Are Sanctions Effective?
Sanctions as a foreign policy tool
Since Russia launched its vicious war against Ukraine nearly a month ago, severe sanctions were imposed against Russia, its leaders, its elites and their family members, and its oligarchs.
These designations are much more significant than the borderline perfunctory restrictions imposed by the Obama administration in 2014 after Russia illegally annexed Crimea. Although, those sanctions did cause some economic repercussions, they were not effective in 1) forcing Moscow to relinquish the territory it stole and 2) changing Putin’s calculus vis-à-vis Ukraine.
Russia’s economic growth slowed after Moscow’s Crimea invasion. In 2014 and 2015, GDP growth contracted by 1.02 percent and 2.71 percent respectively, and although the drop in oil prices had a lot to do with the decline (after all, when a country’s economic growth projections and budgeting rely largely on oil prices remaining at least $70 per barrel, and oil prices proceed to drop to $52 per barrel, that’s not exactly conducive to economic growth), the complete embargo on Crimea by the West, which cost Russia billions, as well as export controls, defense sector sanctions, and sanctions against energy projects in the Arctic, deep water, and shale fields, certainly had an effect.
During the Obama administration, Treasury in particular spent a lot of time assessing the possible consequences of sanctions on not just US projects, companies, and interests, but also humanitarian impacts, which they sought to avoid as much as possible. These were big reasons why sanctions post-Crimea did not force Russia to change force—we tried to avoid major repercussions that would impact our interests.
These days, the designations are different.
Russia’s unprovoked attack targeted hospitals and schools, residential buildings, women and children, and other innocent Ukrainian citizens. The attack was so vicious, that the Russian troops sent in to perform the carnage were disgusted with themselves and with Russia. Watch this presser with Russian reconnaissance troops and pay particular attention at the 42:00 mark when these guys are asked what they feel about what they had done.
“We are the fascists.”
As an aside, I was asked whether I thought this is simply Ukrainian propaganda. I will make an assessment—not a statement of fact—about this presser. The men do not have Ukrainian accents. They are Russian. Unless they’re flawless actors, their deep shame, humiliation, and disgust with themselves and their leaders are real and obvious. Their statements also corroborate other claims I have read about and seen—that the majority of Russian troops had no idea they were invading their neighbor, or that they were expected to just destroy anything in their way. They thought they were on a training exercise, as did their families, and they believe they were misled and deceived.
So no, I do not believe this is Ukrainian propaganda.
But returning to sanctions, yes, the sanctions imposed so far on Russia are much more severe, and yes, they are having an impact on innocent Russians. It’s a shame, but it is what it is.
Putin has described sanctions against Russia as an “economic blitzkrieg” in an effort to once again paint Russia as a victim of western aggression.
Yes, regular Russians are losing jobs because of the mass exodus of western firms from the country.
Many Russians who took vacations abroad are stuck there, unable to access their money.
Flying anywhere outside the country is now near impossible, since most European countries have closed their air space to Russian aircraft.
Even items that many take for granted are beginning to disappear from stores.
Videos circulating on social media show elderly Russians, who remember Soviet shortages, swooping sugar. The price rose nearly 13 percent last week. The government says there's no shortage. Sugar exports are now banned.
So those who say that sanctions are impacting regular Russians are correct. The problem is that the Russian leaders, elites, and corrupt oligarchs are so entwined in the Russian economy, it is impossible to impose impactful sanctions against these corrupt, bloodthirsty criminals without casting a wide net of economic targets that will impact regular people. The US government did not do this after the Crimea invasion, choosing instead to target specific sectors with non-SDN sanctions, and leaving massive loopholes for Russian government elites and connected oligarchs and their families to exploit.
This time, given the overt, unprovoked attack against Ukraine, and the mass slaughter of vulnerable civilians, all bets are off. Yes, sanctions are still targeted, and are not a one-size-fits-all hit on particular sectors of the economy, but they are much more comprehensive and severe, and they are meant to hit Putin hard, erode his support among Russians, which received a boost when he decided to invade a neighboring country and murder innocent people. Will Putin still have a 69 percent approval rating when ordinary Russians cannot access their money, buy a McDonald’s burger, or a pair of Levi’s jeans? Will his oligarchs still support him or help him conceal his money if their assets are being frozen and their yachts are being seized?
In addition, we are no longer imposing unilateral sanctions, but working in coordination with partners and allies, which is always a much more effective hit on malign actors.
The efficiency of sanctions also depends on our goals.
Is our goal to punish Putin for the bloodshed he has caused by cutting Russia off from the global financial system?
Is it to force him out of Ukraine?
Is it to reduce his base of support among the Russian populace and among the oligarchs who have been loyal to him over the years?
Is it to help ensure that he and Russia cannot afford his aggression for long?
Is it all of the above?
I don’t think it’s fair to say that sanctions are not an effective tool. Aside from protecting the US financial system from exploitation by malign actors, sanctions also act as a deterrent to future aggression. If Russia understands that if it invades its neighbors, it will suffer an unprecedented economic hit, taking it back to the bad old days of the Soviet Union, Putin may think twice before trying this again.
Just how much economic decline with Russians tolerate? Economic experts are projecting that Russia will experience a 15 percent reduction in GDP this year thanks to the onslaught of western sanctions Putin’s attack on Ukraine has caused. And this time, there is no doubt that sanctions are having an effect, because oil prices are on the rise, which does not matter if almost no one is willing to purchase Russia’s oil.
And a final thought here is that a lot of the impacts on regular Russians, as well as Russian performers and athletes are not the result of sanctions, but rather conscious decisions by certain entities to send a strong message.
Russian national and club teams have been barred from FIFA and UEFA competitions until further notice because of the invasion. The teams are not designated, but the message is clear: Russia is a pariah.
CERN will no longer engage in any new relationships with Russian scientists because of the war in Ukraine.
Russian conductor Valery Gergiev and operatic soprano Anna Netrebko are not sanctioned individuals, but they lost performance engagements in the west because of their refusal to denounce Putin and his actions.
These events are not the result of sanctions. They are the result of the world refusing to engage, transact, or otherwise work and collaborate with anyone who supports the wholesale slaughter of Ukrainian civilians in which Putin is engaged.
So yes, sanctions are a foreign policy tool that will bring the Russian economy to its knees, but the impacts of Putin’s actions go far beyond the frozen assets and travel bans.