Learning Module 5
Introduction to Geopolitics
Key Outcomes Summary & Practice Problems
What you must be able to do
Curriculum Year: 2026
Describe geopolitics from a cooperation versus competition perspective.
Describe geopolitics and its relationship with globalization.
Describe functions and objectives of the international organizations that facilitate trade, including the World Bank, the IMF, and the WTO.
Describe geopolitical risk.
Describe tools of geopolitics and their impact on regions and economies.
Describe the impact of geopolitical risk on investments.
1 · Cooperation vs Competition
State Actors — National governments, political organizations, country leaders that exert authority over national security and resources.
Non-State Actors — NGOs, multinational companies, charities, influential individuals who participate in global affairs but do not directly control national security.
Political Cooperation — Countries work together toward shared goals (security, economic, cultural). Involves rules standardization, tariff harmonization, free flow of information.
National Interest — A country's goals and ambitions; often a hierarchy with survival at the top, nice-to-have elements lower.
Soft Power — Influencing another country's decisions without force or coercion (e.g., cultural programs, exchange programs).
2 · Globalization
Globalization — Process of interaction and integration among people, companies, and governments worldwide. Marked by trade, capital flows, cultural exchange.
Motivations — Increasing profits (sales or cost reduction), access to resources and markets, intrinsic gains (learning, cultural exchange).
Costs — Unequal gains, lower environmental/social/governance standards, political consequences, interdependence (supply chain risk).
Threats of Rollback — Deglobalization due to nationalism, trade wars, supply chain disruptions (e.g., COVID-19).
3 · International Organizations
IMF — Ensures stability of the international monetary system; provides loans to countries with balance of payments problems; monitors exchange rates and economic policies.
World Bank — Helps developing countries fight poverty and enhance economic growth through low-interest loans, grants, and technical expertise.
WTO — Provides legal and institutional foundation for multinational trading system; regulates cross-border trade; settles trade disputes.
4 · Archetypes of Country Behavior
Political self-sufficiency with little external trade; state-owned enterprises control strategic industries. High geopolitical risk.
Regional or global leader using political/economic influence to control resources; sets rules for others.
Mutually beneficial trade relationships and extensive rules harmonization; private firms integrated in global supply chains (e.g., Germany, Singapore).
Cooperation between two countries; one-at-a-time agreements without multiple partners; often regional.
5 · Tools of Geopolitics & Geopolitical Risk
Armed conflict, espionage, military alliances. Direct or indirect coercion.
Trade agreements, tariffs, nationalization, voluntary export restraints, domestic content requirements.
Currency restrictions, capital controls, sanctions, foreign investment limits.
Types of Geopolitical Risk — Event risk (known dates like elections), Exogenous risk (sudden, unanticipated), Thematic risk (evolving, e.g., climate change, cyber threats).
Assessment — Likelihood, velocity (speed of impact), and size/nature of impact.
Scenario Analysis & Signposts — Use of scenarios and indicators to monitor and prepare for risks.