WHEN THE LEVIES BREAK — Ukrainian President Volodymyr Zelenskyy is coming to town — on Zoom, at least. He is expected to appeal to Congress Wednesday for more weapons and military assistance to counter Russia. He’ll also likely ask the United States to hit Russia with even tougher economic sanctions. Western nations have moved with uncharacteristic speed and coordination to punish Moscow for its invasion of Ukraine and to push Russia toward pariah state status. The implosion of Russia’s economy — a major exporter of oil, gas, grains and metals — has roiled global energy and commodity markets. Nightly talked with Cornell historian Nicholas Mulder about how the sanctions placed on Russia compare to previous sanctions regimes. Mulder’s first book, “The Economic Weapon,” was published in January and explores the rise of sanctions as a tool of warfare in the early 20th century. History provides few examples, Mulder says, of when sanctions have averted or ended conflict — examples that have few parallels with Russia’s ruthless war. Using sanctions to punish Moscow for its actions may be the right thing to do right now, but during a time of great uncertainty about the future of globalization, he warned they could also hasten a redrawing of the world’s monetary and financial lines. This conversation has been edited. What does the West hope to achieve by imposing sanctions on Russia? The overall goal is not entirely clear to me. Biden in his State of the Union was very clear that the goal was to punish Russia. Liz Truss, the U.K. foreign secretary, has also said it’s about imposing costs and degrading the capacity of Russia to do further harm. That’s a coherent goal but different from that of European leaders. In their initial sanctions announcement, they set conditions to end the aggression by pressing Russia to withdraw from Ukraine and respect Ukraine’s territorial integrity. It’s understandable they want to keep some ambiguity to give them negotiating room. On the other hand, the risk of this is that the Russians are going to interpret sanctions as aimed at regime change, which is a very sure path to escalation. If the goals are not made clear this is likely to become a sort of existential issue. What we do know about sanctions is if they don’t lead to an effect quickly, then they are not likely to work and they will remain in effect for a really long time. Then they become super hard to lift as you get a political consensus around them in the sanctioning country. How does that compare to how sanctions have been used over the past 100 years? The dominant goals have shifted over time, but the most useful way of thinking about it is to distinguish between goals that try to achieve something between states and goals that try to change something within countries. The economic weapon in the early 20th century that I document started off as a mechanism to prevent the repetition of the First World War. That’s why we’re using sanctions against Russia — to stop this aggressive invasion of Ukraine. There was also the goal of trying to change the political character of governments. Countries using sanctions were the big liberal powers in the 20th century, so Britain and France at first — and later on from the 1940s and onwards, the United States — used blockades and peacetime sanctions to try and overthrow the Soviet government in Russia. When have sanctions worked — when have they served their intended purpose? You can place them in a few categories. One would be sanctions successes when there is a very large coalition of countries that can exert pressure on a state and at the same time provide a political or diplomatic way that the state can respond to the goal. The sanctions against Iran in 2010 that Obama led were basically a way to negotiate the Iran deal and were a pretty good example of how sanctions can be part of a successful diplomatic strategy. The other way sanctions work well is when there is a really big power imbalance between the countries and when there is a very sudden threat that can be severe. In the 1920s, the League of Nations used a sanctions threat to prevent two border wars in the Balkans. In 1956, the United States threatened to withdraw support of British currency and block IMF loans to convince Britain to stop a war against Egypt. However, the bigger the ideological differences between countries, the less likely sanctions are likely to work. You mentioned that sanctions against an economy as large as Russia’s could change the nature of globalization. What do you mean by that? Countries against which we have seen sanctions have tended not to be as economically active in so many different markets as Russia. Iran and Venezuela are important oil producers, but they control only a segment of the oil market. What we have with Russia is almost a perfect cross-section of the global commodities market. You cannot impose meaningful sanctions on Russia without it having very serious spillover effects. The other thing is we have frozen Russia’s central bank reserves, so this is certainly going to give pause to countries outside of the West and make them think about the status of their own currency reserves. I don’t think the concerns that there is going to be an alternative to the dollar emerging are justified. I think that’s pretty safe and secure. But countries will think twice about holding very large dollar reserves. There’s going to be much more regionalization of currencies. Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com. Or contact tonight’s author at abehsudi@politico.com, or on Twitter at @ABehsudi.
| 
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.