Are sanctions effective?

During the last few decades, the U.S. has tried to refine its capacity to apply sanctions effectively. Economic sanctions against perceived enemy states or individuals have become increasingly important as a political tool for the U.S. Sanctions have been implemented against a long list of countries such as Cuba, Sudan Iran, North Korea, Russia, Venezuela, Syria, and others.  

The Office of Foreign Assets Control (OFAC), part of the Treasury department, oversees American sanctions programs, keeps implementing targeted sanctions in the hope to ensure economic pressure on the targets. The Biden administration has primarily focused sanctions on Russia in an effort to help Ukraine. The U.S. sanctions against Russia are the most punishing economic sanctions ever levied against a state. Factories have closed, interest rates have doubled, inflation has risen, and stores are running short on goods. Most Western companies have pulled out. Russians cannot drink Starbucks coffee, buy furniture at IKEA, eat at McDonald’s or watch a movie on Netflix.

Despite this, the conflict in Ukraine continues and the Russian economy has not collapsed. The most noteworthy result of the sanctions has likely been a geopolitical Russian pivot away from Europe towards Asia, in particular China. One could question if sanctions actually achieve anything in the end of the day? North Korea has been under sanctions for decades but has developed techniques and a complicated web of shell organizations to get around them.

It seems that sanctions often do not achieve the goals intended. There was a period of extremely harsh U.S.-led sanctions against Iraq after the first Gulf War. The goal was to convince the regime to change some of its practices. While those sanctions created significant impacts on the Iraqi civilian population, making it difficult to access all sorts of goods and severely harm the economy, it did not lead to the downfall of the regime, but instead led to a new U.S.-led invasion in 2003.

There are only so many tools that governments have to convince another government to engage in any kind of policy, particularly with poor relations between the two governments. There has been a shift in sanction policy from overall sanctions targeting the entire economy of the country to focus sanctions on individuals, both sanctions on travel, and a variety of sanctions on individuals’ ability to move money and engage in different kinds of economic practices.

At what point is the U.S. willing to remove sanctions? It seems that once sanctions are put into place, it is often difficult to withdraw them. They just have a kind of life of their own. It is also clear that the U.S. has political and economic interests in keeping sanctions on Russia. The U.S. government wants the conflict in Ukraine to continue as it is good for American military corporations as they are making billions and will make more the longer the conflict last. The U.S. also hopes to replace Russia as the main energy provider to Europe, both of oil and natural gas. The harsher the sanctions against Russia are, the more Europe will have to rely on the U.S. for energy.

As long as there are high commodity prices and Russia continues to export oil, gas, grain, and even gold to non-Western countries, the Russian economy will be fine with or without sanctions. The most impactful result from the sanctions is probably Russia’s closer relationship with China. This is shifting the balance of power globally and with an increasingly strong BRICS alliance, the U.S. might find itself left out eventually.

It seems that sanctions have limited impact as new alliances form and new geopolitical constellations materialize. There is also a fine line between punishing and self-serving. It is clear that in many cases, the U.S. is putting sanctions in place in order to gain economically. In an effort to grow business in Europe, sanctions against Russia are helping the U.S. The U.S. has also managed to expand NATO and increased U.S. energy exports to Europe. The military-industrial complex in the U.S. must be pleased with the events in Europe.

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