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Russia and the Futility of Sanctions

The Washington Post wants [1] the U.S. to subordinate all other interests to punishing Russia:

Russia will respond with sanctions of its own, including against Western companies in Russia. Governments must be prepared to discount that damage [bold mine-DL], knowing that the economic cost to Russia — including from its own sanctions — will be far greater.

The most important piece of the Western response will be staying power. The policy probably won’t bring quick results, other than Russian retaliation. Mr. Putin may respond with more aggression [bold mine-DL]. He may seek an early “normalization” of relations, dangling as a lure Moscow’s supposed influence over Iran and Syria or its facilitation of shipping to Afghanistan. The Obama administration should not abandon its work with Russia in these areas, but it also cannot temper its reaction to the situation in Crimea on behalf of other interests. If Mr. Putin threatens to suspend cooperation, the response should be to call his bluff.

As we can see from this, the case for a punitive response to Russia’s incursion is remarkably weak. Sanctioning Russia isn’t likely to yield any improvement in Russian behavior, it will in all likelihood produce even more undesirable behavior, and it could very well undermine U.S. goals on a number of otherwise unrelated issues. U.S. and European companies will very likely suffer from retaliatory measures, many European allies will suffer substantial economic harm, and the ongoing escalation of tensions could result in an armed conflict in Ukraine that the punitive measures are supposedly intended to prevent.

There is not much reason to think that a sanctions policy will have many good results over the longer term, either. Sanctions generally don’t get the results that their advocates want, and they have more often than not strengthened the domestic position of the targeted regime. This makes it that much less likely that the regime will feel compelled to yield to demands from other governments. However, it is likely that sanctions on Russian banks could backfire on Western governments in a number of ways. Jamila Trindle outlined [2] what that could mean last week:

If the United States tries to isolate Russia financially, Juan Zarate, formerly a senior Treasury Department official charged with overseeing the Bush administration’s sanctions program, said the effort could backfire. If Russian banks are cut off from the financial system by sanctions, they could react by slacking off on enforcement of those rules or creating financial havens for sanctions-breakers and criminals.

It is true that Russia would experience more economic pain, and would experience it much sooner [3], than European countries that have to endure Russian retaliation, but it’s also true that Moscow believes that it has far more at stake in this crisis than the U.S. or EU do. Besides, there are few things that seem to appeal more to authoritarian nationalist leaders than to defy overt Western efforts to compel changes in their behavior.

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12 Comments To "Russia and the Futility of Sanctions"

#1 Comment By Grumpy Old Man On March 17, 2014 @ 1:13 am

It’s their backyard, the traditional found of Russian Orthodoxy. We have almost no interests there. We can “tut tut,” I suppose, but the answer to that is, “Kosovo.”

Why can’t the neocon clowns (Max Boot, Krauthammer, McCain) and the liberal internationalist jokers (Paul Berman, Samantha Power), just be quiet for once? Noise and threats we can’t afford to carry out are so much annoying chin music.

#2 Comment By Max Planck On March 17, 2014 @ 10:27 am

Sanctions are not “futile.” And this is where what is normally a sensible point of view veers into the realm of the extreme, because having disavowed military action, it now follows we should just sleep this one off and get over it. I don’t think so.

I think tough economic sanctions are in order, and removal from the G-8 is warranted. There has to be SOME price to pay for this thuggery, and the West should make them pay it. I’m not in favor of military action or bluster, but economic isolation is powerful leverage.

It is amazing how many professional mind readers have come out of the woodwork in the past week…..

#3 Comment By Brooklyn Blue Dog On March 17, 2014 @ 10:31 am

The impulse on the hard right to hit hard always assumes that the recipient will then back down. However, all evidence is to the contrary; it serves only to solidify support for the policy we are supposedly punishing. No better way to rally Russians around Putin than to take punitive measures towards Putin.

Better to just let the market speak on this issue. Europe will start to seek alternatives to Russian gas as sure as the night follows the day. Ukrainians will seek to get away from Russia as fast as possible. The other former Soviet republics will seek to distance themselves from Moscow. Capital — both Russian and foreign — will continue to flee Russia. Russia will continue its downward spiral as a weak, aging and corrupt petro-state. Why buck it up with hardline policies that will accomplish nothing for us and only serve Putin’s interests?

#4 Comment By WorkingClass On March 17, 2014 @ 11:14 am

When Washington was the worlds only super power it was possible to accomplish the destruction of the economy of sovereign nations without a naval blockade. Washington ain’t so super any more. The Brits, the EU, the BRICKS – none of them want economic war with Russia and China. Now that the US is an industrial midget and the world’s biggest debtor nation it is in no position to intimidate Russia. Talk of “sanctions” is ridiculous and embarrassing.

