Russia, Ukraine, and the Demise of Smart Sanctions

| March 21, 2022
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Photo credit: AhmadArdity via Wikimedia Commons

In response to Russia’s invasion of Ukraine, the United States and the European Union, along with other governments across the world, have imposed sanctions on Russia. The sanctions target, in part, Vladimir Putin and an array of wealthy and powerful Russian individuals.  But they also include measures that are designed to rattle the very foundations of the Russian economy, undermining the central bank as well as the ruble, along with access to the global banking network, key exports, and aviation.

Whatever else the sanctions on Russia may accomplish, they also signal a willingness to abandon the expectation that sanctioners will not impose the kind of broad, devastating damage to the civilian population that we saw in the 1990s.  From 1990 to 2003, after Iraq’s invasion of Kuwait, the UN Security Council imposed nearly comprehensive sanctions on Iraq.  After the extensive bombing strikes of the first Persian Gulf War, these sanctions prevented Iraq from repairing or rebuilding its infrastructure, with terrible consequences, including widespread malnutrition and epidemics of cholera and typhoid.  The Iraq sanctions were widely condemned for their humanitarian impact.1 Although the sanctions on Russia have not yet had the same kind of humanitarian impact, their scope is similarly vast and indiscriminate.

 

The Problem with Sanctions

 

There is no question that the invasion of Ukraine is both illegal and immoral, and there is an understandable desire to use every tool in our toolbox in countering Russia’s aggression. But there is a real question as to whether aspects of the sanctions that are hammering Russia’s economy, or major sectors of it, are ethically defensible.  This question is even more pressing as we consider whether they are likely to succeed in forcing Russia’s withdrawal from Ukraine.

We know that sanctions have a questionable record of achieving their political objectives.  Sanctions may be effective as a form of signaling, but they are not likely to succeed at getting the targeted state to comply with the demands made by the sanctioner.  We know as well that when sanctions are imposed upon an authoritarian regime, we can expect to see increased state repression, worsening violations of human rights, greater corruption, worsening inequality, and growing hardship for the poor and marginalized.  It is no surprise that this has been the case in the current situation with Russia.

At the same time, there is the risk that the sanctions will continue to escalate, and that ultimately the sanctioner cannot see a way to end them.   When the sanctions do not result in what is demanded, the sanctioning state finds itself in a difficult position: either lift the sanctions, admitting defeat, or keep ramping them up and continue indefinitely, on the theory that eventually they might work. For the sanctioner, there is generally little cost to taking the latter route—the sanctioning country is typically far larger than the target country.  According to Economic Sanctions Reconsidered, over the last century, in 80 percent of sanctions episodes, the sanctioner’s GNP was more than ten times greater than that of the country targeted, and in half the cases, it was more than one hundred times greater.2 The sanctioner thus generally incurs little risk from imposing even broad, sectoral measures.  The situation with Russia, of course, is the rare case where the sanctioning states have reason to be concerned that the measures they impose will be costly to them as well.

 

Not So “Smart” After All: “Dumb” Sanctions Make a Comeback

 

Part of the present concern centers around the type of sanctions being applied. In the early 2000s, we saw the emergence of targeted “smart” sanctions.  Targeted sanctions, such as arms embargoes, travel restrictions, and asset freezes, were intended to impact those individuals responsible for such acts as aggression and human rights violations, while leaving the civilian population unharmed.  These new targeted measures, it was believed, would be more effective at pressuring state actors to change their behavior, without raising the ethical concerns seen in sanctions regimes that are imposed broadly on an entire country.

What is striking about the sanctions against Russia is the complete abandonment of any legitimate claim to being “smart.”  Certainly, the language of “targeting” is used, and the sanctions on named individuals, such as Putin, convey the sense that the wrongdoer himself will suffer.  However, everything about the many-layered sanctions regimes against Russia operates to the contrary.  The old, “dumb,” comprehensive sanctions, particularly the sanctions regime imposed on Iraq in the 1990s, were castigated for the ways in which they resembled siege warfare: ineffective because as resources dry up, whatever remains will be captured by the wealthy and political and military leaders; and unethical because  those who are most vulnerable, such as infants and children, the elderly, the sick, and the poor, will have few options, and will struggle to survive. The damage is not indiscriminate. Rather, it is counter-discriminate. Those who suffer first, and worst, are those with the least responsibility for their state’s policies; while those who suffer least and last are the powerful and the wealthy, the corrupt officials and black marketeers.

