There was considerable hype surrounding the sanctions on Russia at the start of the war, but now you seldom hear about sanctions. Have they worked?
After Russia launched its invasion of Ukraine in late February there have been a two-pronged response from the West aimed to show support for Ukraine and to weaken Russia, firstly it began to give the Ukrainian military support and materiel, and secondly it imposed wide ranging economic sanctions on Russia. The strategy makes intuitive sense, if we want Ukraine to win against Russia we should try to help Ukraine and hurt Russia, but five months into the conflict it seems clear that helping Ukraine has been far more effective than hurting Russia. Why is that?
Part of the answer is that giving the Ukrainian military weapons and other military materiel has a more immediate impact on the war itself than economic sanctions could; bullets kill Russian soldiers, economic sanctions don’t. But the bigger part is concerning how the Russians understand the war. As I’ve argued plenty of times on the blog, sanctions is a foreign policy tool the US is overly reliant on because they are easy to use and have a strong signaling value. In any situation where something truly important is at stake we’ve seen countries across the globe accept American sanctions without changing their ways. Nuclear weapon programmes and wars are always too big and important project to be canceled due to a US-induced recession and it shouldn’t have come as a surprise that Russia would keep fighting through the economic pain.
According to investing.com Russia’s economy is now 5% smaller than it was by the start of 2022. That is a significant decline, but I don’t think it will have a noticeable impact on Russia’s ability to wage its war against Ukraine. The pro-sanction counterpoint I sometimes hear is that sanctions take a while to really start to bite. That may well be true, but if it is I find sanctions to be a strange policy for the West to pursue in the Ukraine war if it was made with the knowledge that sanctions are slow to take hold. Sanctions make for poor deterrents given that they’re slow, and are fairly ineffective aids for Ukraine’s war effort given that sanctions effects are modest. Couple that with the fact that sanctions can only ever be used once, Russia will never enter into the same trading relationships and mechanisms again after it was cut off, and sanctions look more and more like effective signaling and little else.
There is a chance that the cumulative effect of years of hard sanctions will stall the Russian economy to a point where it really struggles to support the military, but there is also a risk that living with sustained sanctions Russia learns to adapt. A country as large as Russia, in terms of both population and geography, has the necessary ingredients to be able to build a functioning domestic economy that can keep going in spite of sanctions. It remains to be seen whether it does, but I think it’s safe to say that economic sanctions have been less effective than many experts would have expected. If the war continues let’s hope our policymakers are able to come up with better strategies to help Ukraine and her people.
If you liked this post you can read a previous post about HIMARS here or the rest of my writings here. It would mean a lot to me if you recommended the blog to a friend or coworker. Come back next Monday for a new post!
I've always been interested in politics, economics, and the interplay between. The blog is a place for me to explore different ideas and concepts relating to economics or politics, be that national or international. The goal for the blog is to make you think; to provide new perspectives.
Written by Karl Johansson
Sources:
Comments