Immediately after Russian troops attacked Ukraine in February 2022, a group of Western countries – including the U.S., EU states, Australia, Great Britain and Japan – imposed tough sanctions against Russia. French Economy Minister Bruno Le Maire announced on March 1, 2022, that the West would wage “an all-out economic and financial war against Russia.” However, even after more than nine months, the sanctioned state, Russia, shows only moderate signs of economic weakening. On the contrary, revenues from oil exports have amounted to about $20 billion per month until mid-2022, a significant increase of about one-third from $14.5 billion per month in 2021. Not only can the Russian government continue the war of aggression, but it is also liquid enough to manage without exporting gas to Western Europe.
At the same time, the consequences of Russia’s retaliatory sanctions are being painfully felt in many countries of the European Union, as well as in developing and emerging economies. If only in the interest of their own populations, it would be imperative to lift the economic sanctions against Russia. More importantly, the politicization of international economic relations is a dangerous error that will lead to a continued weakening of the international division of labor.
The sanctions were imposed to punish Russia’s attack. Needless to stress that there is no justification for the invasion in international law. Many people were and continue to be shocked that war has returned to Europe. The punishment of the Russian government and society continues to find much support in European countries. Australia, Canada, Japan and the USA have supported the sanctions regime. Critics of the sanctions are always asked whether standing idly by is an alternative. There is little discussion, however, about whether economic sanctions are a wise policy. The question of what happens if the sanctioned state does not end its war of aggression was and is given little space in the debates. This is negligent, because the sanctions are having an effect, albeit quite different from what the sanctions advocates expected.
The sanctions alliance has either misjudged or failed to consider at least three dimensions of its actions. The first concerns the ability of Russian society to cope with sanctions. To put it bluntly: People in Russia know sanctions and know how to live with them. The second point concerns the consequences of sanctions for the international financial system: The measures can lead to the emergence of competing systems, thus further fragmenting international finance. Thirdly, the sanctions have consequences for international trade and are likely to exacerbate the already observable trend toward the rollback of international economic relations.
Economic sanctions have of course been implemented before. More than 100 years ago, after the end of the First World War, the post-Tsarist Russia was immediately confronted with economic sanctions by the Western Allies in October 1919. Bolshevism was to be defeated through the application of sanctions. The project failed and laid the foundation for a critical perception of the actions of Western countries against Russia. Vladimir Putin can build on [...]
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