Reflections on Power, Diplomacy, and Strategic Foresight

Strategic Illusion: The Mask of the “Troika”

By José Parejo, Founding Partner, José Parejo & Associates

History is not a photograph. It is a structure.

Summits invite illusion. The Shanghai Cooperation Organization gathering this week produced one more: the photograph of China, Russia, and India framed as a new “troika,” aligned to challenge the West. Commentators rushed to call it historic. But history is not a photograph. And strategy is never what it seems in the family portraits of diplomacy.

The Geometry Beneath the Mask

Look closer, and the mask fractures. China seeks to transform scale into systemic primacy, not to share but to dictate. India insists on disciplined autonomy, engaging with all, binding itself to none. And Russia—after more than three years of war against a far smaller neighbor—has revealed limits that no choreography can hide.

A defense industry once feared is now doubted by its own customers. According to SIPRI, its share of global arms exports dropped from around 21 % in 2014–18 to just 11 % in 2019–23, a 53 % decline. India remains a major customer, but its reliance on Russian equipment has fallen: Russian share of Indian arms imports declined from 55 % (2015–19) to 36 % (2019–23). Vietnam—historically dependent on Russian technology for 81.5 % of its arms between 1995–2022—now advances toward self-sufficiency. Meanwhile, Egypt, Algeria, and Indonesia canceled planned Su-35 purchases from Russia in early 2022.

Energy tells the same story. Russian crude trades at $10–15 per barrel below Brent. India and China absorb volumes not out of solidarity but out of advantage—buying cheaply, on their terms. A state once dictating conditions is now compelled to accept them. Inside the Federation, regions with weaker ties to Moscow strain under mobilization and fiscal pressure. In Central Asia, former dependents tilt toward Beijing, Ankara and Brussels. The façade of equality hides a hierarchy of weakness.

I recall works and conversations that framed these risks long before they became headlines. In 2013, I advised a multinational with significant operations in Ukraine that Euromaidan will follow a Russian’s move into Donbass, marking not a frozen conflict, but excuse for the beginning of an offensive narrative. I told them to withdraw immediately.

In 2019, when speaking with another company—one without exposure in Ukraine—I argued the opposite: that I hardly believed Russia would dare a full invasion. Not because I thought Moscow restrained, but because it would be catastrophic for the Kremlin itself. It would place its army in a glass urn before a convinced defender. It would shatter a fraternal bond that neither Russians nor Ukrainians imagined could break. It would damage Russia more than Ukraine, and expose structural deficiencies so severe they could destabilize the state, driving it toward radicalism.

History of Illusions

“Illusions of unity can be staged; structures of power cannot.”

History has seen this play before. The Holy Alliance of 1815 presented Europe as stable, yet fractured within a decade. The Sino-Soviet pact of 1949 promised permanence, but collapsed as soon as national interests diverged.

But illusions matter. They create the belief that systems are stable, until the fault lines rupture. For companies and investors, the cost of misreading is not academic. It is measured in contracts voided, assets stranded, billions written down.

When Rivalries Crushed Companies

• The Suez Crisis, 1956 – Oil rerouted via the Cape added 5,500 nautical miles, tripled costs, and erased profits within weeks.

• U.S.–Iran Hostage Crisis, 1979 – $12 billion in Iranian assets frozen overnight; multinationals lost contracts and receivables instantly.

• Pipeline Sanctions, 1981–82 – Siemens, AEG and others lost hundreds of millions when Washington barred exports to the USSR.

• Gulf War, 1990–91 – Oil doubled from $21 to $46 per barrel; airlines and petrochemicals lost billions.

• Russia Sanctions, 2022 – BP wrote down $25B, Shell $4B, Renault €2.2B, McDonald’s abandoned 850 stores.

The Corporate Blind Spot

Fortune 500 balance sheets can survive write-downs. Insurance covers assets. But insurance does not restore lost time, market share, or reputation.

And yet not every company has those buffers. For every multinational that absorbs a shock, dozens of suppliers and subcontractors vanish along the way—erased by disruptions they cannot hedge and with no path to recovery. The invisible cost of geopolitical rivalry is the silent attrition of those smaller firms on which the system itself depends.

States and the Illusion of Order

The danger of the “troika” illusion is not that it represents a cohesive bloc. It does not. The danger is that rivalry between competing systems escalates, trapping companies in the wrong place at the wrong time—collateral in contests that have little to do with demand and everything to do with power.

States have far more tools to act on private investment than the market narrative admits—regulation, fiscal decrees, national security reviews, or sudden export controls.

“What is called a transparent international order has always been a competition between states, disguised as rules.”

Leaders like Donald Trump, by openly challenging that order, merely exposed what others pursue discreetly: geopolitics never leaves the stage, it only hides behind the language of rules.

A regulation announced at midnight can void contracts by dawn. A sanctions package can strand billions overnight. A sudden alignment in Delhi or Beijing can leave a European manufacturer excluded from a market it thought secure.

Europe’s Exposure

Europe debates “strategic autonomy.” But autonomy is not a communiqué. It is the capacity of firms in Madrid, Frankfurt and Paris to withstand shocks decided in Washington, Beijing or Moscow.

Spain’s IBEX may rally, but prosperity in the index is meaningless if companies cannot absorb the regulatory or political shocks that come from the collision of rival systems.

The Lesson of History

Kautilya wrote in the Arthashastra that every neighbor is a rival and every rival a potential partner. Toynbee reminded us that civilizations collapse not when conquered, but when they fail to respond to challenge. Braudel warned that events are dust; structures endure.

The SCO photograph is an event. The structure is Russia’s weakness, China’s ambition, and India’s refusal to be bound.

Resilience is not the elegance of reaction. It is anticipation of rupture. The companies that endure will be those that prepare not for calm seas, but for the storms already visible on the horizon.

— José Parejo

Founding Partner, José Parejo & Associates

Sunday CEO Strategic Insights | Sept 7, 2025

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