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.