Monday, March 31, 2014

Sanctions a Beneficial Policy Tool?

Are sanctions a beneficial policy tool?

Before we start answering that question, let us remind ourselves that according to Merriam-Webster's Online Dictionary, sanctions are defined as,
"An action that is taken or an order that is given to force a country to obey international laws by limiting or stopping trade with that country, by not allowing economic aid for that country, etc."

So now to answer the question. Should sanctions be used to push the United States agenda? Are you ready for this? Ok here you go.

Sanctions don't work.

Simply put, sanctions are not an effective tool in foreign policy. Today, I would like to highlight five reasons why United States sanctions are doomed to fail.

1. It's a global market.
United States sanctions are supposed to punish the economy of the target nation by revoking them access to the United States economy. Our politicians apparently believe that the United States economy is so important that losing access to our economy alone will substantially hurt the economy of the sanctioned nation. 

While it is true that the United States economy is strong, countries can still survive just fine without goods from the United States. Indeed, according to the Federal Reserve Bank of New York, only 8.5% of the world's exports came from the United States in 2010.

I think it's safe to say that the targeted country will manage to find a way to get by with the 91.5% of world exports they can receive from other countries. (US imports in case you were wondering are only slightly higher at 12.3%.)

2. Sanctions hurt the economy of the United States.
Oh, and did I mention that sanctions prevent the United States companies from freely trading with the target nations? Yes, indeed, the target nations find other suppliers from countries, like Canada, China, England, or Russia, but the United States businesses are still deprived of a trading partner.

We should heed the words of Dr. C. Fred Bergsten, founder of The Peterson Institute for International Economics, in 1998, when,
"We lose exports...on the order of at least $15 billion to $20 billion per year as a result of our own sanctions against other countries. Those results are probably greatly understated because, over the long term, we acquire the reputation of being an unreliable supplier...Those are big losses to the American economy, probably on the order of a quarter of a million high-paying jobs a year... Those are losses that are highly discriminatory... because they hit companies and workers who just happen to sell to countries that we don’t like that year. In short, a cost-benefit analysis suggests that sanctions are one of the worst foreign policy tools we have."

3. They tend to punish the people of the country, rather than those responsible.
But let's just take a step back for a second and assume incorrectly that sanctions actually achieve their objective -  they actually hurt the target nation. That's great, right? Not exactly.

Sanctions try to coerce nations to our will by limiting trade between the two countries. But think just for a minute about your country's commerce. Who trades with other nations? It's not a government to government deal. No, trade generally happens between one private citizen to another, or from one private business to another.

But the people within these countries are not responsible for the actions of their government! Nor is there any guarantee that the government of this nation will care about the suffering of the people. All we've managed to do thus far is harm the people of the target nation (and our own) all for naught, as the government keeps going on its merry way. As Professor Charles A. Rarick says in 2007,
"Economic sanctions deprive the people of the sanctioned country their basic right to a better standard of living."

4. Rally around the flag.
But it gets worse. Not only do sanctions have only a negligible negative impact on the government, sanctions generally strengthen the position of the government. To see why, simply picture some siblings.

Siblings are not necessarily always friendly with one another. They fight. In extreme circumstances, they can even go through entire months where they don't speak to one another. But as soon as you attack one sibling, you better expect the wrath of the rest. All prior anger, all grudges, and all tension between the siblings disappears when one is confronted.

This same principle applies to countries as well. Citizens may not like the actions of their political leaders, but as soon as you attack them, patriotism takes over, and the citizens suddenly are avid supporters of their government. This phenomena is called the "Rally around the flag."

In addition, sanctions provide a convenient scapegoat to dictators for the poverty of the people. Kim Jong-Un can shrug off his oppression of the North Koreans, as he can just blame the United States sanctions. I seriously think that anti-US propaganda is already strong enough in countries like Cuba and North Korea that we really shouldn't be giving them any legitimate grievances.

But sanctions do just that. Ivan Eland, Ph.D. explains in 2006,
"Also undermining the achievement of sanctions’ political goals is the 'rally around the flag' effect. When attacked, either militarily or economically, by a foreign power, the populace of a country usually rallies around the existing leader—no matter how odious he or she may be. Fidel Castro, despite the disastrous consequences of his centralization of the Cuban economy, has been able to blame poverty and economic stagnation on the coercive economic measures imposed by his powerful northern neighbor. In other words, the Cuban people likely would have thrown out Castro long ago if the United States hadn’t declared him 'enemy number one.'"

5. Sanctions make us feel like we're doing something to help.
But it is understandable why we would like sanctions. Sometimes, we see problems in the world that we feel need to be addressed, but we know that it would be unwise to intervene militarily in those areas. We view sanctions as an opportunity to do something. To make a difference in the world.

But our intentions and hopes just don't match with reality. We feel good that we've helped these people in their crisis, but we haven't. As the aforementioned article from Charles A. Rarick notes, sanctions at best succeed only 20% of the time. They simply are not effective tools in foreign policy.

But we keep using them. But it's all for naught. Or maybe it's all for us. Either way, we need to admit that sanctions just don't work.

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