[Ana Palacio] How to Sanction a Nuclear Enemy

The gruesome scenes left after Russia’s withdrawal from Bucha, where Ukraine accuses Russian troops of torturing and massacring civilians, have intensified pressure on the West to provide more offensive weapons to the Ukraine and for Europe to ban Russian energy imports. But beyond the legitimate question of Europe’s willingness to pay such a high price on behalf of Ukraine lies the stark reality that sanctions are no silver bullet.

Calls for sanctions began long before the invasion. When Russia was massing troops near the Ukrainian border, the Ukrainian government — and some U.S. lawmakers — urged the United States and Europe to impose preemptive sanctions and offer Ukraine stronger security guarantees. But Western leaders balked, arguing the sanctions would hamper their ability to reach a diplomatic solution.

Of course, in geopolitics as in life, the hindsight is 20/20: we now know that these diplomatic efforts were in vain. What we don’t know is whether pre-emptive sanctions would have motivated Russian President Vladimir Putin to rethink his plans, especially since the pre-emptive sanctions probably wouldn’t have been as severe as the package of measures imposed after the launch of the invasion by the Kremlin.

This package, after all, is the most comprehensive and coordinated punitive action taken against a major power since World War II. Overcoming initial reservations, the European Union joined the United States in cutting off Russian banks from the arteries of global finance within days. The West also froze a large part of the Russian central bank’s foreign exchange reserves.

At first, the sanctions seemed to have the desired effect. Within a week, the ruble had fallen by a third against the US dollar. Falling stock prices forced authorities to suspend trading on the Moscow Stock Exchange for almost a month. Russia’s gross domestic product is expected to contract by 10-15% this year.

But, even as the noose of sanctions continues to tighten, Russian markets appear to be stabilizing. Thanks to vigorous intervention by the authorities, the ruble is now trading close to its pre-war levels, and the stock market has recouped some losses. With the violence showing no signs of abating, Western governments must be clear about what sanctions can and cannot achieve – and how much sacrifice is acceptable.

The most comprehensive analysis of the use of sanctions, conducted by researchers at Drexel University, found that the objectives of sanctions were fully achieved in only 35% of cases. Where sanctions have had an impact, they have been combined with other measures to advance a specific foreign policy objective.

Moreover, even well-targeted sanctions and asset freezes have limited effectiveness against autocracies. From North Korea to Iran, dictatorial regimes protect themselves and their cronies from economic pain with convoluted schemes to evade sanctions. Putin’s regime – including his cronies – has proven adept at ensuring that sanctions do not affect them.

Instead, ordinary Russians will pay the price for today’s sanctions. And, contrary to the hopes of some in the West, it is unlikely to lead to Putin’s fall from power. Dictators are not particularly vulnerable to changes in public opinion. And a revolution does not seem imminent, not least because of the work of growing repression and the powerful propaganda machine of the Kremlin.

While Putin’s regime has insulated itself from the pain of sanctions, Europe is facing high costs itself. Although Western economies are not particularly dependent on Russia as a whole, Europe depends on it for much of its energy. So while the US Congress votes to ban all Russian energy imports, European leaders have only targeted Russian coal, not oil or gas.

A complete ban on Russian energy imports to Europe would undoubtedly increase pressure on the Kremlin. But such a decision should be approached with caution. As German Chancellor Olaf Scholz recently warned, the economic and social costs of a sudden embargo would be enormous. It will take time to wean Europe off Russian natural gas.

Equally important, sanctions are an integral part of a larger negotiation strategy. Once the West has unleashed all of its greatest economic weapons, it will have no leverage. There must be room for escalation in response to Putin’s actions, particularly the deployment of chemical or tactical nuclear weapons.

The West’s arsenal in Ukraine is clearly limited. Sanctions are an important and powerful weapon, and they put some pressure on the Kremlin. But given their limitations – and the costs that must be borne by both the West and ordinary Russians – they must be used wisely. Otherwise, Putin, who seems to believe in his paranoid propaganda and oversees the world’s largest nuclear arsenal, might conclude that he has nothing to lose.

Ana Palacio
Ana Palacio, former Minister of Foreign Affairs of Spain and former Senior Vice President and General Counsel of the World Bank Group, is a visiting lecturer at Georgetown University. — Ed.

(Project Syndicate)

By Korea Herald ([email protected])

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