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Ukraine war
OpinionComment
Sameed Basha
Sameed Basha

Opinion | Can US economic sanctions still work in a multipolar world?

  • Sanctions have rarely succeeded in deterring authoritarian regimes; instead, they lead to increased economic hardship among ordinary people
  • Today, shifting global alliances are weakening the effect of Western sanctions as targeted states like Russia and Iran form new ties

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Russian President Vladimir Putin speaks at an event in Kubinka, Russia, on August 14. Photo: EPA-EFE/Kremlin Pool
Sameed Basha
The shift in global alliances is bringing together countries like Iran and Russia, two pariah states that have borne the brunt of US-led sanctions and criticism for many decades. They present an ever-growing axis of countries flaunting transgressions against the declining influence of the United States. With more sanctions on the way for Russia, do US economic sanctions work, or are they a toothless endeavour?
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The failure rate of sanctions is anything from 65 per cent to 95 per cent, according to one 2015 study, with the by-product being a degradation of human rights within the targeted country. Governments or regimes can use sanctions to rally nationalist support, and if there is a lack of democratic process within the country, as in the case of Iran and Russia, the public has little say and few alternatives.
Sanctions targeting Russia after it annexed Crimea failed to deter Moscow from its offensive in Ukraine. Instead, they helped unify the country behind President Vladimir Putin, allowing him to eliminate leaders who opposed him, like Alexei Navalny, and entrap elites who did not share his opinion of the world.

Economic sanctions are the middle ground between diplomatic pressure and outright war. They can range from embargoes and asset freezing to targeting individuals’ movement and finances. Often, they do not affect the government as much as they put pressure on the public, strangling them with inflation and burdening them fiscally in the hopes of triggering political reform through civil dissent.

People pass a currency exchange office with a screen displaying the exchange rate of the US dollar in St. Petersburg, Russia, on August 8. Photo: EPA-EFE
People pass a currency exchange office with a screen displaying the exchange rate of the US dollar in St. Petersburg, Russia, on August 8. Photo: EPA-EFE

The impact of US sanctions can vary; historically, countries that are in geographic proximity to the US are affected more than those further away. However, on average, US sanctions cut a targeted state’s annual GDP growth by 0.75-1 percentage points. The impact on growth is limited to seven years, yielding a 13.4 per cent aggregated decline in GDP over that period.

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