Advantages and Disadvantages of Economic Sanctions

Advantages and Disadvantages of Economic Sanctions

Economic sanctions are penalties imposed by a particular country or a supranational organization against a target self-governing state, groups or organizations, and individuals. They have been a popular tool used by influential international political actors to advance specific domestic agenda or achieve specific outcomes within the realms of international relations.

These sanctions take different forms. They range from as simple as travel bans or restrictions in migration policies to raising trade barriers, export restrictions, embargoes, seizure or freezing of assets, and capital controls or restricting access to capital markets.

The Advantages of Economic Sanctions: Applications and Effectiveness

Note that the specific purpose of economic sanctions depends on the context in which they are used. The United States and the European Union have used them as a foreign policy tool to promote a political agenda or influence global affairs. Some uses represent an example of hard power diplomacy and a form of non-military intervention.

To understand the advantages of economic sanctions, it is important to also take a look at how it has been applied in the real-world setting, the specific intention behind their imposition, as well as its effectiveness or the resulting outcome.

A Foreign Policy Tool for Dealing With Other Nations and Promoting or Advancing National Interest

One of the advantages of economic sanctions is that they can be integrated as an element of the entire foreign policy or foreign relations strategy of a country. Jonathan Masters of the Council on Foreign Relations explained that sanctions have been used to advance a range of foreign policy goals or to punish entities or actors that violate international norms.

The United States has imposed sanctions to deal with other nations. Examples include the 1807 Embargo Act aimed at forcing Britain and France to uphold the rights of Americans, the restrictions on Chinese companies linked with the Iranian nuclear program, and the sanctions imposed on North Korea to mitigate the threat from its nuclear program.

Russia has also maximized the advantages of economic sanctions to achieve its political goals. Analysts H. A. Conley, J. Mina, R. Stefanov, and M. Vladimirov said the Russian government has been focusing on targeting pro-Western states of the former Soviet Union and the Eastern Bloc aspiring to join the European Union or NATO.

Note that Russia sanctions Georgia after Mikheil Saakashvili became the third president of the country in 2004. The Georgian president expressed his desires to join the E.U. and NATO. These plans did not sit well with Vladimir Putin. To preserve its national interest, Russia actively prevents former Soviet Union countries from joining Western alliances.

Influencing Policies in a Target State or Non-State and the Behaviors of Influential Leaders and Organizations

Aside from advancing the national interest of the sanctioning country or the collective interests of the members of a supranational organization, another notable purpose of economic sanctions is to influence the domestic policy direction of the target country or change the leadership conduct or behavior of specific target state and non-state actors.

One example is the Comprehensive Anti-Apartheid Act of 1986 which was passed and eventually enacted by the U.S. Congress through veto override to impose sanctions against South Africa and compel its government to end the system of apartheid in its country. The law included five preconditions that South Africa must meet for the U.S. to lift the sanctions.

The impact was initially limited because of the partial enforcement of the law under the Reagan administration. However, the Bush administration enforced the law to its full extent beginning in 1989. South African President F. W. de Klerk adopted measures from 1990 to 1991 to meet the preconditions. These included the release of Nelson Mandela and other political prisoners.

Another example was Resolution 1970 passed in 2011 and extended further in 2018 by the United Nations Security Council as a response to the humanitarian abuses during the First Libyan Civil War. It involved an arms embargo against Libya, a travel ban on all Libya-bound flights, and asset freezes on all assets owned by Libyan authorities.

The Russian sanction on Georgia that began in 2006 had influenced Georgian politics. In his, Randall E. Newnham, a political science professor specializing in aid and sanctions as a foreign policy tool, explained that the economic sanctions seemed to have succeeded, as evident from the expulsion of Saakashvili and his party from office in 2012 and 2013.

Promoting Peace and Security and Responding to Military Threats Through Non-Military Intervention

Another advantage of economic sanctions is that they can be used as a collective tool to maintain peace and security in the global environment or respond to military threats without using military intervention or armed force. This fact has been exemplified in numerous events and issues involving brewing armed conflicts and threats from supposed aggressors.

One of the popular forms of sanction is the ban on arms trade or an arms embargo. Banning countries or companies from exporting military hardware and equipment such as weapons and munitions to an alleged aggressor or a state or organization with pronounced security threat effectively limits and possibly cripples its military capabilities.

The United States has also used different forms of sanctions as part of its conflict with Iran, especially as part of its effort to stop the Iranian nuclear program. The United Nations also rolled out similar actions. In 2006, the Iranian government announced that it had dismantled critical parts of its nuclear program. Some of the sanctions were lifted subsequently.

