In Which The United States And India Tend To Prove An Undergrad Thesis About Economic Sanctions
When I was in college, I wrote a final paper for a class in Foreign Policy in which I addressed the efficacy of economic sanctions. I can no longer find an original copy of it, much to my chagrine.* But therein, I used the examples of U.S. economic sanctions on both Libya and Iraq to demonstrate a proposition:
In order for economic sanctions to provoke regime change, two things must be generally true:
1. Sanctions must be total and unqualified, with full cooperation from the international community.
2. The international community must be willing to accept the loss of innocent life as a price of regime change, where that change comes as a result of intentional economic deprivation.
I’ll briefly sum up what my position was on the Libya and Iraq sanctions in turn (these are woefully incomplete accountings, but serve to at least apprise the reader of the general circumstances of both countries):
Libya’s history with sanctions is somewhat complicated. But in general, the only consistently enforced sanctions were applied to their arms industry. Thatcher rejected America’s call to restrict trade with Libya, and some european governments were skeptical of commercial trade restrictions. The U.S. stopped buying oil in 1982, and in 1986, after the Berlin bombing, the U.S. sanctions were expanded to commercial contracts. In 1996, the Iran-Libya sanctions act was passed, which once again, despite buy-in from the U.N., was not universally accorded in fact. In the time between 1986-1996, Libya’s GDP was hurt by import reductions, but not nearly enough to cause any sort of impact on the regime. Indeed, it was almost black humor when Libya was able to painlessly pay $2.7 billion in 2002 to compensate the victims of Pan Am 103, in return for having sanctions lifted (which had already been suspended in 1999), and having their name moved off the state-sponsored terrorism list; a move prompted more by 9/11 and a fear of war with America than by the sanctions themselves. In other words: it was the fear of military conflict, and not economic sanctions, that provoked a policy response from Libya.
The story with Iraq was much the same. For the sake of brevity, I’ll spare you the histrionics and get right to it: Iraqi economic sanctions caused no end of human suffering while doing absolutely nothing to undermine the Baath regime. This quote from a 2000 report for the High Commissioner on Human Rights (at the link above) is telling:
unintentionally, economic sanctions can lead to reinforcement of the power of oppressive élites, the emergence, almost invariably, of a black market and the generation of huge windfall profits for the privileged élites which manage it, enhancement of the control of the governing élites over the population at large, and restriction of opportunities to seek asylum or to manifest political opposition;
But this isn’t inevitable; the black market can be prevented from arising if you have universal buy-in from the international community. But we didn’t. And the suffering of the Iraqi people eventually led to the oil-for-food program (OFF), which essentially defeated the purpose of the sanctions in the first place. So what we ended up with were sanctions that punished the people of Iraq by preventing access to a wide range of non-food consumer goods, while subsidizing the regime by allowing them to exchange oil for food, and thus keep Iraqis from starving to death. Of course, many of those transfers never made it to the Iraqi people. So what we were left with in the end was a country placed under half-assed sanctions, and a half-assed humanitarian attempt that tried to uphold the pretense of economic isolation, but which nonetheless defeated the very goal of economic isolation itself (one which nobody likes to ever admit): to make the people of a rogue state suffer, so as to encourage political instability and unrest under the offending regime. By the time we instituted the oil-for-food program, we were passively killing Iraqi people, but giving the regime just enough to prevent political instability. Western nations literally couldn’t have done a better job of screwing the Iraqi people while preventing their suffering from achieving any long-term political benefit; which is sad, because regime change was theoretically conceivable before the oil-for-food program was put in place. But we pretty much ensured that any economic suffering by the Iraqi people was in vain by subsidizing the regime, however noble the intentions of the OFF may have been.
In short: Libyan sanctions were not universally endorsed by the international community, and as a result, the economic suffering imposed on the Libyan people achieved no great purpose. In Iraq, the same thing happened: while Iraqi sanctions were more consistently endorsed by the international community than they were in Libya, it nonetheless was punctured marginally by black market actors, and later, officially by the OFF. The OFF in particular demonstrated that the international community was unwilling to allow Iraqi people to continue suffer and dying under economic sanctions. But in doing so, they foreclosed any possibility of smoking the Baath regime out of power by creating political unrest through economic suffering.
The point of all this is that, when it comes to sanctions, you need both feet, or none at all. Sanctions will never result in regime change if you can’t completely isolate the target country from the international stream of commerce. And giving them humanitarian aid defeats the very mechanism by which sanctions work: depriving the people of a nation of essential goods and services, and thereby stoking political unrest that leads to regime change.
U.S. and India
I thought of all the above when I read about the Indian response to U.S.-led sanctions against the Iranian regime:
An Indian trade delegation will travel to Iran next week to explore “huge opportunities” created by US-led sanctions over the Islamic republic’s disputed nuclear programme, an export group says.
The group will visit Iran from March 10-14, the Federation of Indian Export Organisations said late Friday, adding exporters had settled a major problem on how to receive payments from Tehran in the face of sanctions on dollar deals.
"We are expecting to get a lot of business from this trip," Anand Seth, spokesman for the Federation of Indian Export Organisations, an Indian government partner in promoting trade, told AFP.
So with Obama having allegedly done more to isolate the Iranian regime than his predecessors, it appears that to some extent, all he’s actually done is transfer business opportunities in Iran from the American economy to the Indian economy. In this sense, we haven’t isolated anything. All we’ve done is hand economic opportunities from American businesses to a different country. Proving once again that economic sanctions without multilateral cooperation from the international community only tends to cause needless suffering; or in the case of the latest round of Iranian sanctions, handing economic growth and business opportunities to a different country, while undermining any negative impact on the targeted country.
*Else I would share it with you all, so you can see what a god-awful writer I used to be (e.g. who needs to format block quotes?).