How Economic Sanctions Shape Global Politics: Strategies, Effectiveness, and Challenges

 

SUMMARY OF ARTICLE

Economic sanctions are tools used by countries or alliances to penalize other nations for various reasons such as human rights violations, support for extremist groups, or geopolitical conflicts.

Sanctions can be imposed unilaterally by a single country or multilaterally by multiple countries or organizations like the United Nations, the European Union, or the United States.

The process of imposing sanctions varies among entities; for instance, the European Union requires unanimous agreement among member states, while in the US, both Congress and the President hold authority.

Sanctions aim to protect national interests, change a country's behavior, or gain a competitive advantage in global markets.

Critics argue that sanctions harm ordinary citizens more than elites, often fail to achieve desired outcomes, and may lead to unintended consequences such as pushing the target country toward alternative alliances.

Even leading nations like the United States have faced sanctions in response to their actions, highlighting the complexity and reciprocity of the sanctioning process.

Countries often find ways to bypass sanctions, such as through third-party trade routes or alternative payment systems, though these methods can fragment the global economic system.

Despite their widespread use, the effectiveness of economic sanctions in changing the behavior of targeted governments remains questionable, with countries like North Korea, Iran, Cuba, and Russia continuing their policies despite facing sanctions for decades.

 

Welcome to Historical Horizons! When a conflict takes hold on the global scene, we often hear announcements of economic sanctions by major economic powers and most of the time economic sanctions are imposed on a country. Why are these economic sanctions imposed and who has the authority to impose them? Do these sanctions harm the target country? Is the purpose for which they are applied, fulfilled? Do countries that fall victim to these restrictions bypass them? What do experts criticize them?

ECONOMIC SANCTIONS

An economic embargo is a trade or financial embargo imposed by a single country, or several countries which are imposed on the target country for violating an international norm. In general, this violation is based on human rights abuses, racial discrimination or it could be a war waged by that country or support for an extremist group. Sanctions can be not only against a country but also against a group or an individual. The purpose of these sanctions is apparently to teach the target country a lesson and force it to change its behaviour.

You must have heard about sanctions imposed on Russia by the USA and the EEU after the Russia-Ukraine war The purpose of these sanctions was to keep Russia out of the war Iran has been facing various sanctions for decades to give up its nuclear program Now we go to our question that who can impose economic sanctions and how many types are they? Practically every country can impose economic sanctions. But generally, they are imposed by major powers or organizations, which include powerful countries such as the United Nations, the United States, the European Union, China, and Russia.

If a single country imposes these economic sanctions on another country, it is called unilateral while if two or more countries impose these sanctions, it is called multilateral economic sanctions. Economic sanctions can take various forms, including travel restrictions, such as closing your airspace, denying the entry of citizens of a country into one's country. Trade embargoes are restrictions on buying something from or selling something to a country that is, imposing a ban on imports or exports or both. This includes freezing the target country's assets in its own country or imposing heavy tariffs on goods coming from that country.

 What is the process of imposing sanctions on any country in the EU, USA and the UN ?

The European Union is an alliance of 27 powerful and extremely wealthy European countries. The EU responds to acts of provocation or destruction of international peace by any country in form of economic sanctions. This is considered the common and powerful weapon of this alliance. The decision to impose sanctions on a country by the European Union is agreed upon by all member states. The final approval is given by the Council of European Union. The European Union has used this weapon on different countries thirty times since its establishment Its targeted countries include North Korea, Iraq, and powerful countries like the United States, Russia, and China.

 In USA, the authority to impose restrictions on any country is with both the Congress and the President. The President exercises this power directly through an executive order in most cases. Congress can also pass a bill of sanctions against a country, but even then the final decision is made by the President.

USA has used this weapon against Russia, China, India, Pakistan and Iran many times. The Treasury Department deals with sanctions against a country in the United States. There are more than two dozen active programs of sanctions against different countries and groups in the USA. When the Taliban took control of Afghanistan in 2021, the USA froze $7 billion in Afghan assets.

 Now let's talk about United Nations In order to impose sanctions against any country, a majority of 15 member states of the UNSC must approve the decision. Here five permanent members Britain, France, USA, Russia and China also have the right of veto. Recently, the United States presented a resolution to tighten the sanctions already imposed on North Korea Both China and Russia used their veto power to protect North Korea from further sanctions. Although 13 out of 15 members were in favour of this resolution. One thing also becomes clear that UN cannot impose any such sanctions against its five permanent members. UN has imposed sanctions imposed on Al-Qaeda, Taliban, Iran and Iraq.

