Global Shocks Push Geoeconomics to the Center Stage at Foreign Policy Forum

Frank McCourt, founder of Project Liberty, speaking with Foreign Policy CEO Andrew Sollinger at the Geoeconomics Forum. Credit: IPS

By Umar Manzoor Shah
SRINAGAR, India, Apr 17 2026 (IPS)

As war in the Middle East ripples through global markets, policymakers, economists, and industry leaders gathered in Washington this week to agree that economics is no longer separate from geopolitics. It is now its core instrument.

At the Geoeconomics Forum hosted by Foreign Policy alongside the Spring Meetings of the International Monetary Fund and World Bank, speakers repeatedly pointed to a world shaped by shocks, where supply chains, energy flows, and technology have become tools of power.

“Geoeconomics is no longer a backdrop to global politics. It is the key and critical element,” said Foreign Policy CEO Andrew Sollinger in his opening remarks.

The urgency of that shift is tied closely to the ongoing conflict in the Gulf, which has disrupted energy markets and exposed vulnerabilities in global trade systems. The war has made the world understand how quickly regional crises can cascade into worldwide economic instability, affecting everything from fuel prices to industrial production.

Participants at the forum described a transformed global order where governments increasingly deploy economic tools once considered neutral or technical.

Trade policy, capital flows, and supply chains now serve strategic goals. Critical minerals, essential for semiconductors and artificial intelligence systems, have become geopolitical leverage points. Energy routes such as the Strait of Hormuz have turned into potential choke points with global consequences instead of just transit corridors.

“Geopolitics and economics have always been linked. We are going back to a school of thought that sees them as inextricable,” Jacob Helberg, U.S. Under Secretary for Economic Affairs, said in his address.

Helberg pointed to growing competition over rare earth minerals, where China dominates processing and has begun using export controls as a strategic tool. At the same time, logistics corridors and manufacturing hubs have emerged as additional pressure points in the global system.

“The stack is totally interlinked,” he said, referring to the chain from raw materials to finished technology. “There are choke points at every layer.”

The forum repeatedly returned to a central theme: fragmentation.

Countries are adapting to a “shock-prone” world marked by conflict, pandemics, and financial instability. This has led to a shift away from global integration toward more regional and strategic economic blocs.

Middle powers, in particular, face difficult choices. As competition intensifies between the United States and China, many nations are weighing how to align their economic and technological futures.

Dr Pedro Abramovay, Vice President, Programs, Open Society Foundations, argued that the moment offers both risk and opportunity for these countries.

“We need to make sure that middle powers act as middle powers and not just middlemen,” he said, stressing that democracy can shape their role in a changing order.

Abramovay said the current moment has exposed long-standing imbalances in the global system.

“It unveils the reality that existed before,” he said, referring to earlier global arrangements that often did not serve the interests of the Global South.

He noted that domestic political pressure is now reshaping how countries engage globally. Leaders can no longer align externally without responding to internal constituencies.

“That internal pressure can empower those middle powers to assert their sovereignty and negotiate effectively,” Abramovay said.

The forum highlighted growing calls for a reworked international order grounded in sovereignty and public interest rather than narrow economic gain.

“We need to have clear clarity of agenda. We need to have commitment of those leaders expressing that they are there, not representing big corporations or, again, interests and organisations that speak for themselves, but exactly speaking in the name and representing the majority of the world,” Abramovay added.

Frank McCourt, founder of Project Liberty, warned against framing the future as a binary choice between U.S. private-sector dominance and Chinese state-led models.

“This is a false dichotomy,” he said, arguing for a third path that aligns technology with democratic values.

He highlighted growing unease among countries that feel caught between competing systems, noting that many are exploring alternative frameworks for digital governance and economic cooperation.

Human Impact Behind the Strategy
While much of the discussion focused on high-level strategy, speakers acknowledged the human consequences of geoeconomic shifts.

Energy shocks translate into higher costs for households. Supply chain disruptions affect jobs and access to goods. Decisions made in boardrooms and ministries ripple outward to communities worldwide.

“The best-laid plans can be interrupted by unforeseen circumstances. You have to pivot, adapt, and build better,” Sollinger said.

That message echoed throughout the event.

IPS UN Bureau Report