Let me cut to the chase, sanctions can end up being more harmful than your average war: they can involve many more countries than two parties to an armed conflict; cause more human suffering and last much longer; inflict more widespread economic loss, impede economic and human recovery; leave more hatred in their wake; and yes, sanctions have hardly ever achieved their intended goal. So what’s so good about sanctions?
First, the optimistic rationale for economic sanctions.
Over the last fifty or so years, an army of academics and politicians from the West have touted economic sanctions as an important instrument of foreign policy that falls between diplomacy and war. Given that diplomacy fails to change the problematic policies of an adversary, economic sanctions are preferred as a substitute. Sanctions are presumed to force a desired change in the objectionable policies of an adversary while avoiding human casualties and limiting physical destruction and adverse economic fallout. How? By putting economic pressure on the elite and or on the general population to force presidents, prime ministers and rulers to change course in order to stay in power and thus save their own skins. A reasonable story, but just that: a story! It is a story that is primarily pushed by political scientists and politicians with economists, their heads in the sand, providing calculations of the partial cost of sanctions.
The U.S. creates enemies for itself. The number of enemies can grow with time as sanctions drag on and on as we have seen in the cases of Cuba, Venezuela and Iran.Let me first admit that I have been wrong in my own assessment of the efficacy of sanctions. As an economist, while I wrote books and articles estimating some of the costs (in trade) to the sender of sanctions (usually the U.S.) and to the target; this was a small fraction of the global economic cost, its longevity and aftermath and I also foolishly underestimated the human cost. More on my myopia below.
Early on in the use of sanctions, it became clear that they would have a stronger legal basis and would be more likely to succeed if they were adopted by the League of Nations (later the United Nations) and thus if they were more multilateral as opposed to unilateral. This being simply because unilateral sanctions could be undermined by a host of nations who could continue their association with the targeted country. While sanctions have rarely achieved their stated goal, the UN sanctions on South Africa that brought about majority black rule are invariably claimed as the shining success story.
Non binding UN sanctions on South Africa started in 1963 and although some countries enacted trade embargoes on the apartheid regime, the United States and the United Kingdom dragged their feet and did not embrace sanctions because of business interests until the late 1980s. After the United States signed on, the economic cost became prohibitive for the white rulers and they decided it was time to yield to black majority rule. Economic sanctions undoubtedly speeded up the emergence of black majority rule, but it still took much time for sanctions to achieve the desired change. Critical to achieving change was that black rule was also wanted by the overwhelming majority of the citizenry; with a population breakdown of 80% black, 8% white and 12% colored and Asians South Africa was a receptive country for change, a critical point for success in all sanctions but something that it is not always appreciated. Another factor was that South Africa had little economic bargaining power as it needed many critical imports, especially oil, and it was not a significant exporter of a commodity critical for the short term survival of the world.
After this presumed success story of economic sanctions, the United States ramped up its unilateral sanctions that it had started after WWII, most notably with Cuba in 1958 and with Iran in 1979, both sanction regimes that continue, albeit modified, today.
The United States is now the global leader in sending sanctions (the sender) with more than 40 countries sanctioned (targets). The United States learned one important lesson from sending sanctions. Unless the target country is economically weak, dependent on critical imports supplied by the U.S. with no exports in high global demand, has no powerful allies and is poor, unilateral sanctions have little chance of success. To succeed, airtight multilateral economic sanctions are the way to go on big countries with diversified economies and powerful allies. So what did the U.S. do? It came up with secondary sanctions by using the concept of extraterritoriality. Using this concept, if any third country does not uphold U.S. sanctions against a target, then that country will also be subject to the same U.S. sanctions. Namely, it is as if the rest of the world is subject to U.S. laws and is a part of the U.S. Arguably, the U.S. is the only country with the economic, financial and military power to adopt effective secondary sanctions and all this is further enhanced by the dollar, issued by the U.S., being the premier reserve currency in the world.
We see first hand the impact of sanctions on Iran, Venezuela and now on Russia†higher oil and natural gas prices around the world affecting the prices of all forms of energy.Be all this as it may, why should we consider sanctions an abomination to be renounced and outlawed in a civilized world? Let me provide you with a summary of the case against sanctions implemented by the United States and in the process confirm my own myopia in all that I wrote before.
Sanctions are “easy” to adopt. The President can sanction any country’s exports, imports, access to the dollar market and more, sanction institutions, companies and individuals around the world, freeze assets and restrict travel. This is easy and painless. However, precisely because sanctions are now seen as an effective option to affect change around the world and easy to adopt, diplomacy has been shortchanged. Traditional diplomacy is not afforded the time and effort it needs to produce results.
A president can do much of the sanctioning by executive order and if he or she needs congressional support, it is invariably available. The president and Congress are seen by the citizenry as acting and doing something while avoiding armed conflict that leads to casualties and public scrutiny. Politicians can pound their chests and get good press.
Yet, while U.S. casualties may be avoided at least in the short run, Americans do not see the misery that might befall the target. Lack of medicines and deteriorating healthcare that will in some cases result in untimely death for many women and children, besides deprivation from malnutrition. Photos of these are not as disturbing as dead bodies of Americans in body bags and physical destruction caused by American bombs.
The fallout in the target is invariably on the poor, with those in power left unscathed. They have all the medicines, the best available healthcare and nutrition. The powerful even invariably benefit financially through smuggling and corruption as shortages become more prevalent. Instead it is the poor and the average person who suffer and they will invariably hold the United States responsible, especially if they don’t object to their government’s policies that the U.S. finds objectionable. The U.S. creates enemies for itself. The number of enemies can grow with time as sanctions drag on and on as we have seen in the cases of Cuba, Venezuela and Iran. Even if the government is unpopular, significant pain and mortalities that drag on for years will invariably turn some of the citizenry against the United States.
