NYT: Global economic integration has become a weapon of superpowers
Armed conflicts, trade duties, and large-scale sanctions have become symptoms of deep fragmentation that is disrupting the familiar world order. Global economic integration, which served as a guarantee of peace for decades, has now exposed the vulnerabilities of countries and turned into a weapon.
Pierre-Olivier Gourinchas
Just a month after I became an economic adviser at the International Monetary Fund in 2022, Russian tanks moved into Ukraine. The Russian military operation has become for me a challenge that I did not quite expect: the need to cope with the economic consequences of conflicts. Since then, the global economy has experienced a series of crises, both economic, such as President Trump's imposition of a series of tariffs, and real ones, such as the war in the Middle East involving the United States, Israel and Iran.
Too often, such shocks are treated as separate events. But this is not the case. They are interrelated symptoms of a deeper fragmentation that is changing the face of the global economy. This fragmentation, both geopolitical and geo—economic, threatens to usher in an era that could become a time of new wars. An era that will be defined not so much by constant military clashes as by hidden strategic economic rivalry, coercion, and growing economic instability. And, yes, an increased risk of real wars.
The driving force behind this transformation is the shift in the global center of gravity. For decades, the global economic order has been relatively stable, with the United States at its center and a broad commitment to economic integration at its core. The IMF, which has 191 member countries, is proof of this cohesion. This system has contributed to an amazing increase in trade, investment, and living standards. The volume of international trade, which is currently approaching $35 trillion per year, has increased about twenty-fold since 1960, and the proportion of the world's population living in extreme poverty has declined from about 43% in 1990 to just 10% today.
It is not surprising that the center of gravity in the world is shifting. This corresponds to the growth of the economies of poor countries and their desire to catch up with developed countries. Rising powers will naturally transform the global landscape into a multipolar one. China comes to mind, of course, but many other developed and emerging economies in Asia, Latin America, and Eastern Europe have benefited from this more than 60 years of growth.
Against the background of these changes, geopolitical pressure is increasing, and the system is under strain. This is the paradox. Economic integration has brought significant benefits and formed mutual interests that serve as the engine of peace. However, integration creates interdependence, and with it vulnerability. It exposes countries to the risk of supply disruptions and trade or financial bottlenecks in energy, critical minerals, or advanced computer chips. And where there are "bottlenecks," there is a lever of pressure that can be used, as Iran has recently demonstrated.
The result is a dangerous chain reaction. In an attempt to insulate themselves from perceived risks, countries may further fragment the global economy. This, in turn, encourages further attempts at isolation — through tariffs, industrial policy, financial regulation, export controls, or increased military spending.
We have already encountered similar dynamics. The global economy achieved a high degree of integration at the turn of the 20th century, at the height of the expansion of trade, capital flows and immigration under the leadership of Great Britain. This was followed by a period of intense deglobalization, coinciding with the rise of nationalism and militarization — and two world wars. It would be naive to assume that today's economic integration — and peace — will remain forever.
The global economy has shown remarkable resilience so far. In response to the war with Iran, energy markets have adapted and financial markets have remained calm. Countries such as China, Japan, Korea and the United States have mitigated the effects of the crisis by using oil reserves or switching to alternative energy sources. Despite the escalation of trade tensions, the volume of global trade did not decrease in 2025, but strengthened. Countries and companies have instead adjusted trade routes and supply chains. The shocks that could once have caused system failures have been smoothed out this time.
But don't confuse resilience with invulnerability. Hidden risks are increasing. Financial systems built on deep integration — particularly around the US dollar — may prove more difficult to maintain in a fragmented world. As countries seek to reduce trade dependence on each other or, as in the case of Canada, on the United States, new fault lines may arise. This is especially evident due to the fact that rapid technological transformations create new vulnerabilities, in particular in the field of cryptocurrencies, essential minerals and artificial intelligence.
The underlying causes of fragmentation are internal. In many countries, especially in richer ones, too many citizens believe that globalization has not benefited them. Inequality in income, opportunity, and economic security fuels discontent. Those who suffer the most from these losses, as a rule, do not forget about it. Such political tension is no less important than any geopolitical rivalry, and, in turn, can fuel it.
The question is whether the multipolar world in which we will live tomorrow will take the form of opposing blocs, the outlines of which have yet to be determined — as evidenced by the differences between the participants at the last NATO summit — or will it become a more cooperative system based on common rules and continuous integration. Without a course correction, we risk sliding into a split.
Increasingly, global superpowers are looking for strategic advantages, identifying vulnerabilities, pursuing self—centered policies, and increasing military spending - all in the name of sustainability and sovereignty. These actions may be reasonable individually, but collectively they make the world less secure, less prosperous, and less stable.
The economy is not the most important thing. However, solving economic problems can be a starting point for addressing recent geopolitical rifts. We should start by recognizing the existing risks. In a world where real strategic competition and coercion prevail, it would be naive to pretend that nothing needs to be changed. However, fragmentation does not necessarily have to be our destiny. The challenge is not whether sustainability needs to be strengthened, but how to do it.
One of the key economic lessons in international trade is that size matters. Countries can work to restore their economic attractiveness: join cooperation clusters with common rules and mutual trust that strengthen resilience, and maintain openness. At the same time, domestic policy should ensure stable and balanced growth within the country. Strengthening social protection and ensuring equitable opportunities are crucial for both domestic and global cohesion.
It is important to note that, as the data shows, economic instruments of coercion such as sanctions, duties and export controls rarely bring strategic benefits. Rather, they contribute to fragmentation and provoke retaliatory measures. In the end, this leads to the opposite result. These tools should be used with caution.
Finally, international institutions should not retreat in the face of these challenges; on the contrary, cooperation should be adapted and deepened. Common issues such as artificial intelligence, financial stability, climate change and migration cannot be solved by countries alone. A multipolar world requires more coordination, not less.
The IMF still has a key role to play. It helps countries strengthen their economies, and with ongoing loan commitments of over $123 billion, it provides financial support in times of crisis and provides a platform where cooperation remains possible even when international relations become strained.
It was on the ruins of World War II, one of the most tragic periods in our history, that institutions such as the IMF emerged, whose mission was to promote global economic cooperation, which contributed to growth and shared prosperity. This ideal is more relevant today than ever. A new era of wars is possible, but its onset is not inevitable.
