Economic Sanctions, The Ethical- And Human Costs Exceed The Benefits

Since the early 1980’s the U.S. has used the “economic weapon” of sanctions as a moral legitimacy argument for their causes and for the political outcomes the U.S. Government seeks to accomplish. The case can be made sanctions are a moral choice, but also have led to the excesses of liberal sanctionism, which today has become a feature of the economic, political and social landscape.

The use of economic sanctions in order to coerce nations is not new in foreign policies. Thucydides and Plutarch provide accounts of what is arguably the earliest recorded use of economic sanctions: the “Megarian Degree” of 432 BC, passed by the Athenian assembly embargoing all trades between Megara and the Athenian empire.

The Megarian Decree was an act of revenge by the Athenians for the treacherous behaviour of the Megarians some years earlier. The case has been made by some historians that the Megarian Decree ultimately helped to prolong and intensify of the Peloponnesian War (431-404 BC).

The present day sanctions are mostly used by the US and other developed nations with the aim to pressure leadership of transgressor nations to respect international law and follow internationally acceptable ethical norms, an instrument preferable to and more economical than military interventions or war. When following Carl von Clausewitz “war is the continuation of politics by other means,” then sanctions are the continuations of politics by economic means.

Also sanctions are an instrument of change more acceptable to the general public, as we seem to be living at a time when our arguments are too often justified by passion rather than reason and these expressions of moral outrage by politicians are well received and are welcomed by the common populace.

In this regard sanctions have become a form of political postering, but do not offer an universal answer to foreign policies issues and in fact are contra-productive to finding answers to the serious issues our global village is faced with (climate change, pandemics, food shortages and inequality), issues which threaten the survival of our so called civilization and which cannot be resolved by excluding countries from our global equilibrium.

Sanctions are relatively low-cost measures and include restraining economic, cultural, political and diplomatic links with states that deemed to possess objectionable behaviour are used as a tool of coercion to pursue foreign policy objectives and can be justified in some instances.

Sanctions are an attempt to crush the economy and decrease the currency value of the target state. But at the same time transgressor nations can prepare and adjust to the circumstances and sanctions encourage illicit trading- and money laundering activities and affect access to food, medicine, and sanitation supplies. As a result sanctioned countries can be faced with fuel shortages, hyperinflation, declining public health conditions and resulting in increased poverty.

The case can be made sanctions are never a very useful instrument for to realize change and once implemented take years to influence policies and are difficult to suspend.

The UN sanctions against Rhodesia 1962 and South Africa in 1965 confirmed this, just like the U.S. sanctions against Cuba (1958 -unilateral) and India (1998), Iraq (1990), Iran (1979, 1995), North Korea (1950, 1998, 2005), Pakistan (1977, 1991, 1998, 2017), Russia (1948, 1980, 2014), Syria (2011) and Venezuela (2015) did not achieve their objectives.

The sanctions against India, Pakistan and North Korea did not stop the development of nuclear weapons, the Cuban embargo, the sanctions against Iran, Iraq, Syria and Venezuela did little to inspire regime change or influence a policy shift and the sanctions against Russia from 1947 onward did not encourage a policy shift and the sanctions since 2014 against Russia interests did nothing to stop the invasion in Ukraine.

Economic sanctions, are often targeted at countries already facing economic distress, are not free of ethical and human costs, they do indiscriminate and disproportionate harm, which human costs in most cases far outweigh the likely benefits and go far beyond their initial purpose.

Although economic sanctions are targeted at the ruling class, their influence on political leaders is relative, but mostly impact and deteriorate the living experience of the vast majority of the people which were meant to be protected. This are the most valuable in society, and are particular harmful for children, women other vulnerable groups.

The case can be made sanctions negatively impact human rights, increase authoritarianism and exacerbate human rights violations, and, at worst, can kill more people than the wars they are purported to supplant.

The longer period sanctions are enforced the less successful they become (Cuba, Iran, Myanmar, Russia, Sudan) and the more reluctant the sanctioning party is to suspend sanctions and admit failure. Sanctions have mostly a symbolic function and the efficacy of sanctions is debatable and can have unintended consequences.

After the dissolution of the former Soviet Union (1991) and the U.S. emerged shortly as the single most powerful nation, sanctions increased substantially, but have almost never succeeded in stopping the unethical behavior of transgressor states.

The explosion of sanction since President Bill Clinton confirmed sanctions are part of the U.S. foreign policy instruments to promote American power and protect American security interests and primacy in the world, although today the question is not if the current world order will be changed, but what will replace the world order.

This is evidenced by U.S. sanctions against China and proposed sanctions and imposing tariffs against Europe. It’s thereby worth noting the US sanctions more countries than the U.N., and all other countries sanctioned together.

Like his predecessor President Clinton also President George W Bush used key regulatory tools to cut off access to the U.S., financial system in order to disrupt malicious financial activities. President Obama used sanctions to achieve a more broader objective: to deter aggressive actions towards the U.S. and its interests.

