and trading systems.
Over the past two decades, authoritarian state actors have increasingly exploited legitimate international trade and financial systems to further their geopolitical ambitions and exert influence. While economic and financial sanctions are more widespread and varied, so too are the measures taken to circumvent them, including the potential use of cryptocurrencies, de-dollarization, and other strategies.
Competitors and adversaries of the United States and its allies routinely employ economic and financial (E&F) manipulation tactics in the form of fostering inordinate dependencies, embargoes, acquiring strategic infrastructure and assets, cyberattacks, debt-traps, and other “nation-capture” activities. These tactics are designed to undermine rules-based market competition and democratic institutions. For example, Russia’s new brand of hybrid or unconventional warfare has a major E&F component that is roughly on par with its more visible and better-understood political/military dimensions.
PSSI Washington has long recognized this reality and, in 2006, established a program dedicated to educating the security communities and militaries of allied nations, as well as academia, industry and non-governmental organizations, concerning the various modalities of E&F statecraft. The program particularly focuses on the strategic use by prospective adversaries of their forward-deployed state-controlled enterprises.