This is roughly what we have seen in the case of Russia.   The narrative being put forward by the sanctioning countries is that Putin and the oligarchs in his inner circle are the ones feeling the sting of sanctions: “Officials are moving to seize their houses, yachts and private jets around the world. French officials on Thursday snatched the superyacht of Igor Sechin, the chief executive of Rosneft, the Russian state oil giant.”3  The UK imposed measures on “Putin’s closest circle, and wealthy Russians who enjoy high-rolling London lifestyles.”4 But there are carve-outs for Russian energy exports, in particular, to avoid a crisis in the EU, which is heavily dependent on Russian oil and gas, as well to avoid destabilizing global oil prices.  Income will continue to flow to some of the wealthiest Russians with controlling interests in the country’s major energy companies.

There is also the question of whether Putin’s assets will be affected in any substantial way.  Adam M. Smith, a former Treasury Department official, noted that it was unlikely that Putin’s wealth would be in jeopardy.”5 Indeed, some have suggested that the measures targeting Putin assets “may prove largely symbolic given that the status of Mr. Putin’s financial holdings has been cloaked in mystery and his money is not believed to be held in the United States.”6

Meanwhile, the impact on the Russian economy and financial institutions has been catastrophic. Several of Russia’s major banks were cut off from SWIFT, the financial messaging hub that is critical to global banking transactions.  The United States, EU, and others have barred transactions with Russia’s Central Bank, and the Bank of International Settlements has cut off services, crippling Russia’s central bank in its engagement with counterpart institutions around the world.  The sanctions “have hammered the ruble, shut down Russia’s stock market and prompted bank runs.”7

Daleep Singh, the U.S. deputy national security advisor for international economics, insisted that “We target [the sanctions] carefully to avoid even the appearance of targeting the average Russian civilian.”8 But it strains credulity to claim that cutting major Russian banks out of the international financial network, and broadly undermining the country’s trade and investment, can in any sense be considered “carefully” targeted.

 

The Weight of Our Actions

 

I am not suggesting that Russia’s brutal attacks on Ukraine are defensible, in any regard. But the response of the West to Russia’s actions does bring to mind the question articulated forcefully in the early and mid-1990s, the period of the UN Security Council’s post-Cold War “activism”: are there limits on what may be done in the name of international peace and security?  In the name of peace and security, may a nation of 150 million people be reduced to destitution and chaos?

The broader the scope of coercive economic measures, the blunter their impact will be.  They may well succeed at undermining Russia’s economy, and there may be some cost to the political leaders and the wealthy.  But those are also the individuals with the greatest ability to safeguard their assets and insulate themselves against harsh penalties. As with siege warfare, they will be harmed last and least, while the implosion of the Russian economy will fall most heavily on those with the least responsibility for state policies, and the least resilience in the face of economic crisis. The irony of these sanctions, then, is that while they are being imposed in the name of human rights, peace, and security, the West is imposing a sanctions regime on Russia that will likely deprive the general population of basic human rights—as happened in Iraq—and destabilize the international order.

If there is one thing we should have learned from Iraq in the 1990s, it is that when the Western powers coordinate their efforts, it is indeed possible to use economic measures to bring an aggressive and authoritarian nation to its knees.  But whether the ensuing damage can be contained, or ever really brought to an end once the conflict is over, is an entirely different matter.


—Joy Gordon

Joy Gordon holds the Ignacio Ellacuría, S.J. Chair in Social Ethics at Loyola University Chicago, and has published extensively on legal and ethical aspects of economic sanctions.

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  1. Joy Gordon, Invisible War (Cambridge: Harvard University Press, 2010).
  2. Gary Clyde Hufbauer, et al., Economic Sanctions Reconsidered, 3rded. (Washington, D.C.: Peterson Institute for International Economics, 2009), p.89.
  3. New York Times,“With Sanctions, U.S. and Europe Aim to Punish Putin and Fuel Russian Unrest,” March 4, 2022.
  4. Al-Jazeera, “List of sanctions against Russia after it invaded Ukraine,” March 3, 2022.
  5. New York Times,“The U.S. and Europe target Putin with Sanctions,” Feb. 25, 2022.
  6. New York Times,“The U.S. and Europe target Putin with Sanctions,” Feb. 25, 2022.
  7. New York Times, “With Sanctions, U.S. and Europe Aim to Punish Putin and Fuel Russian Unrest,” March 4, 2022.
  8. New York Times, “With Sanctions, U.S. and Europe Aim to Punish Putin and Fuel Russian Unrest,” March 4, 2022.

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