Should we sanction sanctions?
Rachel Corbally // 6 August 2018
In recent years, Russia has been a prime target of economic sanctions – a longtime tactic in relations between Russia and the West. In fact, it took the US until 2012 to lift trade restrictions against the Soviet Union dating back to the mid-1970s!
More recently, the EU decided to continue its 2014 sanctions imposed in response to the Russian annexation of Crimea.
Russia annexed Crimea, the peninsula of Southern Ukraine, after protests erupted over Ukraine had abandoned an association agreement with the EU. Russia continued to provoke Ukraine, with the rise of pro-Russian and pro-European conflicts, increasing troops on the border, and placing economic pressure on the Ukrainian economy. Clashes resulted in a high number of civilian deaths. There is no doubt about Russia’s involvement in Eastern Ukraine, as Russian equipment and troops have both been confirmed by the UN.
Herman Van Rompuy, then Council President of the European Union, declared in response to the annexation and instability in Ukraine, that “[The European Union] calls on Russia to refrain from any steps to further destabilize Ukraine and instead to engage in a diplomatic resolution of the crisis,” and that “further steps in destabilizing Ukraine will call for additional sanctions.” His statement held true. Earlier this month, when there was no evidence of improvement, the Union resorted to extending its sanctions. But is the answer to the conflict, yet again, economic sanctions?
Supporters of sanctions have claimed that the pressure to replace Russia as a trade partner has resulted in a recession in Russia while leading to new, profitable trade opportunities for the EU. However, these consequences are not adequate measures of the success of sanctions since, despite the fall in Russian economy, Russian military presence in Ukraine did not cease. Russia still occupies Crimea and continues to support separatist forces in Ukraine. Given that the primary purpose of the sanctions was to condemn and penalize the annexation, the sanctions should only be deemed successful if Russia removes itself and its influence from Ukraine and Crimea. Consequently, through this understanding of the sanctions, they cannot be seen as effective.
Why are we so loyal to sanctions for facilitating international cooperation, when their success hinges on international cooperation and multilateral implementation? Perhaps there is a better solution than imposing economic barriers and being subject to similar sanctions in retaliation.
After World War II, some European states took a very different approach to improving international relations. The 1951 Treaty of Paris created the European Coal and Steel Community (ECSC), which aimed to replace historical rivalries with an economic community as its “common destiny.” The ECSC pledged to contribute to economic expansion – successfully raising employment and improving living standards of those living in participant nations. Present-day sanctions, however, appear to operate with the opposite logic.
The most recent sanctions against Russia by the EU include a ban on investments, tourism, and imports and exports of goods to and from Crimea. The hope is that by targeting the economy of Crimea, the effects will ripple to Russia, and thus make it economically worthwhile for Russia to remove itself from the peninsula. Yet this policy damages the economies of both parties, unlike the Treaty which seeks mutual gains.
In many ways, Europe’s 1950s strategy was more successful than the sanctions politicians rely on today. France and Germany’s economic outlook improved significantly. Between 1955 and 1969, Germany’s GDP per capita increased from $5797 in $10440 in 1969 – and in France, from $6199 to $10886. Since German unification and the end of the Cold War, the relationship between France and Germany has been more than amicable – and consequently, economically successful.
While the political environment of France and Germany varies considerably from that of Russia and Ukraine, in both cases, cooperation could prevent future aggression. Post-war Germany was feared by its neighbours – a fear which drove the Allied powers to ensure that neither Germany nor its neighbours would retaliate for the past. Of course, present-day Russia is an autocratic, expansionist state, while 1950s Germany was a liberal, democratic nation – and yet, the present sanctions against Russia are justified by similar logic. In recent years, the Kremlin has shown its willingness to risk financial downturn in pursuing their expansionist aims. Their economy has fallen into recession thanks to the penalties imposed on it – yet Russian officials have not wavered in their outlook on Ukraine. What would stop Russia from expanding beyond Ukraine, given that its current behaviour is already condemned by the international community?
The need to re-evaluate our approach to Russia is becoming increasingly urgent – not for the sake of the EU – but for Ukraine itself. Politicians on both sides of the debate may condemn Russia-Ukraine aggression, but it has been five years and, so far, nothing has changed. The point of contention should not be whether to pardon Russia for their interventions in Ukraine and Crimea – but, pragmatically, how we can best limit their behaviour and bring about peace.
How many more years need to go by, how many more Ukrainians – and potentially others – must fall victim to Russian oppression, before we realise that sanctions provide, at best, an imperfect solution.
All opinions expressed in this article belong to the author only and are not necessarily endorsed by EPICENTER.
EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).
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