The new U.S. administration has taken an unprecedented and controversial step in halting all USAID activities and funding to the World Health Organization (WHO), a decision poised to reverberate globally with potentially catastrophic effects. This abrupt cessation threatens to disrupt the provision of lifesaving antiretrovirals in Africa, undermine support for refugees languishing in South Asia, and cripple health services in war-torn regions such as Ukraine, Sudan, and Myanmar. Established in 1961 by President Kennedy, USAID has grown exponentially to become the world’s largest aid agency, with funding surpassing a staggering $70 billion in 2023. The U.S. also holds the title of the largest contributor to WHO, with an unparalleled $1.2 billion contribution in 2023, underscoring its pivotal role in global healthcare support.
There is no doubt that these measures will be tragic, but adversity, when viewed through the right lens, can serve as a powerful teacher and motivator. It forces individuals to confront their limitations, pushing them to innovate and develop new strategies for overcoming obstacles. This process not only builds character but also leads to lasting advancements. There are stories of communities, entrepreneurs, and everyday individuals alike demonstrating that facing hardships can ultimately lead to remarkable achievements and a deeper understanding of one’s own capabilities.
However, what worries me most is the precedence that such sweeping decisions create in countries yet to experience democracy in its fullest meaning. Should these decisions remain, the impacts will extend far beyond the immediate harm to the recipients of these programs. It signifies what political scientists term the concentration of power, where a single entity exerts dominant control over others. In political contexts, this often pertains to authoritarian regimes or centralized governments, where decision-making is confined to one individual or a select group. This centralization can lead to potential abuses of power, suppression of dissent, and restriction of individual freedoms.
While the idea was to put America first, it did not take too long before the administration realized that these programs were perhaps more beneficial to America in terms of the power and influence they provided globally. With the withdrawal of support and funding from such crucial global initiatives, the U.S. risks diminishing its soft power—an essential tool that has historically helped to foster international cooperation, strategic alliances, and a positive global image. The void left by the U.S. might be quickly filled by other nations, particularly its geopolitical rivals, who are eager to extend their own influence and reshape the global order to their advantage.
The move could also be a strategic response to the rising geoeconomic rivalry between the U.S. and China, reflecting a broader strategy of economic decoupling and the use of financial and technological power in geopolitical statecraft. A 2024 paper, “Finance in the Age of Geoeconomics: Intersections of Finance, Production, and Digital Technology,” by David Bassens, Janelle Knox-Hayes, Karen Lai, Fenghua Pan, and Dariusz Wójcik, provides a comprehensive analysis of how finance has become both a tool and a battleground in global economic conflicts, particularly between the U.S. and China.
Central to the paper is the concept of weaponized interdependence, where financial institutions, digital infrastructures, and supply chains are used as instruments of economic statecraft. Mechanisms like sanctions, trade restrictions, and financial regulations are reshaping global markets. The paper cites the use of SWIFT to freeze Russian assets as an example of how financial networks are now deeply embedded in geopolitical struggles. The reliance of financial institutions on Big Tech infrastructure—such as Google Cloud, Amazon Web Services, and Microsoft Azure—raises concerns about data sovereignty and regulatory control.
The paper brings into focus a new dimension of Global Digital Technology Networks (GDTNs) as a complement to Global Financial Networks (GFNs) and Global Production Networks (GPNs) that have hitherto been potently expanding without any regulatory framework. Finance is increasingly reliant on digital platforms, which depend on semiconductor and energy-intensive infrastructures. The rise of companies like Nvidia, whose chips power AI and cloud computing systems, highlights the deep interconnections between financial markets, digital innovation, and industrial production. Taiwan Semiconductor Manufacturing Company’s (TSMC) critical role in semiconductor manufacturing illustrates the geopolitical vulnerabilities in U.S.-China tensions.
The paper examines these dynamics regionally across Asia, Europe, and the United States. China’s financial and technological rise is explored through its reliance on foreign direct investment, overseas stock listings, and an independent digital ecosystem dominated by firms like Alibaba and Tencent. U.S. policies restricting Chinese access to key markets signal a strategy of economic decoupling. Southeast Asia, with Singapore playing a pivotal role, is emerging as a hub for digital infrastructure.
Europe, while a major financial player, lags in digital technology. The EU’s response has been regulatory, focusing on legislation like GDPR and the Digital Markets Act to counterbalance its dependence on foreign tech providers. Europe may set global standards for platform governance rather than compete directly in finance or technology. Strengthening financial and technological ties with Africa is suggested as an alternative to Europe’s diminishing role in the U.S.-China-dominated digital economy.
In the U.S., financial and technological dominance is strong, but vulnerabilities are emerging. The expansion of AI and cloud computing has increased energy demands, prompting investments in nuclear and renewable energy. Federal initiatives like the Inflation Reduction Act and the CHIPS Act aim to reindustrialize sectors like semiconductor manufacturing and reduce foreign supply chain dependence, facing logistical and geopolitical hurdles. This may explain why President Trump reached out to Saudi Arabia for funds to invest in AI infrastructure. Such strategic moves underscore the importance of securing financial and technological resources, which are pivotal in maintaining a competitive edge on the global stage.
The paper concludes by advocating for nuanced discussions on financial and digital sovereignty, suggesting that the weaponization of finance and technology is not inevitable. Emerging initiatives, such as Singapore’s state-led efforts to integrate finance and technology for economic and social sustainability, offer potential future models. The paper calls for a broader perspective on finance’s role in fostering resilience, innovation, and inclusive economic development. Overall, the paper provides a thought-provoking and timely analysis of the shifting global economic landscape, capturing the deepening entanglements between finance, production, and digital infrastructure while raising critical questions about sovereignty, regulatory power, and the future of global capitalism.
The US administration’s recent measures to suspend USAID activities and funding for the WHO are sad. The analysis, as explored in the 2024 paper “Finance in the Age of Geoeconomics,” reveals the intricate relationships between banking, digital technologies, and global production networks. The report emphasizes the concept of weaponized interdependence and the shifting dynamics across areas such as Asia, Europe, and the United States, advocating for a nuanced approach to financial and digital sovereignty to support resilience, innovation, and equitable economic development. Overall, the changing global economic landscape needs a greater understanding of the role of finance and technology in geopolitical circumstances.
