World powers keep leaning on economic sanctions that seldom work

By KAMBIZ FOROOHAR | Bloomberg News | Published: April 25, 2016

NEW YORK — To rein in countries from North Korea to Sudan, global powers are boosting their reliance on United Nations sanctions aimed at forcing recalcitrant governments to drop weapons programs, stop attacking their civilians or respect the results of elections. They usually fail.

In March, the 15-member Security Council voted to toughen economic sanctions against North Korea, already one of the world’s most isolated regimes, for a missile launch and nuclear test that violated previous U.N. resolutions. Pyongyang responded with more launches, including one fired from a submarine on Saturday. Few analysts expect leader Kim Jong Un, who has tolerated widespread hunger and malnutrition among his people, to abandon his weapons program before he has the technology to deliver nuclear weapons to the U.S. mainland.

And while the pressure of economic sanctions is credited with helping broker a nuclear accord with Iran, that result was almost a decade in the making. Most examples are less positive.

“Sanctions have failed to achieve their objectives, and even the success stories have a mixed record,” said Daniel Wagner, who heads the Country Risk Solutions consulting firm and is author of the Political Risk Insurance Guide. “Countries have found ways around the sanctions and can counter them.”

The Security Council in April renewed year-old travel sanctions and an asset freeze on South Sudan. Members should be patient: The council has had sanctions on neighboring Sudan for 13 years. Sudanese President Umar al-Bashir, the first sitting president indicted by the International Criminal Court for fostering violence in the western Darfur region, remains defiant.

As many as 16 countries have been placed under U.N. sanctions this decade, double the number from the 1990s. Countries should be wary of seeing sanctions as a magic bullet, U.S. Treasury Secretary Jacob J. Lew said in a speech last month.

“We must guard against the impulse to reach for sanctions too lightly or in situations where they will have negligible impact,” Lew said. “And we must be conscious of the risk that overuse of sanctions could undermine our leadership position within the global economy and the effectiveness of our sanctions themselves.”

In the late 1990s and 2000s, sanctions on Iraq and the prospect of war with the U.S. failed to persuade Saddam Hussein to fully open his country to U.N. weapons inspectors. When the U.S. and its allies invaded, no program to produce weapons of mass destruction was found and the U.S. got mired into becoming an occupation force.

Sanctions have become more sophisticated since then, Lew said. The oil-for-food program placed on Iraq to help ordinary citizens while targeting military spending “wasn’t very effective,” Lew said, because “instead of providing the relief on a humanitarian basis it ended up enriching many of Saddam’s cronies.”

By contrast, Lew cited measures the U.S. imposed on Russia’s government and close allies of President Vladimir Putin in the wake of Moscow’s takeover of Crimea. “We went with targeted sanctions that went right to the inner circle and at the first stage had very little impact on the general public. We’ve learned a great deal.”

Russia was also hit by plunging prices for oil, its biggest export.

A 2013 Brown University study of 22 U.N. targeted sanctions regimes since 1991 found that the measures were effective in forcing behavior changes 10 percent of the time.

“Sanctions are applied to the most complex, intractable problems where the military option is not the solution,” said Thomas Biersteker, a professor at the Graduate Institute of Geneva, who has written extensively on sanctions.

Iran’s example shows how much patience can be required. The Security Council passed a series of restrictions on the Islamic Republic starting in 2006, demanding that the Persian Gulf country suspend all nuclear enrichment-related and reprocessing activities. Those restrictions were tightened over the years at significant cost to Iran.

Partly in response to the pressure, Tehran devalued the rial by about 50 percent in July 2013. U.S. officials said sanctions on the oil and banking industries cost Iran more than $120 billion from 2012 to mid-2015. The country’s economy shrank almost 7 percent in 2012 and 2 percent in 2013, according to International Monetary Fund data.

In this case, the slow squeeze of sanctions worked.

“Ultimately, Iran saw a choice: pursue an illicit nuclear program or rejoin the global economy,” Lew said.

©2016 Bloomberg News
Visit Bloomberg News at www.bloomberg.com
Distributed by Tribune Content Agency, LLC.

from around the web