Friday, February 3

Historical Lessons on Economic Sanctions


History teaches that Economic sanctions have never stopped a power from invading another country and that when those sanctions exceed a certain level the war can be extended. History indicates that they do not serve to change a political regime, but instead lead to reinforcing its power over the population. Sanctions punish and impoverish the population, while the political and economic elites of the sanctioned country can evade and cushion their impact. Sanctions also penalize and impoverish the population of the sanctioning countries, as is now the case in the European Union (EU), increasing inequality and the risk of destabilization. In a war, sanctions take time to make their effect felt. Therefore, military and economic aid to the attacked country is the most effective way to stop a invasionas exemplified Ukraine.

Economic sanctions did not prevent Italy from invading and conquering Ethiopia (1935-1936), as detailed by historian Nicholas Mulder in his book ‘The Economic Weapon’. The Economist John Maynard Keynes he then argued that Ethiopia would have been able to defend itself effectively if it had received help. If China had received Western financial and military aid, it would also have been able to stop the Japanese invasion that began in 1931 in Manchuria and continued in 1937 in the rest of the country. That would have bogged down the Japanese military and curtailed its ability to expand in the Pacific.

When Japan occupied Vichy French Indochina in 1940, United States began sending belated aid to China and imposing economic sanctions on Japan, in coordination with the British and Dutch governments in exile. The escalation of those sanctions in 1941 to a full oil embargo, fuels and essential imports did not stop the war, but rather pushed Tokyo to attack the US and the British and Dutch colonies in December 1941 and seize the abundant Dutch oil resources, because those extreme sanctions sank Japan. The EU and the US should keep this in mind so as not to escalate their sanctions against Russia to a point of no return, since a nuclear power in a dead end can be dangerously unpredictable.

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Regime-hardening sanctions

The North American academic Robert A. Pape published in 1997 a documented study that showed that economic sanctions are barely effective in preventing wars or achieving foreign policy objectives. More than 60 years of US sanctions on Cuba have only impoverished the population, making regime change even more difficult. The harsh sanctions against North Korea, Iran and Venezuela have only served to penalize the population and harden their political regimes, as happened with Saddam Hussein’s Iraq.

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To stop the Russian invasion of Ukraine, the most effective measure is massive military, economic, financial and humanitarian aid to the kyiv government. The harsh Western sanctions against Russia can give results in the medium term, but their effectiveness is limited because most of the world’s countries, led by China and India, have refused to apply them. That offers to Moscow margin to cushion its impact, since countries opposed to sanctions account for 44% of the world economy and 85% of the global population. Even Turkey, a leading member of the NATOrefuses to support the sanctions.

The EU and the US immediately applied the sanctions that directly penalize the Russian population, outside the decisions of the Kremlin, while the sanctioned oligarchs are very few and the measures are approved with a long delay, which gives them time to protect their assets and continue to hide behind shell companies in Luxembourg, Cyprus, Malta and other tax havens. The oligarch Alexei Mordashov was able sell your share of 1,300 million in the Tuia group, a shell company of the British Virgin Islands. the oligarch Roman Abramovich it was not included in the EU sanctions list until March 15, 20 days after the start of the Russian invasion. The EU countries and the UK have not even canceled the golden visas in force granted during the last decades to the oligarchs. For sanctions to have a political impact should apply immediately to all 20,000 Russian billionaires with financial and real estate assets of more than 10 million euros, says the economist Thomas Pickett.

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