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US Army War College

MAJ Ryan J. Orsini – “Economic Statecraft and US-Russian Policy”

Released  7 June 2022.

This podcast assesses the American-Russian economic relationship, identifying how Russia exploits strategic asymmetries to gain advantage in the space below armed conflict and how the United States can modernize its economic statecraft. It draws upon a wide range of comparative research, from US-Russian military thought to the American-Eurasian economic interrelationship, to evaluate the full range of economic statecraft within a single dyad of countries in the context of coercion theory. This analysis will assist American policymakers in reforming priorities and processes according to principles of economic statecraft to sustain ongoing American coercion and set conditions for advantage upon the return to bilateral competition.

Click here to read the article.

Keywords: geo-economics, economic statecraft, Russia, gray-zone warfare, hybrid warfare, geopolitics

Episode Transcript

 Stephanie Crider (Host)

Welcome to Decisive Point, a US Army War College Press production featuring distinguished authors and contributors who get to the heart of the matter in national security affairs.

The views and opinions expressed on this podcast are those of the podcast guests and are not necessarily those of the Department of the Army, US Army War College, or any other agency of the US government.

The guests in speaking order on this episode are:

(Guest 1: Ryan J. Orsini)

(Host)

Decisive Point welcomes Major Ryan J. Orsini, author of “Economic Statecraft and US-Russian Policy,” which was featured in the summer 2022 issue of Parameters. Orsini is a US Army infantry officer assigned as a student at the Command and Staff General College (Command and General Staff College) at Fort Leavenworth, Kansas. He holds a master of public policy degree from Georgetown University. Ryan, I’m glad you’re here. Thanks for joining me today. Let’s talk about the US, Russia, and economic statecraft. Please lay the groundwork for us. What is your working definition of economic statecraft for this scenario?

(Orsini)

Thank you for the question. Thank you for having me. So, put simply, economic statecraft is the use of a nation’s economic means in pursuit of either geopolitical or domestic goals. That’s everything from trade policy, industrial policy, sanctions—it’s a big bucket. Now, here, I address a small portion. So I’m speaking, specifically, the US-Russian dyad and a particular spot on the conflict spectrum: the gray zone, the space between peace and war.

But, really, I’m addressing two fundamental questions: first, how Russia uses its economic means, both licit and illicit, to sort of punch above its weight class and garner international influence, extracting these gains despite US deterrence policy and overall advantage in economic means. And then I ask, “What can the US do to leverage the economic instrument and really achieve the coercion it desires?” So I put forward the policy recommendation of domestic coordination, international cooperation, and transatlantic transparency.

(Host)

Well, let’s break it down. Walk us through them. Let’s start with domestic coordination. What needs to happen here?

(Orsini)

So US economic statecraft—it often lacks unity of effort. Its authorities and its resources are spread across branches of government and the interagency. What does this look like in practice? Well, first, it’s organization. Identifying a lead agency or task force. There are lots of options. I propose some, but, really, this agency serves a couple critical roles: assessing the changing Russian vulnerabilities to US economic leverage over time, evaluating the effectiveness of US policy over time, and ensuring that coordination across the interagency of the statecraft.

Second is priority. Unlike in the defense community, there is no overriding document. There’s no national defense strategy guiding the economic tool. And also it’s about economic lines of effort. For instance, in this new era of great-power competition, how do we prioritize counterauthoritarian influence operations versus counterthreat finance?

These are guiding principles that can really help guide the overall economic instrument. And, finally, it’s process: creating the legal mechanisms that the interagency can use to enforce antimoney laundering in the modern age to protect both privacy and access to data that it needs to be effective on today’s global stage.

(Host)

International cooperation: What does that look like in your plan?

(Orsini)

I’m looking in particular since the 2014 Crimean crisis. And if you look in the snapshot, the US economic statecraft has often lacked the broad international enforcement or has failed to maintain it over time. And, ultimately, this dilutes or nullifies intended effects of economic statecraft. So what does this look like? Really, it’s working with like-minded international bodies, political, economic, intelligence agencies. And the key is to work within the current overall Eurasian politic.

So I offer a mix of positive and negative economic inducements. We often forget that economic statecraft is also positive inducements—how to prioritize sanctions and sanctions relief. And, ultimately, the big goal here is to align the incentive structures and build resilience for other states from Russian influence.

(Host)

Your final point was transparency, and I need to point out it’s not just about dollars and rubles exclusively. This included Bitcoin, (Instrument in Support of Trade Exchanges or) INSTEX, the central-bank digital currencies, and you also mentioned the US Anti-Money Laundering Act of 2020. Can you walk us through this part of your plan?

(Orsini)

So data might not quite be the new oil per se, but it really is the key to understanding Russian influence as well as how effective American statecraft can be against it. And you offered a bunch of mechanisms by which Russia can exploit these blurry legal and financial structures. And that starts here in the US.

We have a myriad of antimoney-laundering laws that help define beneficial ownership across economic transactions. I point to plenty of potential legislation or legislation that is in execution right now.

And why is it transatlantic? Well, the hub of international finance still runs a lot through New York City, London, and Brussels. So at end state, it’s about building actionable attribution and accountability. And these mechanisms within the international community—we can really garner a lot of influence just within our like-minded partners.

(Host)

Before we go, do you have any final thoughts?

(Orsini)

Knowing the readers of Parameters, I’d like to bring this idea of consolidating gains to making temporary advantage enduring. And, you know, there is a nonmilitary aspect to the American way of war. The economic tool usually shapes, and it usually translates advantage into some enduring outcome. But we often build it around a military action. I’d encourage the listeners, wherever you are in the interagency and whatever instrument you are a part of—think about how your piece can support this economic tool. It’s not normally how we think of it, but in a world where deterrence is really our largest contribution, it may be how we focus going forward, and this is a place where Russia has had success. It’s a playbook that they can bring off the shelf and utilize. And so, pending the results of ongoing conflict, it’s something they might likely go back to. It behooves us to look at this environment and shape it while there is a policy opportunity here now.

(Host)

Thank you, Ryan. Listeners, you can read this article, “Economic Statecraft and US-Russian Policy,” to get details about how Russia exploits strategic asymmetries to gain advantage in the space below armed conflict and how the United States can modernize its economic statecraft. Visit press.armywarcollege.edu. Look for volume 52, issue 2.

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Author information:
Major Ryan J. Orsini, US Army, is an infantry officer assigned as a student at the Command and General Staff College at Fort Leavenworth, Kansas. He holds a master of public policy degree from Georgetown University.