Economic Sanctions: Is There a Point?

This post was authored by Christopher Snook

Economic sanctions are generally categorized as trade sanctions (embargoes, high tariffs, etc) or financial sanctions (freezing foreign assets of the country, freezing aid to the country, blocking foreign investment in the country, etc). The rationale behind using these tools is that a country has their economic activity restricted and this in turn puts pressure on the government to ‘play ball.’

Democrats and some Republicans have championed the use economic sanctions against Russia and others made by the Obama administration as a powerful tool of negotiation relative to the use of military force. President Obama is though, just one of many U.S Presidents who have resorted to economic sanctions as a manner of punishing regimes our country has deemed troublesome. So the United States puts economic pressure on dastardly governments, they kowtow, and what’s to not like?

Well, there is just one teeny tiny problem: economic sanctions rarely work.

As is common with most aggressive foreign policies, the results are often the opposite of what was intended. Cuba has remained Communist for decades despite harsh U.S sanctions, and has even given their government a scapegoat to explain their poor economic situation. The same can be said for North Korea. Sanctions on Iraq did not prevent a U.S led invasion and despite the West’s ‘best’ efforts, Vladimir Putin’s power in Russia is stronger than ever.

The reason economic sanctions do not work can be summarized by the former UN Secretary General Kofi Annan, in the Millennium Report: “When robust and comprehensive economic sanctions are directed against authoritarian regimes, a different problem is encountered. Then it is usually the people who suffer, not the political elites whose behaviour triggered the sanctions in the first place. Indeed, those in power, perversely, often benefit from such sanctions by their ability to control and profit from black market activity, and by exploiting them as a pretext for eliminating domestic sources of political opposition.” In fact, within the same report it was deemed only 1/3rd of all economic sanctions resulted in ‘partial success’ with only 1 in 20 sanctions actually succeeding. The average blackjack player has a better chance of winning (~46%) than an economic sanction has of succeeding, even marginally.

The sanctions against Russia in 2014, in response to Russian aggression in Ukraine, caused a massive recession in Russia. At what cost though? The strengthening of Putin’s regime, the further impoverishment of the Russian people, and worsening relations between two nuclear armed States? And what exactly was gained? Ukraine still has a civil war and Crimea is still owned by Russia. It looks like those in the Obama Administration can add those sanctions to the 2/3rds of completely ineffectual sanctions.

Outside of what is clearly an ineffectual policy, what moral basis does anyone have to support these sanctions. The explicit goal of an economic sanction is to hurt the economy of the target country, and everyone knows who receives the brunt of economic hardship: the poor. I find it morally reprehensible that the richest countries on earth so happily participate in policies that serve in further impoverish already impoverished people. Could you imagine the uproar people would have if the state of Michigan embargoed Detroit because of actions on behalf of its city council? Yet, people sit comfortably in their temperature controlled houses, with all the modern amenities one could desire, gladly championing these sanctions because no one seems to accept or acknowledge the suffering economic sanctions cause, nor grasp how ineffective they ultimately are.

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