President Biden,  like his predecessor  President Obama uses coercive sanctions to facilitate regime change in Moscow as expressed in late March 2022 in Warsaw. He stated that his Russian counterpart, Vladimir Putin, “cannot remain in power,”  although the White House quickly sought to downplay the U.S. leader’s remarks, noting that Biden was not calling for “regime change” in Moscow.

With his remarks President Biden lifted the fog from U.S. motives and objectives, overstated the treat faced by the U.S. and underestimated the challenges of changing the regime.

The expansion of the sanction against Russia has further destabilized the world economy with increasing geo-political tensions and inflation surging to its highest level in decades. The combination of geopolitical tensions, supply chain disruptions, and rising interest rates threatens to plunge the global economy into recession in the first quarter of 2023. These changes affect individuals, companies, and governments—economically, socially, and politically.

This is taking place in an already fragile international environment with conflicts and increasing power competition. The U.S.-China rivalry together with increasing U.S. influence on the Eurasian Balkans is part of the raging war in Ukraine. There are other contests involving powers such as India, Pakistan, Turkey, the Gulf states, Iran, and others.

Without question the economic costs are highest in Russia, but de sanctions are a two sided sword. Europe as formerly Russia’s fifth largest trading partner has been severely impacted since 2014 and is paying the economic price with higher energy and food prices, rising inflation and possibly stagflation, which is  simulating the rise of extreme right forces and is increasing the poisons of nationalism in Europe.

The broad implications of this economic war against Russia will likely last longer than the conflict itself and will take us back to the 1973 oil crisis.

Nevertheless, the history of sanctions during the last 60 years have shown to be a resounding failure to realize change, due to growing interdependency between markets & countries. According to the study of Robert A. Pape (1997) of the University of California only up to <5 % of the 40 analysed sanctions have proven themselves to be successful.

UN sanctions against authoritarian regimes have proven themselves even less successful and are not free of ethical costs as the Iraq and Iran sanctions have shown. However sanctions have proven themselves more successful when they are used between friendly states.

Next to influencing behaviour and policies of people, companies and countries the conclusion is warranted they are used as a foreign policy instrument to promote American power and advance and protect American hegemonic interests and facilitate and support U.S. regime change strategies.

Since the overthrown of Prime Minister Mohammed Mossadegh of Iran in 1953 the strategy of regime change has been used frequently by the U.S., driven by a combination of idealism, naiveté and arrogance whereby American governments have assumed the right to influence elections and topple governments often with disastrous results.

But according to David S. Cohen and Zoe A.Y. Zoe in their article “Sanctions can’t spark regime change” the logic of  coercive sanction does not hold when the objective of the sanctions is regime change because the cost of relinquishing power will always exceed the benefit of sanction relief.

This type of U.S. overreach, particularly involving secondary sanctions that target entities from third-party countries that do not comply with the sanctions at issue, have reduced U.S. influence and have caused Europe to look at US interference in the affairs and interests of the European Union and both the EU and China are actively looking to limit their exposure to the dollar and the U.S. financial system.

The sanctions against Russia, instead of a more prudent, restraint and less confrontational approach have undermined the yearlong objective of integrating Russia with its population of 140 million people into the global economy and have brought Russia and Europe closer to war.

By targeting the financial institutions, channels, swift and weaponizing of the US currency, the “nuclear option” with massive implications to the economic eco system, not only in Russia, but worldwide impacting the world economy.

Preventing Russia from making debt repayments with dollars held in U.S. banks, a measure designed to deplete Russia’s international currency reserves, have shown other countries the danger of holding gold and dollar reserves in U.S. financial institutions, just as integrating financial institutions into a American led system, with unlimited access to strategic information can be viewed as a hazard.

As a consequence, alternatives to the USD-based financial ecosystem are no longer inconceivable, with settlement of trade transactions next to Euro’s  taking place in Russian roubles and Chinese renminbi. Alternatives to Swift such as China CIPS and new digital currencies will also impact global capitalism and the world order.

At the same time this has led to increased consensus in the strategic cooperation between China and Russia, which has become deeper and more comprehensible, encompassing security, economic, technology and global governance.   

These developments in the Sino-Russia axis are significant and are based on resentment and contempt both nationalistic and authoritarian regimes share for the liberal order of the west and on Russia’s willingness to accommodate China’s greater power ambitions.

The sanction against Russian interests show a world divided between on the one side the industrialized and on the other side the neutral and non-aligned countries. The majority of the countries, including the BRIC countries do not follow the sanctions and as a consequence the west is losing influence in Africa and Latin America, in favour of China and to a lesser extend Russia.

The case can be made the sanctions path against Iran, Russia and also China is dubious and will have as a long-term effect that U.S. led sanctions are losing their sting, influenced by the alternatives to the U.S. led financial eco system. In time  sanctions will in many instances become even more ineffective than today.

Today, with the overuse of sanctions, lack of sanction relief, fallen deterrent the  effectiveness of economic sanctions has diminished. This begs the question, how will governments or political elites which engage in objectionable behavior be encouraged to follow international norms and how can states be pressured to influence a policy shift.

No doubt  in the absence of restraint, diplomacy, compromise and engagement this will lead to the increase of military interventions and to more political instability, in a world that does not have a lack of them.

WJJH

25/11/2022