by Kalpani Gunathilaka Danangalage
Published on The Morning on 12th December 2023.
Economic security and national security are comprehensive concepts open to various interpretations across diverse academic fields, as well as in science, culture, policy, and society. It is crucial to understand the connection between these two concepts due to their significant impact on a nation’s security.
Econ. security & Nat. security
Economic security is a crucial element of overall wellbeing, hinging on stability and predictability. Its interpretation varies, with the International Labour Organisation defining it as basic social security, encompassing health, education, dwelling, information, and work-related security. The International Committee of the Red Cross sees it as the sustainable and dignified fulfilment of essential needs. In essence, economic security denotes the ability of individuals to consistently meet their fundamental needs. Insufficient resources for necessities like food, shelter, and healthcare lead to economic insecurity. This condition has a profound impact on happiness and contributes to societal growth and stability. Nations providing high economic security to citizens tend to exhibit higher levels of happiness. Economic security also assumes significance in the realm of non-traditional security, addressing issues like climate change, resource scarcity, infectious diseases, human trafficking, and large-scale migration. Economic insecurity emerges as a significant non-traditional threat to national security. National security itself is multifaceted, encompassing aspects like defence, counter intelligence, foreign relations, international and internal security. The United Nations defines it as a state's ability to protect its citizenry, while the United States Department of Justice outlines a comprehensive framework involving defence, intelligence, and counter terrorism efforts. K.R. Holmes’s “What is National Security?” extensively examined the components of national security, and defined national security as the comprehensive protection of the entire nation. Emphasising its top priority in shielding the nation and its citizens from external threats, he highlighted the role of the armed forces and safeguarding state secrets. Holmes broadened the scope, asserting that national security encompasses not only defence but also the protection of economic, geopolitical, and other interests.
Interplay between econ. security & nat. security
In the era of globalisation and the increasing economic interconnection observed in recent decades, the nexus between the economy and national security has grown progressively intricate. The wellbeing and adaptability of our nation’s economy are now intricately linked to our national security. Definitions of national security now encompass a substantial economic dimension, making it difficult to separate the lines between economic considerations and matters of national security. Various economic factors and characteristics unique to each country play a pivotal role in shaping their national security. These factors and attributes can encompass a heavy reliance on international trade within vital sectors, minimum restrictions on foreign direct investment, deficits in essential skills like digital literacy, science, engineering, and information and communications technology, as well as a significant dependence on the importation of raw materials. It is imperative to acknowledge that security constitutes a fundamental prerequisite for prosperity, and that conversely, prosperity is a fundamental prerequisite for security.
When a country’s economy is stable and secure, it helps to safeguard the nation’s security. However, if a country’s economy experiences prolonged instability, characterised by soaring unemployment, high inflation, dwindling foreign exchange reserves, sluggish economic growth, and increased poverty, it damages the economic and social wellbeing of its people. This, in turn, creates social unrest within the country, which poses a threat to internal security and, consequently, national security. Social unrest creates vulnerabilities that external parties may exploit, especially when a financially unstable country experiences public dissatisfaction with its governance. Hence, external threats can emerge during such precarious circumstances. According to various definitions, national security encompasses dimensions beyond economic security, including health related security, social and political security, military security, geopolitical security, environmental security, educational security, food security, cyber security, and the challenges of terrorism and extremism. However, it is essential to underscore that economic hardships in a country can exacerbate all these dimensions, ultimately jeopardising national security. Despite its pivotal role, the economic aspect of national security remains under emphasised and lacks the attention it rightly deserves.
The current state
The Sri Lankan economy is grappling with an unprecedented crisis driven by a confluence of internal and external factors. The aftermath of the 2019 Easter Sunday attacks drastically reduced the tourism income, a significant revenue source. The subsequent onset of the Covid-19 pandemic in 2020 exacerbated the economic collapse, escalating healthcare expenses, leading to a surge in unemployment, and reducing foreign remittances. In 2021, a policy decision to ban chemical fertiliser affected the agricultural sector, jeopardising food security. The Russia-Ukraine war which began last year (in 2022) further compounded issues, disrupting the import and export of vital goods like petroleum, wheat, and chemicals, crucial for Sri Lanka's economy. Foreign exchange shortages from debt repayment, reduced tourist earnings, and diminished remittances led to a decline in importing essential goods, causing crises in medicine, fuel, and power. This multifaceted crisis has inflicted a long term economic downturn, escalating unemployment, inflation, diminished foreign reserves, increased foreign debt, social unrest, declining remittances, and a collapse in tourism. All sectors face immense challenges, forcing the closure of emerging businesses due to financial constraints, with employers struggling to meet the payroll amidst rising living costs. The economic landscape is destroyed by a complex web of interconnected issues, demanding comprehensive and strategic interventions for recovery.
