How sanctions historically failed to prevent war

In 1960, following the deposition of the brutal Batista regime and the nationalisation of US-owned oil refineries in Cuba, the United States placed an embargo on all exports to Cuba except for food and medicine. 

In 1962, the embargo would be extended to include almost all exports. The purpose of these sanctions was to cripple the Cuban economy, manufacture a mass upheaval, engineer a coup and potentially coerce the Castro regime into submission.  

Unfortunately for the US, sanctions and embargoes are diplomatic tools with a history of backfiring, as the Castro regime used US sanctions as an excuse to justify its actions and its failure to improve economic conditions within the country. 

The Castro regime still remains in power in Cuba and the roughly 60-year-long unilateral US embargo has only led to the misery of average Cubans, a large influx of Cuban refugees into Florida and the regular condemnation of US sanctions in the UN General assembly.

Sheikh Rafi Ahmed. Illustration: TBS

I remind the reader of this because the debate over the effect and efficacy of sanctions have been brought back to life again with the recent declaration of the first series of sanctions against Russia by the US, United Kingdom, Germany, Canada and the European Union, as Putin's army begins its invasion of Ukraine. 

Broadly speaking, the sanctions as of now banned the purchase of Russian sovereign bonds and the processing of transactions from two of Russia's state-affiliated banks, VEB bank and Russia's military bank - Promsvyazbank, (Uk did so for five Russian financial institutions) as well as, certain oligarchs close to Putin and his government in Kremlin.

While Ukrainian President Zelensky hailed the sanctions by the West, many pundits argued that the sanctions were too weak and would not bring about meaningful behavioural changes on the part of Russia.

These recent developments beg the question: Do sanctions really work? Can the recent rounds of sanctions change Putin's mind?

Before delving into these questions, it may be wise to at least get to know the basics of sanctions and how they work. 

In essence, sanctions are non-violent measures to isolate countries, regimes, organisations or individuals to foster behavioural change provided they have a record of contributing to human rights violation, the proliferation of weapons of mass destruction, sheltering international terrorism, money laundering and other activities that endanger international peace and security. 

For instance, the sanctions against Iran and North Korea's nuclear programmes were imposed by the US and its allies on the grounds of the proliferation of nuclear arms while the ones on Russia were imposed on grounds of violating territorial integrity and sovereignty. Globally, 75 countries are now subject to a host of international sanctions ranging from embargo on arms trade to travel bans of certain individuals. 

Whether or not a particular set of sanctions would work depends on a plethora of factors such as the time of imposition, the duration of the embargo, the unity and commitment of imposing parties, multilateralism and the economic resilience of the target country. 

Firstly, sanctions have a considerably larger outside lag than typical overt or covert military operations. That is, it takes time for the target country or organisations to feel the impact of sanctions. Hence, sanctions might not be the most effective diplomatic instrument when facing an impending crisis like the Ukraine-Russia border escalation which requires an immediate response. 

For example, a six-month-long comprehensive set of multilateral international sanctions failed to coerce Saddam Hussein into submission and eventually, the allied forces had to launch Operation Desert Storm to push the Iraqi forces back. 

Even when the countries do have time in hand, the lack of united multilateral efforts can render the whole effort futile. The western embargo on Iran was rendered useless thanks to its rich oil reserves and its ties with Russia and China. Even US allies at times have backed away from their commitment to harsh sanctions on grounds of human rights violation as well as national interest. 

In the case of Russia, the EU member countries still remain reluctant to impose harsher sanctions on Russia as 40% of their natural gas comes from Russia. Yesterday, Germany reluctantly agreed to halt the construction of Nord Stream 2.0 - a pipeline that would improve the connection between Russian gas reserves and European countries, particularly Germany. However, Germany currently depends on Russia for 50% to 75% of its natural gas supply and is extremely unlikely to commit to this policy in the long term. 

That is not to say that sanctions never work. For instance, multilateral sanctions introduced following the Gulf War did force Saddam Hussein to comply with the resolution to eliminate Iraq's weapons of mass destruction and greatly diminished its ability to import weapons. Sanctions also forced Serbia to accept the Dayton agreement in 1995. 

However, there is a fundamental difference between a sanction having effect and efficacy. All-out sanctions on Cuba, Iran, North Korea, Syria did a lot to hurt the economies of the respective country, caused internal displacement as well as international migration and altogether hurt the innocent civilians who had little to do with the nefarious policies undertaken by their governments. 

On top of that, like Cuba, all of these countries have used these sanctions to foster anti-US and anti-Western sentiment and divert attention away from their cronyism and autocratic practices. This is one of the reasons why the United Nations, as well as the European Union, have taken a more targeted approach in recent years where the broad sanctions are avoided in favour of sanctions on specific organisations. 

Thirdly, unilateral sanctions rarely have the desired outcome, a lesson the US needs to learn fast. Over the past two decades, the US has imposed roughly 100 sanctions on different Russian organisations, financial institutions, government officials and oligarchs to little effect. 

On one hand, the sanctions were not severe enough to foster behavioural change. On the other hand, Russia simply went around the US to deal with China and the European Union without losing much in the process. Consequently, it was the US investors and companies who suffered from the sanctions through lost revenues while the US workers lost their jobs. 

The recent rounds of sanctions imposed by the Western allies are also unlikely to affect Russia in any significant manner, despite appearing more multilateral. Although the Kremlin would be cut off from processing transactions in US dollars and the ruble has lost 10% of its value against the US dollar, Russia had already taken systemic steps to reduce its reliance on the US dollar, such as using the euro or yuan to settle trade payments. 

Russian banks also joined the Cross-border Interbank Payment System, a financial messaging system that facilitates non-dollar settlements between China and Russia. However, still 50% of its transactions are denominated in dollar terms, leaving it somewhat exposed to Western sanctions. 

More importantly, given the EU's dependence on Russia for energy supply it is unlikely that they will be kicked off from the SWIFT system. While Russia has alternate buyers for its energy supply, the European Union cannot readily readjust its energy infrastructure. 

Hence, if the Western allies do eventually impose sanctions on Russian energy exports, the EU would be hurt the most, at least in the short run. 

In short, the first round of sanctions has barely hurt the Russian economy and it's difficult to say whether future rounds of sanctions would have the desired outcome. 

While many pundits are arguing for harsh sanctions from the get-go, the unpredictable nature of this often backfiring diplomatic instrument makes the path ahead precarious, to say the least.