Another example was the multilateral sanctions rolled out against Russia during the entire run of the Russia-Ukraine conflict that began in February 2014 including its annexation of Crimea. More sanctions from the U.S. and the E.U. had been rolled out in response to the invasion of Ukraine by the Russian Armed Forces beginning in February 2022.

Building and Maintaining Competitive Advantage in the Global Economy and the Global Competitive Environment

In some situations, economic sanctions have been used to gain and maintain a competitive advantage in the global market. These sanctions are usually in the form of trade restrictions and embargoes. For example, from 1973 to 1974, the Organization of the Petroleum Exporting Countries or OPEC declared an oil embargo against the U.S. and other countries.

Note that OPEC was established in 1960 as an intergovernmental organization and as a formal global cartel that aims to promote the economic interest of its members. Its specific purpose is to coordinate the petroleum policies of its members and stabilize the global oil market, especially through direct control of oil supply and indirect influence on the global oil prices.

The 1973-1974 Oil Embargo was specifically a response against countries that supported Israel in the Yom Kippur War. But it also had another purpose. The embargo was an opportunity for OPEC to demonstrate the collective capabilities of its member countries and exert their influence on the specific global oil market and the greater global economy.

Nevertheless, the creation of OPEC has allowed its members to gain a competitive advantage against multinational oil and gas companies in the United States and other Western countries. These companies used to dictate the price of petroleum in the global market. Most of these pricing decisions were unfavorable to oil producers and exporters.

The Cold War also saw the use of sanctions both as a foreign policy tool and as an economic strategy. The book “Economic Cold War” by history and international relations professor Shu Guang Zhang explained these sanctions served as economic warfare and economic diplomacy measures intended to promote the economic interest of the sanctioning actor.

It also explained how the U.S. used embargoes to weaken the Sino-Soviet alliance. As an example, The Great Leap Forward of China failed in part due to the economic sanctions imposed by the U.S. and its Western allies. China was also driven to press the Soviet Union for greater economic assistance beyond what Moscow can provide.

The Disadvantages of Economic Sanctions: Limitations and Criticisms

Economic sanctions have numerous applications and can be an effective tool in meeting the domestic and foreign policy goals and objectives of a particular country, as well as part of strategies aimed at promoting national security, responding to security threats, and maintaining peace and order in the international environment.

However, its effectiveness is not absolute. The use of sanctions has also been criticized by several analysts, leaders, and humanitarian advocates. To understand the disadvantages of economic sanctions, it is imperative to look at their limitations and criticisms.

Limited Effectiveness in Influencing the Policies of Target Countries and the Conduct of Their Leaders

One of the criticisms of economic sanctions is relevance. Several critics have maintained that their effectiveness remains debatable. There are real-world examples and several instances in which imposed sanctions proved to be ineffective in meeting the desired outcomes of the sanctioning country or supranational organization or in influencing targets.

Myanmar remains a good example of the ineffectiveness of economic sanctions. Note that this country was in a military rule that started in 1962. Reports of government oppression of political dissidents prompted countries such as the U.S. and the U.K. to sanction the government in an attempt to influence the domestic policies of the military government.

However, despite the negative effects of these sanctions on the economy of Myanmar, its leaders were unfaced. Political oppression remained rampant. The military had cracked down unarmed protests. Human rights abuses were pervasive. A political reform started in 2011. Aung San Suu Kyi was elected State Counselor and Win Myint as President in 2020.

The military staged a coup due to alleged massive cheating during the 2020 election. They placed Aung San Suu Kyi and Win Myint under house arrest. It also declared a state of emergency and began closing its borders. The political situation in Myanmar showed that sanctions imposed by foreign countries have limited to zero effect.

Ineffective in Crippling a Country with No Significant Exposure to the Economy of the Sanctioning Country

Globalization supplements either the advantages or disadvantages of economic sanctions. Remember that the process of economic globalization has allowed countries to become more interconnected and interdependent toward one another. The level of dependence of a target country determines the impacts and limitations of sanctions.

North Korea is a prime example of a country unbothered by the sanctions imposed by Western powers onto its government and its entire economy. Of course, its economy remains relatively underdeveloped due to high incidents of poverty and prevalence of hunger, as well as the absence of diverse and productive industries and sectors.

The country also remains adamant about moving from an economic system based on communism to a more market-oriented system. The reason behind its refusal to bow down to the requests of Western powers is that it has been politically and economically dependent on China. It believes that it can survive solely through assistance from China.

Of course, to effectively cripple the economy of a target country, it should have a significant level of exposure to the economy of the sanctioning country or the economies and markets of a supranational organization or other multilateral associations. The North Korean experience has been observed in sanctioned countries such as Iran and Russia.