How does econ. insecurity threatens nat. security?
During times of economic downturn, the impact is felt by the entire population, regardless of their wealth. However, the extent of this impact can vary, typically resulting in a more pronounced effect on lower and middle income individuals rather than the affluent. Their standard of living declines during these challenging periods, and prolonged economic difficulties prevent them from meeting their fundamental needs like food, housing, and access to healthcare and education. Additionally, they are forced to give up their aspirations due to a lack of financial resources, which can lead to disappointment with the government in power, potentially driving social unrest. In response, people may rise against the government, advocating for a change in the leadership in the hope of a better future. The case of the “aragalaya” (a public movement that sought the ouster of the previous Government led by then President Gotabaya Rajapaksa) in Sri Lanka serves as a notable example of this phenomenon. According to the Centre for Policy Alternatives (CPA) in May of this year (2023), the “aragalaya” is a consequence of an economic crisis burdening the population. They argue that Sri Lanka's economic trajectory in 2022 contributed to a political crisis in the country, stemming from mismanagement and controversial policies that caused an unprecedented economic crisis. Between March and July 2022, Sri Lankans took to the streets to voice their discontent with the existing Government at the time, and what was different about these protests was that they were not tied to a specific political party or a single organised group. People from various backgrounds, including different ethnicities, religions, ages, and genders, participated in these demonstrations, as highlighted by the CPA in their analysis of the “aragalaya”. When economic crises and social unrest coincide, it creates an environment conducive to both internal and external terrorist attacks. Various extremist groups and entities with aggressive intentions towards our nation seize the opportunity during such times, attempting to exploit the social unrest to infiltrate and sow discord within the country.
As economic security is intricately linked to all aspects of national security, a country requires adequate financing with economic stability to safeguard all dimensions of national security. Without economic security, it becomes challenging for a nation to maintain its overall security. Hence, a stable and robust economy is a fundamental pillar in ensuring the comprehensive security of a country, as it underpins the resources and capabilities needed to address a wide array of security challenges and to protect its citizens' welfare and interests.
Conclusion and way forward
Economic security has become an increasingly vital aspect of national security, and these two dimensions are inherently interconnected. Where there is no economic security in a country, its national security is definitely threatened. Therefore, it is imperative to take proactive measures to ensure economic security, thereby strengthening the overall national security. A strong economy serves to protect the people, uphold their way of life, and sustain the people’s power. Rebuilding economic strength domestically and upholding the international economic system will not only enhance security but also advance prosperity and peace. As a significant suggestion to safeguard economic stability, the promotion of tax reform is necessary in creating a fairer, simpler, and pro-growth tax code, encouraging the generation of higher wage jobs and providing tax relief to middle income families. Reducing business tax rates also enhances the competitiveness of corporations. Furthermore, the improvement of infrastructure is another avenue for bolstering economic security. This involves collaboration between the government and private industry to enhance seaports, airports, roads, railways, waterways, and telecommunications. These improvements contribute to environmental wellbeing, national competitiveness, and an enhanced quality of life. According to the weekly economic indicators released by the Central Bank (16 June, 2023), national debt has surged to Rs. 27,849.2 billion by the end of January 2023, representing a significant long term threat to Sri Lanka's prosperity and thereby, to national security. By adopting measures such as reducing spending, modernising the tax system, improving government efficiency, and enhancing global competitiveness for businesses, the economy can expand, making the existing debt more manageable. It is essential to follow high standards in trade and investment agreements pertaining to intellectual property, agriculture, digital trade, labour, and environmental concerns. Sri Lanka should seek partnerships with other nations to expand export markets, encourage free market competition, and stimulate growth in the private sector. Government entities must also enhance their understanding of global science and technology trends and how these trends may influence or undermine programmes and strategies. These steps can be instrumental in boosting the economy while also ensuring economic security within the country, consequently safeguarding the overall security of the nation.
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* Mrs. Kalpani Gunathilaka is a Research Assistant at the Institute of National Security Studies (INSS), the premier think-tank on National Security established under the Ministry of Defence. The opinion expressed is her own and not necessarily reflective of the institute or the Ministry of Defence