In this article, I will come back on some persistent failures of economic sanctions and argue in the vein of Paul Watzlawick that Europe should “officially believe” that Vladimir Putin is well intentioned to stabilize Ukraine and help its Russian ally by sending joined troupes to protect civilians in Ukraine to put an end to the civil war casualties.
The U.S. President Obama officially declared on the 17th December 2014 about Cuba that “After all, these fifty years have shown that isolation has not worked. It’s time for a new approach.”
Such an obvious remark could seem to come rather late from a man that was awarded the 2009 Nobel Peace Prize for “extraordinary efforts to strengthen international diplomacy and cooperation between peoples”. Indeed, it was already clear during Bill Clinton’s years that the embargo on Cuba was “un fracaso”.
Back in 1996 Clinton, nonetheless signed the Helms-Burton bill into law and felt “backed into a policy of proven failure,” he lamented to a confidante in the Oval Office, “closing off political engagement toward a peaceful transition in Cuba” for the sake of electoral expediency. “Supporting the bill was good election-year politics in Florida,” Clinton conceded in his autobiography in 2004, “but it undermined whatever chance I might have had if I won a second term to lift the embargo in return for positive changes within Cuba.” So it has been at least 18 years that the idea was floating around in the White House that its embargo on Cuba was wrong. And it has taken 6 years for a president elected on Hope to officially admit the embargo’s failure.
I am far from blaming Barack Obama, 6 years isn’t that long to be fair. I researched scholar publications on economic sanctions and I found what I called the ‘political trap’ of an embargo: it is difficult, as a politician of a country who was active in starting a war or an embargo, to acknowledge that it was counterproductive without losing face. This ‘political trap’ is illustrated in a very interesting analysis by Alan Dobson “The Changing Goals of the U.S. Cold War Strategic Embargo” which explains how the costly and inefficient 1979 United States grain embargo to the USSR remained especially because of President Einsenhower worry “that even a minor change would have a ‘remarkable’ symbolic impact”, hence stressing the “conveyance of messages”. As Rostow, Special Assistant for National Security Affairs, saw it: “Any shift in U.S. policy under static Cold War conditions would ‘impair US ability to hold up its end int he Cold War’ and would be difficult to justify to the Congress and American people”.
So once economic sanctions are put in place, it can be hard to find the rhetoric to justify lifting those sanctions without a symbolic “breakthrough”, like the release of US citizen and USAID sub-contractor, Alan Gross, after five years of imprisonment in Cuba along “one of the most important intelligence agents that the United States has ever had in Cuba”. This brings me to believe that in the future Europe should refrain from putting economic sanctions in the first place and quickly get out of the ‘sanction trap’ with Russia. Indeed, I am struggling to imagine upcoming “breakthroughs” from the quagmire in Ukraine for Europe Heads of State to justify lifting sanctions on Russia.
A way out of the European economic sanctions on Russia could be even harder to reach as Europe Heads of State handed the power to end the sanction to the government in Kiev: “the Heads of State or Government of the Union’s Member States […] called on the Russian Federation to immediately withdraw its armed forces to the areas of their permanent stationing […] They called on the Russian Federation to enable immediate access for international monitors. The Heads of State or Government considered that the decision by the Supreme Council of the Autonomous Republic of Crimea to hold a referendum on the future status of the territory is contrary to the Ukrainian Constitution and therefore illegal. […] The Heads of State or Government underlined that the solution to the crisis should be found through negotiations between the Governments of Ukraine and of the Russian Federation” COUNCIL REGULATION (EU) 269/2014 on 17 March 2014
I think that the American embargo on Cuba was so unfair to the struggling Cuban people and unproductive that I used to joke that Europe should invite Cuba to join the Schengen area. To paraphrase France current Finance Minister Emmanuel Macron derailing François Hollande’s now retrieved 75% tax regime on high income, Macron compare Hollande tax intention to “Cuba but without the sun”. Had Europe been so unorthodox as inviting Cuba to join its Schengen area, the Cuban government would have been able to lift most of its necessary “período especial” measures. I even argued that, because Cuba enjoys such a high level of education, digitalizing Cuba could relieve the corruption burden. So Obama move yesterday is actually great news: “Businesses will be able to sell goods that enable Cubans to communicate with the United States and other countries.”
Europe could jump on this opportunity to question its Foreign Affairs and Security policy on the efficiency of economic sanctions. In the case of Iraq, in 2010 Nimah Mazaheri published a research article in The Middle East Journal that “shows how the imposition of sanctions strengthened rather than weakened Hussein’s government” as the sanctions necessitated a “rationing system, […] the only system that ‘saved the bulk of the population from starving.’ “Throughout the early 1990s, the professional middle classes (the foremost potential source of opposition to Hussein’s dictatorial regime) were decimated […] The sanction invented an entirely new class comprised of smugglers and distributors who played a role that was essential to the population’s survival,” an idea further developed by Susan Hannah Allen, associate professor of political science at the University of Mississippi.
The embargo on Iraq changed the structure of the civil society and re-allocated Iraqi middle classes effort toward petty smuggling activities. This is exactly the structure Deash is today striving on and making an estimated $1m to 5$m a day. So I believe that the economic sanctions started in 1990 on Iraq actually dissolved the middle classes that could have been a structure on which to build a stable democratic sovereign state. This is exactly what lead Tracy McNicoll, Newsweek correspondent based in Paris, to write in her PhD dissertation Capitalizing Courage on embargoes’ negative externalities: “There is reason to believe that the cost-benefit calculus applied to sanctions has been incomplete; sanctions are often judged on the day they are lifted, in the country upon which they are imposed, whereas their policy-relevant effects may persist well beyond their lifting and even beyond the boundaries of their target. […] International peace and security are increasingly intuitively linked to sustainable human development, advanced as it is by carefully considered peacebuilding and reconstruction post-conflict. […] Those effects of sanctions may directly impact on the prospect of building peace and reconstructing states post-conflict and post-sanctions.”
