Sanctions are a long game

This week the European Union and United States imposed new sanctions on Russia in response to its continuing support to rebels in eastern Ukraine, including provision of a missile system that allegedly brought down Malaysia Air flight 17 last month. Most commentary asks whether the sanctions will force Russian President Putin to change course. Few anticipate that they will. Some think the sanctions will make him double down. There is evidence of Russian shelling across the border into Ukraine as well as flows of Russian armaments and personnel to the rebels.

Sanctions rarely have an immediate effect. Yes, they may raise the costs of a policy, but Putin wouldn’t be pursuing the course he is on in Ukraine if he didn’t think it vital to his own, or Russia’s, interests. The sanctions may lessen his support, in particular from the oligarchs who control major sectors of Russia’s economy, but Putin is riding so high and is so fully in control that a dip in his popularity is unlikely to have much impact on his thinking. His goal is to re-establish Russia as a world contender, which means he has to worry (a lot) about what any loss would mean for future engagement vis-a-vis the US.

I know of little evidence that the impact of sanctions is maximal when they are imposed. It accumulates with the passage of time. Even if the effectiveness of sanctions declines, the economic impact is cumulative. So the Russians may shrug off energy and banking sanctions today, but in two or three years may be anxious to get rid of them.

There is ample anecdata to support the notion that negotiating an end to sanctions is what brings substantial results. That is what we are seeing right now with Iran: the draconian sanctions had little impact when they were imposed, but they weakened the country’s hardliners and several years later sanctions relief is something Tehran is prepared to pay for (though we don’t yet know how much).

That attitude came about partly as the result of a change of government. Few think President Ahmedinejad, were he still in power, would be negotiating limits on Iran’s nuclear program. Iranians elected President Rouhani in hopes of improving the country’s economic condition, which requires sanctions relief. He can’t deliver on the economy, which was his main campaign promise, without a nuclear deal that brings sanctions relief.

It is unlikely Putin will change his mind on Ukraine, even if some of his supporters would like him to do so. Today’s chat with President Obama, in which he Putin is said to have acknowledged the risks of escalation, signifies little. He will up the ante as far as he thinks he needs to go to ensure victory, all the while denying involvement. Sanctions are a long game. Their significance will likely await Putin’s successor, or perhaps even his successor plus one. In the meanwhile, Ukraine will have to try to win on the battlefield.

 

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2 thoughts on “Sanctions are a long game”

  1. The Ukrainian army has been winning – GordonUA reported yesterday that 60 towns and villages had been liberated so far. The pro-Russian supporters apparently believed the Russian propaganda they’ve been hearing and have been fleeing ahead of the newly confident (and now, regularly paid) army force. (One example of what they’ve been hearing: that the Ukrainian government plans to castrate all their boys. In Luhansk, where Russian TV had made a lot of a story about a three-year-old boy supposedly being crucified in front of his mother, the locals are saying they never heard of any such thing happening.) Excavation of the rebels’ mass graves – including of insufficiently committed fellow-rebels – have started and the stories of their thuggish behavior are beginning to circulate more openly, at the same time as the Ukrainian authorities have started providing electricity and water and payment of pensions. Now, if they can refrain from doing anything obviously cement-headed (such as toying with the status of the Russian language in the region) they have a decent chance of winning over the region’s population. In which case, I’m not quite as sure as I once was that Putin will not invade openly – by this time, he has his over-excited nationalists to worry about, not just those nervous oligarchs.

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