The sanctions against Iran and Russia depressed their respective economies and paralyzed some areas of their industries and sectors. However, these countries remain somewhat adamant because of their access to other political and economic partners. The presence of these partners gives target countries a motivation to disregard the demands of sanctioning countries.

Military Intervention or the Use of Armed Forces Might Be More Effective than Non-Military Actions

There are also instances in the past when the use of non-military interventions such as sanctions proved to be ineffective in maintaining peace or responding to security threats. In the case of economic sanctions, remember that its effectiveness can only be determined by the level of its dependence on the economies of the sanctioning countries.

Research on the subject during the 1960s and 1960s arrived at a conclusion and consensus that economic sanctions were not effective as a military force. American political scientist Robert A. Pape examined 40 instances. His findings showed that 18 had to be settled through direct or indirect use of force and 8 showed unresponsive target countries.

A prime example is Russia. Remember that the Russia-Ukraine War compelled countries such as the U.S., the U.K., and several countries in the E.U. to impose sanctions against the Russian economy and the Russian oligarchs. The series of sanctions rolled out after the February 2022 attack did not force the Russian Armed Forces to back down.

The Armed Forces of Ukraine has remained in a defensive position as the Russian Armed Forces march further toward its interiors. There have been negotiations attended by the two countries and brokerage by other countries and parties. However, Putin still adheres to his notion that Ukraine should be part of Russia or the global alliance he intends to create.

North Korea is also another example. The country has remained isolated from the rest of the world except China. However, its isolation has not deterred it from building advanced weaponry and an alleged nuclear offensive and defensive capabilities. The same has been observed in countries such as Iran as evident from its on-off relationship with the Wester.

Several countries also sanction Iraq during its invasion of Kuwait. Several countries rolled out comprehensive sanctions intended to force Saddam Hussein to withdraw from Kuwait. However, nearly six months, he refused to adhere to demands. The U.S. was forced to launch the armed operative called Operation Desert Storm to liberate Kuwait from Iraq.

Economic Sanctions Produce Unintended Consequences to Ordinary People and Non-Target Parties

The unintended consequences to non-target countries and parties, as well as the ordinary citizens and facets of the target countries, collectively represent the most damning of all of the disadvantages of economic sanctions. Analyst Dursun Peksen raised the question of whether or not sanctions compel governments to uphold human rights.

He used time-series and cross-national data from 1981 to 2000 to answer his question. His findings suggest the counterproductive impact of economic sanctions. To be specific, his analysis revealed that these sanctions worsened government respect for physical integrity rights, freedom from disappearances, extra-judicial killings, torture, and political imprisonment.

The results also showed that sanctioned countries had created environments that were more detrimental to human rights. This is true for extensive sanctions and when compared to partial or selective sanctions. Multilateral sanctions also had a greater overall negative impact on the civil and innate human rights of the citizens than unilateral sanctions.

Sanctions also affect ordinary people. Some policy analysts have called them a weapon of mass destruction. The review study of F. Habibzadeh mentioned that the U.N. Security Council Resolution 661 that sanctioned Iraq in 1990 effectively killed about 1.5 million people in the country. This number was more than the death toll in Hiroshima bombing.

The study explained further that the deaths come from unintended health-related consequences.  Economic sanctions fundamentally prompt the unavailability of life-saving medicines soon after their implementation. They either cut down the supply of drugs from foraging countries or disrupt the domestic production of these drugs and other therapeutics.

Of course, because these sanctions affect the economic direction of a target country, their implementation resulted in an economic downfall as evident from unfavorable macroeconomic indicators. Myanmar was one of the richest countries in Southeast Asia before the military regime. Sanctions effectively placed people below the poverty line.

The Russia-Ukraine War also showed negative effects of economic sanctions on non-target countries and parties. The ban on Russian hydrocarbon products resulted in sharp increases in the global prices of petroleum. Several economies recovering from the impacts of the COVID-19 pandemic have been threatened by higher inflation rates and business slowdowns.

Pros and Cons of Economic Sanctions: Benefits and Problems

Based on the discussions above, economic sanctions have been used as part of the domestic policy of a particular country, a tool of foreign policy, and as a means to influence international relations and manage conflicts without military intervention. Some countries find them beneficial as evident from their continued use in modern global political affairs.

However, the disadvantages of economic sanctions, especially their negative impacts and the limitations of their effectiveness demonstrate their problems. These problems range from its inability to influence the domestic policies of a target country and compel leaders or actors to change their behaviors, to their tendency to produce unintended consequences.


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