In the Financial Times September 21th 2014 edition, Borzou Daragahi and Erika Solomon reported on the situation in Iraq, that “Oil smuggling has deep root in the region. After the imposition of UN energy sanctions on Iraq in the 1990s, a robust network of smugglers, traders and bootleg refineries flourished. Hundreds of entrepreneurs emerged, buying and selling small parcels of Iraq’s oil at a discounted prices and transporting them across the Turkish border to sell at a markdown.” Valerie Marcel of Chatham House adds “Turkish, Iranian, Syrian, Iraqi networks have grown because of decades of bans on exports.”
Bilal Wahab, an energy expert at the Amercian University of Sulaymaniyah even points at the irony of the situation where Kurds are potentially helping put money in Daesh coffers that its own peshmerga forces are fighting. The Kurdistan Regional Government cannot stop this flow as otherwise “it can’t pay salaries, and it can’t pay salaries because the central [Iraqi] government hasn’t given the KRG its budget in eight months. Yes, it is illegal. Yes it’s bad. But it is what greases the wheels of the [local] economy.”
Getting back to my initial point on the European economic sanctions on Russia, I hope Federica Mogherini will jump on this “let’s lift couterproductive economic sanctions” mood in order to get Europe out of the current ‘political trap’ on Russia.
The Austrian-born philosopher Paul Watzlawick wrote about self-fulfilling prophecies in social interactions, as assumptions or predictions that, purely as a result of having been made, cause the expected or predicted event to occur and thus confirms its own ‘accuracy.’ In an illustrating story, he tales how if before making contact with somebody, you foment in your head (or in an oval office) that this person is ill intentioned against you, your behaviour will send such signals that will end up making this person an actual and long lasting enemy. If you believe that George W. Bush went to Iraq because of its oil reserves or if you believe that he was a supporter of torture, you might turn him into an enemy and he might refuse any dialogue (the latter actually happened in Switzerland, 2014).
I would rather have European leaders “officially believe” that Valdimir Putin intentions are to stabilize the situation in Ukraine and send troupes along to “help” stabilize Ukraine. This would actually have protected civilians and might have been less costly in the long run for Europe. The sanctions are hurting middle classes all across Europe (Russia included) setting us on diverging paths. The US were the driving force in binding past foes France and Germany in a European Union, I wish US vice President Joe Biden would rather bind Western Europe and Eastern Europe Russia together, instead he stated in Octover 2014: “Throughout we’ve given Putin a simple choice: Respect Ukraine’s sovereignty or face increasing consequences. That has allowed us to rally the world’s major developed countries to impose real cost on Russia.
It is true they did not want to do that. But again, it was America’s leadership and the President of the United States insisting, oft times almost having to embarrass Europe to stand up and take economic hits to impose costs. And the results have been massive capital flight from Russia, a virtual freeze on foreign direct investment, a ruble at an all-time low against the dollar, and the Russian economy teetering on the brink of recession.”
I am writing this as the Financial Times are reporting on how “EU demurs over Kiev’s pleas for cash assistance”. This is an odd message to send to civilians aspiring to become part of the EU who could find it hard to understand the EU military reluctance to protect them from a conflict that has already killed 4,700 people.
The US are committed to send 150 M1 Abrams tanks in the Baltic states and Poland, as part of Operation Atlantic Resolve where “the United States is demonstrating its continued commitment […] to enduring peace and stability in the region, in light of the Russian intervention in Ukraine”. This brings back to mind the 1999 bombing during the Kosovo war were US President Bill Clinton was the prominent actor to create the urgently needed momentum to fight against the ethnic cleansing.
The French President François Hollande didn’t hesitate long before sending troupes in the Central African Republic civil war between the Séléka and government forces to protect civilians. Is France inaction to help Ukrane civilians explained by the French Chief of the Air Staff report, Denis Mercier, that the French Air Force is already committed to its full capacity, somewhere else in the world? Did France based his decision on a “cost-benefit calculus” to rather hurt Russian middle classes rather than to protect Ukraine civilians, as anyway the French army was already deployed to its full capacity.
As the rouble is falling, a rational reaction from the Russian Central Bank would be to resort to capital control (for more information you could read the 2002 economic paper from Calvo and Reinhart on the “Fear of Floating“). And this will conclude my point on the long term human cost on Europe from the economic sanctions imposed on Russia as this will force the Kremlin to “rationally” introduce more control in the face of this “período especial”, and this sounds like the nineties.
I wish that Federica Mogherini would quote Barack Obama and apply it to counterproductive embargoes and economic sanctions (be it on Iraq, Russia, or Cuba) that “I do not believe we can keep doing the same thing for over five decades and expect a different result” and conclude something like “мы все европейцы”.
Dobson, Alan P. “From Instrumental to Expressive.” Journal of Cold War Studies, Winter 2010.
Mazaheri, Nimah. “Iraq and the Domestic Political Effects of Economic Sanctions” Middle East Journal, Spring 2010
McNicoll, Tracy. Capitalizing Courage: Sanctions Assessment and the Outcome of the Outcome. McGill University, June 2004
Calvo, G.A., Reinhart, C. Fear of Floating. Quarterly Journal of Economics,May 2002