Economic sanctions debunked

By Megan Wang|June 18, 2019|Insight|

Hassan Hakimian outlines seven misconceptions behind the idea and practice of economic sanctions

The use of economic sanctions to achieve international political objectives has been on the rise in the past century. Since WWI, sanctions have gained increasing pertinence in the complex world of conflict between nations, which has been traditionally viewed in binary terms of war and peace. The MENA region has been home to many sanctions, often acting as the testing ground for some of the ‘harshest sanctions in history’.

In the 1990s, the world saw on average more than seven sanctions annually (totalling 67 between 1990 and 1999). Two-thirds of these were US unilateral sanctions, and during the presidency of Bill Clinton alone it is estimated that around 40 per cent of the world’s population (2.3 billion in total) were subject to the wrath of some form of US sanctions.

Currently, the US has nearly 8,000 sanctions in place worldwide – with Iran by far the harshest state target of these sanctions. Russia too has sanctions against Georgia, Moldova and Ukraine and China uses them against Japan and the Philippines over maritime disputes. The great majority of sanctions are indeed imposed by large countries against smaller nations. It is thus fanciful to expect Luxembourg to impose sanctions against Germany or San Marino against Italy!

Multilateral sanctions introduced under Article 41 by the United Nations Security Council too have been on the rise. Since the 1960s – when arguably the most successful sanctions played a key role in dismantling the apartheid regimes in South Africa and Rhodesia – a total of 30 UN sanctions have been levied against states and non-state entities such as Al- Qaeda, the Taliban and, more recently, the so-called Islamic State.

Despite their growing incidence, the ‘success’ rate of sanctions has been at best questionable. In one of the most comprehensive studies examining some 170 sanctions in the 20th century, Hufbauer et al in 2009 concluded that only one-third of these succeeded in attaining their stated objectives. Another study by Robert Pape in 1997 put the same rate at less than 5 per cent.

Effective or failed, popular or feared, a wide gap separates the perspectives of the targets from those imposing these sanctions. In general, senders have to provide legitimacy for their actions in the court of international public opinion in which their perspectives arguably dominate.

In general, the imposition of economic sanctions has been accompanied by seven misconceptions or fallacies that have arguably emanated from the hegemonic perspective of the imposing nations. These have tainted our understanding of the rationale and effectiveness of sanctions and need to be debunked.

First, sanctions are justified as gentler and more humane alternatives to war. But this underrates the potential role of international diplomacy in conflict resolution as well as the indiscriminate violence associated with sanctions against the targets. In reality, many sanctions do not supplant wars; on the contrary, they pave the way for wars as witnessed by the thirteen-year long Iraqi sanctions (1990-2003), which culminated in the US invasion of the country in 2003. Under present circumstances too, destabilising Iran by sanctions or military threat is set to make the entire region more dangerous than ever.

A second argument is that ‘if sanctions are hurting, they are working’. But this overlooks both the choice of the metric for ‘success’ and runs in the face of evidence which suggests sanctions hurt large swathes of the ordinary population even when essentials like food and medicine are officially excluded. Sanctions stymie economic growth, stoke price rises through import compressions and currency crises, and undermine production and output by fuelling capacity underutilisation, if not outright failure of enterprises leading to mass layoffs and unemployment.

Third, sanctions are deemed to be smart and impact in a targeted fashion. But in reality, comprehensive economic sanctions act as collective punishments squeezing out the middle classes and imposing a disproportionate burden on the lowest, most vulnerable, income groups. These are arguably the victims of the very evil regimes sanctions are designed to punish. This is effectively like taking aim at the passengers of a bus with a delinquent driver in control, hoping that the threat to the passengers will lead the driver to blink first! No wonder why some commentators have likened economic sanctions to ‘weapons of mass destruction’, ‘murder’ and ‘carpet bombs’!

Fourth, sanctions are justified by some as a way to uphold and promote human rights. This too runs contrary to the evidence, which suggests that civil society entities and NGOs are generally the primary losers in the post-sanctions era. Authoritarian regimes seize on the opportunity afforded by sanctions (which they project as aggression and ‘economic warfare’) to claim legitimacy in their defence of ‘national interest’.

This is how Trump’s withdrawal from the Nuclear Deal in 2018 has given Iran’s hardliners a new lease of life, claiming their distrust of the USA was well placed and pushing back against the centrist administration of Hassan Rouhani. Similarly, the earlier sanctions against Saddam Hussein’s Iraq led to the wholesale destruction of civil society there, helping to stoke the identity politics and sectarianism that continue to bedevil Iraq and the wider region.

Fifth, sanctions are deemed necessary and effective for regime change. This is probably the weakest point in the litany of arguments in favour of sanctions. Sanctions have a poor record in bringing about regime change, as attested to by the longevity of sanctioned regimes in several countries such as Zimbabwe, DPRK,Cuba and Myanmar. Even the blockade imposed on Qatar by Saudi Arabia, the UAE, Bahrain, and Egypt since June 2017, has led to a significant rallying of the population behind the Emir and boosted his popularity.

Sixth, sanctions are said to weaken the targeted governments. But by worsening the business and investment climate, economic sanctions take their toll primarily on the private sector. If anything, power becomes more centralised and concentrated as governments increasingly control supplies of strategic commodities.

Finally, sanctions are supposedly effective in containing nuclear proliferation. Their record here, too, is demonstrably poor. Since the Non-Proliferation Treaty entered into force in 1970, four countries have acquired nuclear weapons: Israel, India, Pakistan and North Korea. Three of them did so while under sanctions.

Ultimately, the success or failure of economic sanctions depends on whether they bring about regime change or change a government’s behaviour. Given the prevailing misconceptions about their rationale, it is not surprising that economic sanctions so often achieve neither goal. An earlier version of this article was published by the Project Syndicate website (https://www.project-syndicate.org/) in May 2019

Hassan Hakimian is Director of the London Middle East Institute and a Reader in the Department of Economics at SOAS. He was President of the International Iranian Economic Association (IIEA) and is Series Editor for the ‘Routledge Political Economy of the Middle East’

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This article appears in the Final Issue of The Middle East in London.

Hakimian, Hassan. ‘Economic sanctions debunked’ The Middle East in London 15, no. 4 (June–July 2019): 5-6.