NATO Should be Targeting the Financial Infrastructure of the Enemy
NATO is the most powerful military alliance on the globe; this will not change in 2026. Consequently, the future conflicts involving NATO will be asymmetric. Economic warfare is a tool to both address this changing environment, and respond effectively to future threats and imbalances. Targeting the elements of the financial infrastructure of the enemy will complement and increase the effectiveness of NATO's regular military efforts.
In 2026 a NATO member is attacked. But, the aggressor is not a sovereign state, nor does it have a regular army. Instead, it is a drug cartel in Texas, a Little Green Man in Estonia, or a terrorist cell in Paris. Although extremely diverse, these adversaries share a single denominator – they all depend on the formal economy for their existence. Currently, NATO chiefly focuses on the traditional means of war – tanks, aircraft carriers and missiles – while ignoring economic warfare. Therefore, the Alliance must dedicate resources to economic warfare in order to address the challenges it will face in the future. Targeting elements of the financial infrastructure of the enemy will complement and increase the effectiveness of NATO's regular military efforts.
Let us move back in time for a moment. In 1974 Muhammad Ali fought against George Foreman in the World Heavyweight Championship. No one expected Ali to win; Foreman was the most powerful and hard-punching boxer of his generation, much stronger than Ali. Yet, by outmaneuvering Foreman's strong punches, Ali managed to secure victory through perseverance and patience. During the fight Ali said to Foreman "George, you're not hittin'", and in the recording it appears as if Foreman is merely tapping Ali. This story of Ali and Forman is used by American academic Ivan Arreguin-Toft to illustrate his theory of asymmetric conflict in his book How the Weak Win Wars; powerful armies have, after all, won far less often than we would expect. Arreguin-Toft puts motivation to win and ability to employ full force as key aspects behind great powers failing in small wars.
The threats to NATO that can be anticipated for the coming decade — hybrid war, terrorism and organized crime — are a novelty, but not a major surprise. The key question is whether NATO is sufficiently addressing these issues: the answer is no. I have written that formal economy is the common denominator that connects the "weak" actors that will be among NATO's enemies in the coming decade. Let us look at the recent examples: ISIS generates income from taxes, and the sale of oil and antiques, rebels "collect taxes" in the occupied region of Ukraine, organized criminal groups arrange human smuggling via the Mediterranean. These all require a level of economic activity carried out by local population. Hence, the stability of the aforementioned groups depends on two factors: lasting chaos, and the ability to extract and redistribute wealth. Although NATO has developed capabilities to help state-building efforts – an effective strategy for failed states – it does not have the tools to engage in economic warfare. In 2012 NATO introduced economic analysis, but only on the macroeconomic level. The financial infrastructure aspects, for example terrorist group financing, are ignored. I would argue that to stop cash from flowing can be equally deadly for a Libyan smuggler as an attack from a drone.
NATO is the most powerful military alliance on the globe and this will not change in 2026. Consequently, the future conflicts that will involve NATO will be asymmetric. For this reason, NATO must avoid being like George Foreman; knocked out by an opponent after a long fight, because he has failed to notice that the structural features of the game have changed and that his advantage – brute strength – is neither sufficient nor necessary to secure a victory. The power that NATO enjoys does not imply that it will be more likely to win the future conflicts. In contrary, historical data suggests the opposite. And effectiveness is the source of NATO's legitimacy. Reducing opponent's pull-factor and capabilities by targeting the financial infrastructure and available resources addresses the issue of asymmetry that will inherently hinder NATO's future operations.
Some may argue that what will surprise NATO in the coming decade is a major cyber-attack, humanitarian disaster in Africa, a war in the South China Sea, political turmoil in Russia, North Korea or Iran in possession of a nuclear weapon or a major Indo-Pakistani conflict. These are terrifying prospects, but we are perfectly aware of these "surprises". In fact, NATO has already begun to hedge against these risks. Moreover, they represent the class of events that NATO was created to address. But the ability to act and succeed does not hold true for threats far more subtle, but potentially aimed directly against the members of NATO: hybrid war, terrorism and organized crime.
NATO must be hittin'. We cannot afford to turn our capabilities into a structural disadvantage. NATO, due to its great power, shapes its enemies and forces them to adopt new strategies. Economic warfare is a tool to address this changing environment and respond effectively to future threats.
Dawid Walentek is a PhD Candidate in Political Science at the University of Amsterdam. He is interested in trade policy of the EU and the US.
This article has been submitted for category A "Preparing NATO for 2026" of the competition "Shaping Our NATO: Young Voices on the NATO Summit". Comments are most appreciated. You can also read the other articles in this category. Learn more about this competition and how you can submit your own text or video in the categories B, C, D.
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