Economic Sanctions? Ineffective!

by Hervé Pugi.

More and more voices are rallying to condemn the – often wrongful recourse – to economic sanctions. A weapon that can be massively destructive when applied across the board and indefinitely. A tactic that is generally counterproductive and morally questionable. Let’s explain.

Economic sanctions are « blunt instruments, often inflicting serious suffering on civilians without affecting the perpetrators ». Just one opinion among others. It was, in any case, the assessment by Kofi Annan, UN Secretary General from 1997 to 2006. Does it count as a moral judgment? Not just that. There has been a vast set of literature written about this issue that takes this point of view.

Economic Sanctions Reconsidered (2007) by Gary C. Hufbauer, Jeffrey J. Schott and Kimberley A. Elliott (HSE), is case in point. After surveying 2014 cases of sanctions introduced since the beginning of the 20th century, it offers valuable insight – information restricted to insiders. If we were to distill its conclusions to the lowest common denominator, the Peterson Institute for International Economics report would conclude that sanctions have a good success rate (65%) when the goals are “modest”, but become distinctly insignificant (5%) when the main goal is regulating a military conflict, a territorial dispute, or a change of political regime (see table).

 

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This is a controversial economic topic, which everyone will want to critique and offer their own methodology for, but let’s look at what experts have to say. Robert Pape (Why Economic Sanctions Do Not Work, 1997) concludes that the overall success rate, excluding trade differentials, is 16%. The 2012 study by the Targeted Sanctions Consortium of 56 sanctions between 1992 and 2012 reported a 13% success rate when the goal was to achieve a political change. All these results are, of course, subject to interpretation.

Behind all the numbers, however, the realities on the ground are actually not very different: « The proposition that sanctions are conducive to replacing an oppressive and unpopular regime resists analysis. » So says Tim Niblock in his book Pariah States & Sanctions in the Middle East: Iraq, Libya, Sudan. The Professor Emeritus of Political Science, and Middle-East specialist, went further in a statement to the United Nations Security Council, saying « Sanctions destroy the breeding ground of democratisation, if it has existed, leading to increased competition for resources, exacerbating divisions and social injustices, and ultimately threatening the political stability » of the target States.

Experience actually shows that global sanctions, unlimited in time, lead to perverse effects and negative or even disastrous phenomena. In brief, an embargo is usually totally counterproductive. Placed in limbo, the middle classes – often the drivers of democratic aspirations – sink into oblivion and with them any hope of recovery. Split asunder, the economy falls into the hands of the wealthiest who enrich themselves at the expense of the weakest.

Some States, considered « rogue » by managing to circumvent sanctions, find these new practices a way of earning the dollars to pay off their political bosses. Poor in the extreme, people at the bottom survive by playing the black market and building an identity as « victimized » by their authorities. The alternative is to turn to more radical, ideological movements. An attractive escape, the consequences of which everyone knows.

Paradoxically (or not), the best allies of States hit by economic sanctions are in many cases multinationals. This is because this other theater of operations – the world of business – is not usually worried about moral considerations. A third party that is unilaterally excluded, and is a lost market for businesses in the host country with inherently « serious losses » as well as a decline in « reputation and perception of reliability » is an HSE disaster. Powerful industrial lobbies do their best to impose coercive measures (planned and implemented) to achieve the results they want. All the more so as they abhor a power vacuum and, unless a political alliance has formed in the meantime, candidates come running to fill the gap. Especially when it involves coveted natural resources. Thus, « sanctions can create their own antidotes, » says Economic Sanctions Reconsidered. In that same spirit, Trésor-Éco in its newsletter of July 2015 maintains that « experience shows that the burden of sanctions on a country’s economy is sometimes pointlessly high. » Ineffective for some, costly for others, we now understand that the many forms of economic sanctions need extensive discussion before they can be applied.

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