Thanks Danial for reading the Washington Post so we don’t have to.

#5 Comment By Hunsdon On March 17, 2014 @ 11:19 am

So this is our fight because we made it our fight. Why did we make it our fight, again, exactly?

#6 Comment By VikingLS On March 17, 2014 @ 12:58 pm

“There has to be SOME price to pay for this thuggery, and the West should make them pay it.”

It won’t hurt Putin in the slightest. It will screw over ordinary Russians and US or Russian based multinationals doing business in either country and those people who need the services provided by those multinationals. while Obama comes off looking like the bad guy.

Russia’s “thuggery” in the Crimea has been far less brutal than American actions in Iraq, Libya, and Afghanistan. So far nobody in the Crimea is dead. Let’s keep some perspective here.

#7 Comment By Fran Macadam On March 17, 2014 @ 1:27 pm

“Why did we make it our fight, again, exactly?”

Under the doctrine of “Full Spectrum Dominance,” all nations on the earth are to brought under American military, economic and cultural subjection. The Ukraine happened to become the latest battleground. The especially unfortunate aspect is that this American policy does not coincide with the economic interests of the American people, but rather with those of a democratically unaccountable elite.

#8 Comment By Patrick D On March 17, 2014 @ 1:55 pm

“There has to be SOME price to pay for this thuggery, and the West should make them pay it.”

Strategic Russian naval facilities are threatened by foreign-inspired instability in the Ukraine.

How about the U.S. imposes the same sanctions on Russia that were imposed on Bahrain, Saudi Arabia, and the UAE when those countries squashed protests in Bahrain, HQ of the U.S. 5th Fleet?

#9 Comment By AtomicLobster On March 17, 2014 @ 2:04 pm

It is not an either/or question here (sanctions or stand by and do nothing) Crafty, smart diplomacy behind the scenes can get a lot accomplished, but that takes a lot of skill, hard work, and patience. Attributes we haven’t much seen coming out of Washington in a long, long time.

#10 Comment By Richard Parker On March 18, 2014 @ 11:46 am

“There has to be SOME price to pay for this thuggery, and the West should make them pay it.”

Are we talking about Libya? I don’t think the G8 will expel the US over Libya.

#11 Comment By crf On March 18, 2014 @ 7:54 pm

Nuclear powers with world destroying capacities must by respected and allowed to grow economically and socially, especially within their ambit. They can never be allowed to become failed states. This last point is succinct enough that it should be placed in the UN charter, so people like Kerry and Obama, who seem to think that the world is governed by “international law” will respect this reality.

The attempt by Europe, possibly with the connivance of the United States, to lure Ukraine out of Putin’s future [4] was likely seen by Putin to be akin to an act of war. This new fact may have caused Putin to re-evaluate the US’s policy of NATO expansionism as something other than a defensive arrangement, but in fact, a base from which NATO might try to win a nuclear war after sufficiently weakening Russia economically. (You may say “never attribute to malice what can be explained by stupidity”: but, if you’re Russia, you can’t assume that the US is just being stupid and doesn’t know what it’s doing.)

In other words Putin may now feel as Kennedy felt when Khruschev put missiles in Cuba. The US rightly saw those missiles as an attempt to completely constrain the policies of the United States by giving the Soviet Union the ability to launch a first strike and win a nuclear war. Luckily, war was avoided because there was a simple solution: remove the missiles and make signals that Khruschev had lost his marbles and was being just a bit silly.

Crimea may therefore be a very sobering message to the U.S. and the West. The trust so expertly developed between the US and Russia during the Presidencies of Reagan, Bush and Clinton has been shattered, perhaps irrepairably. That’s sad for humanity: but we have to look at deadly dangers objectively and soberly. The message of Crimea may be that Putin wants mother Russia united when the bombs fall.

Russia may be punished by the west for a time for appearances sake. But I hope that there are darkly cynical people like myself in the United States government who, shocked, are not dismissing these coded messages of Putin’s, and are pressing Obama directly that the most urgent task of his administration is the development of a strategy to repair the United States’ and Russia’s relationship, and set it on a very firm stable footing for the future. (We can always hope for a miracle that such insightful people are lurking somewhere in government.)

#12 Comment By crf On March 19, 2014 @ 4:33 pm

Well, Putin’s speech laid out in plain words what I deduced from what I called his coded messages.

Even John Kerry ought to realize the world is very close to nuclear war. Perhaps closer than during the Cuban Missile crisis. The US and Russia need to talk, pronto.

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