“Governments have used economic sanctions increasingly more to achieve their foreign policy goals, but do they work?”

By Oleg Biletsky

     On April 2nd of 2015, the international community had reached a historic nuclear deal with Iran that lifted the economic sanctions imposed on the country in exchange for restrictions on its nuclear activities. Iran’s economy took a huge hit after the UN, EU, US and several other individual countries imposed heavy sanctions on the country’s energy and financial sectors to halt its nuclear ambitions. Ever since the restrictions began to take effect, Iran’s GDP fell by 9% between March 2012 and March 2014 and its oil revenues decreased by more than $160 billion since 2012. The damage that was created by these sanctions forced Iran to accept restrictions on its nuclear plans. Although there is still plenty of debate regarding the overall success of the deal, with some critics stating that Iran was much better off from the deal than the US, EU and other individual countries, the general consensus is that it was successful in fulfilling its goal: preventing Iran from acquiring a nuclear weapon.

 

     In this particular case, economic sanctions were effective in halting a potential nuclear threat, but they haven’t always been successful in other countries. Sanctions on North Korea, for instance, have been largely ineffective, as the country is still accused of human rights abuse against its people and hasn’t made any effort to reduce its nuclear and missile programs. This mixed success rate of economic sanctions makes one wonder about the factors that most strongly play into their effectiveness.

 

Are Tougher and Longer Lasting Sanctions More Effective?

 

     When thinking about the aspects of sanctions that have the greatest influence on their success, the first couple that come to mind are the strength of the restrictions and their duration. Tougher sanctions such as trade embargoes will have a greater effect on a targeted country’s economy, but as history shows, they aren’t necessarily going to be more effective. For instance, the sanctions the Allied powers imposed on Japan in early 1940s reduced its overseas trade by 75% and decreased its oil imports by 88%. Instead of halting its expansion in Asia, the sanctions prompted Japan to enter World War II. The duration of sanctions is also an unreliable measurement of the success of sanctions. The US embargo on Cuba, for example, lasted for over half a century and was unsuccessful in ending the Castro regime. If the strength and duration of the sanctions do not necessarily determine the success of the economic restrictions, what aspects then correlate to the effectiveness of the sanctions?

 

     In response to the overall historic success of economic sanctions, Sir Adam Roberts, the senior research fellow at Oxford University’s Centre for International Studies, was quoted in the BBC Article “Analysis: Do Economic Sanctions Work?” stating that many times the country’s common people are the ones that suffer the most from sanctions, while the people with power find ways to get around restrictions. Those restrictions thus fail to affect the people in charge of the country who then decide how to respond to those restrictions.

 

Are “Smart Sanctions” the Answer?

 

     The argument then becomes that effective economic sanctions should target the wealthy, as they often have the final say in their country’s political process. These type of sanctions are known as “smart sanctions” or “targeted sanctions,” and they aim to hurt the political and financial elites of a targeted country while minimizing any impact on the rest of society. Smart sanctions are intended to leave no room for loopholes the wealthy might use to transfer the impact of the restrictions to the poor. Some examples of these types of restrictions include asset freezes, travel bans and arms embargoes. The overall argument for targeted sanctions then is if the people with power are strongly affected, eventually they won’t have any other choice but to cooperate with the country/countries imposing the sanctions. Smart sanctions seem to be effective in theory, but are they successful in practice?

 

     Since the 1990s, the international community has been increasingly advocating for smart sanctions to achieve foreign policy goals, and after analyzing various cases of targeted sanctions over the years, one can conclude that they are largely ineffective in achieving their goals. According to the Peterson Institute for International Economics, only 5 out of 20 cases of targeted sanctions were determined to be successful, and such a low success rate becomes clearer if we examine some of the main instances of smart sanctions in recent years. The targeted sanctions against Russia, for example, have been unsuccessful in ending Russia’s occupation of Crimea and several other Ukrainian territories. The US and EU’s restrictions placed asset freezes and travel bans on hundreds of people that were part of the Russian political and financial elite after Russia annexed Crimea. These sanctions were also helped by the collapse of global oil prices that made the Russian oil industry unprofitable. All of these factors have certainly hurt the Russian elite and oil industry but they haven’t been effective enough in ending Russia’s occupation of Crimea.

 

Where Do We Go From Here?

 

     Economic sanctions overall have a mixed record of success, and it seems that countries can’t rely solely on these restrictions to achieve foreign policy goals. Targeted sanctions may be better in regards to minimizing the damage on the poor, but they are also rarely effective. Although they may not be the ideal tool to combat various activities of other countries, they are one of the few options available to countries that do not involve any military actions. In a world with a vast amount of nuclear weapons and deadly missiles, war poses a considerable risk of devastating outcomes, and the international community must find peaceful solutions to world problems. Economic sanctions will continue to be used to address various issues around the globe, as they represent a non military action that nevertheless damages the targeted country. We mustn’t expect these restrictions to achieve their goals by themselves; rather, we should think of them as pushing blocks that force the targeted country to rethink their violating actions.

 

References:

 

Iran’s Economy, By the Numbers. (2015, May 11). Retrieved February 18, 2017, from http://iranprimer.usip.org/blog/2015/may/11/irans-economy-numbers

 

Daniel Griswold October 12, 2005. (2005, October 12). Four Decades of Failure: The U.S. Embargo against Cuba. Retrieved February 18, 2017, from https://www.cato.org/publications/speeches/four-decades-failure-us-embargo-against-cuba

 

Hufbauer, G. C., & Oegg, B. (2016, April 19). Targeted Sanctions: A Policy Alternative? Retrieved February 18, 2017, from https://piie.com/commentary/speeches-papers/targeted-sanctions-policy-alternative

 

Marcus, J. (2010, July 26). Analysis: Do economic sanctions work? Retrieved February 18, 2017, from http://www.bbc.com/news/world-middle-east-10742109

 

United States freezes Japanese assets. (n.d.). Retrieved February 18, 2017, from http://www.history.com/this-day-in-history/united-states-freezes-japanese-assets

 

Wysong, W. (2016, October 20). Keeping Up with Sanctions Regulations. Retrieved February 18, 2017, from http://www.corporatecomplianceinsights.com/u-s-economic-sanctions-navigating-the-compliance-challenges