AIMS OF ECONOMIC SANCTIONS

Sanctions protect the national interest of the sanctioning country and are an important weapon of its foreign policy. By using which it controls the elements that disturb the peace and order situation at the national or global level. According to the European Union and the United States, the sanctions on Iran were imposed under the same objective. Russia has also used this weapon to prevent Ukraine, which leans towards Western bloc from joining NATO or the EU. This is the reason why Russia has stopped supplying gas to Ukraine.

Sanctions are also imposed to change the domestic policy or government of a country. A good example of this is the Anti Apartheid Act 1986. Through this act, the US Congress imposed severe economic sanctions on South Africa. The purpose of these restrictions was to force the SA government to end ongoing racial discrimination in the country. The United States also set five conditions for lifting these economic sanctions. These conditions included the release of Nelson Mandela and other prisoners. This initiative of America proved to be quite successful and finally, in 1990, the dismantling of the apartheid system began with the release of Nelson Mandela.

NON MILITARY WEAPONS

In fact the sanctions are non-military weapons and they are used before attacking any country as a non-military weapon. The best example of this is the Suez Crisis of 1956 when the US threat of economic sanctions against Israel, Britain and France worked and they had to withdraw from an apparently won war against Egypt. A case in point is the United Nations' efforts to stop Iran from pursuing its nuclear program.

Economic sanctions are sometimes used to gain and maintain a competitive advantage in the global market. The best example of this is the oil embargo imposed by OPEC on the US and the EU countries in 1973. The purpose of this embargo was to punish countries that supported Israel in the Arab-Israeli war. It was also to gain an advantage in the global oil market.

CRITISMS ON ECONOMICS SANCTIONS

Economic sanctions are also heavily criticized by experts. First, economic sanctions seriously harm the common citizens of any country. For example, if a country imposes a ban on its exports to another country. Then, the products made from these exports will not be made in the sanctioned country. In this situation, companies may have to close their operations in that country and they may also be expensive in that country and the people in the exporting country may lose jobs. Elites don't have any effect of these restrictions they also have the power to buy expensive goods and you can also do your business in another country. Similarly, if taxes or a complete ban are imposed on the goods imported from a country, in this case, when the products of the sanctioned country will not go to the market then this country will suffer a severe economic loss. This is why economists call these sanctions Weapons of Mass Destruction.

An objection is also made that economic sanctions do not succeed in achieving the desired results. Rather, they cannot force the rulers of a country to change their policies or their behaviour. The best example of this is Myanmar, where the military government took control in 1962. And after that, the oppression and violence of the minority community is continued by the government.

However, the United States and the United Kingdom had imposed sanctions on the Myanmar government. But the Myanmar government has shown no flexibility in its policies. A recent example of this is the sanctions imposed on Russia by European countries and the United States which seem to be completely harmless, and the Russia-Ukraine war is still going on North Korea has been imposed sanctions by US, EU and other countries for decades, but not making any difference. Another objection that the target country sooner or later finds an alternative of sanctions or it is forced to move to the bloc opposite the embargoing country. Moreover, GDP of sanctioning country will also be affected.

Has the United States, which has always been the leader in imposing sanctions, ever faced sanctions?

"Yes" America has also been sanctioned many times by other countries. When Russia invaded Crimea in 2014, in response to sanctions imposed by the United States, Russia also imposed a ban on food imports from the United States. In 2018, Trump imposed tariffs on goods from other countries to promote the purchase of domestic products. The European Union, Canada, China and Russia gave a strong response to this move of America and in return, American products, including steel, aluminium and some other products, were heavily taxed.

BYPASS OF ECONOMIC SANCTIONS

Recently, the US imposed a ban on timber imports from Russia after the Russia-Ukraine war then the same timber was imported from Vietnam. Now that the demand from America was high, Russia started exporting timber to Vietnam through China. From where the same Russian wood started to be exported to America. Just like when Russian airlines were banned from using the airspace of European countries, then the Russian citizens started reaching Europe via Turkey, though it was a costly way to bypass sanctions.

Swift is an online payment system used for fast and secure payments between financial institutions around the world when severe economic sanctions are imposed on a country, then banks in that country are also banned from receiving or sending payments through Swift. So in this situation countries start looking for an alternative. Since Iran's banks have been banned from SWIFT so the EU has introduced its own Instex system to avoid this and continue trading with Iran.

Similary, China has developed a system named Union Pay. But one of its disadvantages is that when many parallel systems are created in the world the global payment system will suffer from fragmentation. Then no country will be able to ban on payment system of any other country, as they have different systems. It is quite clear that economic sanctions are rarely effective in changing the behaviour of the ruling class of any country and their success rate is very low, in most cases they fail North Korea, Iran, Cuba and Russia continue to pursue their policies despite being under sanctions for decades. Yes, however, their people, middle class and small business class have definitely suffered from the restrictions imposed on them.

 Do you think these sanctions are an effective weapon against a country? Or their loss is only to the common class.

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