The Effectiveness of Economic Sanctions

Introduction 

The most recent political and economic practice is setting up sanctions as a means of effective punishment on the recipient country. The debate on the effectiveness of economic sanctions requires a critical understanding of the meaning of the phrase and the history of the practice in the global political sphere. The term may be defined as the commercial and financial penalties that are applied by one or a group of countries towards a single country, region, or individual citizens from the target group (Masters, 2017). The practice usually includes various forms of trade barriers, increased tariffs, or limitations in financial transactions. The terminology may be used as an alternative to embargo though the latter entails more severe actions usually partial or complete prohibition on trade and commerce with a select country or a group of them. In this regard, economic sanctions and embargos are used by many current governments as a tool in foreign policy (Rogoff, 2015). In majority of the cases, it is a practice imposed by larger countries on smaller ones, either because the latter poses a security threat on the former or the political nature of that country to treat its citizens unfairly. 

Throughout the history of civilization, sanctions have been an integral factor in the international relations between countries. It dates back to nearly 2,400 years ago in 432 BC when Pericles, and influential Greek statesman and general of Athens issued a trade embargo against their neighboring town of Megara (Masters, 2017). The reason for the decree was an act of revenge as the Megarians had supposedly trespassed into the Athenian’s sacred land and for giving shelter to slaves who had escaped from Athens. Similar practices of destabilizing foreign governments have been a common practice in the modern society (Rogoff, 2015). The Carter administration enforced sanctions in the 1970s to promote human rights, while similar efforts were made to impede the rapid increase in nuclear weapons (Masters, 2017). In likeness to the Megarian decree, economic sanctions are employed by governments to dismantle governments that are deemed unfriendly and for regime changes that are seen as inappropriate (Whang, 2011). The following report looks into case studies of economic sanctions of different types and the way they affected the target countries in a bid to assess the effectiveness of the foreign policy practice. 

US Economic Sanctions on Japan 1940 

One of the most common economic sanctions in the modern society is the direct ban or partial freezing of assets on a country identified to be a major threat to a larger power. This has been the primary practice in the enforcement of trade bans and tariffs on countries. In the 20 th Century, numerous presidents enforced direct bans on the individual countries as a significant means of destabilizing their power or to curtail their continued growth (Higgs, 2006). Frank D. Roosevelt’s administration enforced an economic warfare against the Imperial Japan in the early 1940s. It was a foreign policy strategy that would steer the US into becoming a major participant in the Second World War. The events leading up to the economic sanctions are integral to understanding the impact on the target country. 

During the latter years of the 19 th Century, Japan’s economy grew rapidly into an industrialized nation. However, the country did not have extensive natural resources as the Western nations including the US, Britain, and the Netherlands. This occurrence led to heavy dependence on imported raw materials from the US and European colonies in Southeast Asia including coal, iron, petroleum, bauxite, and copper. Through significant engagement in international trade, Japan had been able to establish an industrialized economy that was moderately advanced. The Emperor of Japan, Hirohito, harbored beliefs of a unification of Asia under his rule. However, the continued growth in strength of the Asian country and the petering out of the New Deal in the US did not sit well with the Roosevelt administration (Ferguson, 2006). Numerous historical writers identify the then US President as one who disliked the Japanese and an integral factor to the enforcement of economic sanctions on the country. 

Towards the late 1930s, the Roosevelt administration cooperated closely with the British and French military in measures to impede the German aggressive Lebensraum. The Lend-Lease program was a deceptive measure to lure both Germany and Japan who were allied into making a mistake that would make the countries appear belligerent and lead to the full-fledged declaration of war. The US began with a termination of the 1911 commercial treaty with Japan in 1939, followed by the enactment of the Export Control Act that prohibited the exportation of essential defense materials including aviation motor fuels, lubricants, and heavy melting iron and steel scrap. The embargo aimed at Japan restricted exportation of the above materials to other nations other than Britain and those in the Western Hemisphere. In July 1941, the Roosevelt administration froze Japanese assets in the US bringing all commercial relations between the countries to an end. As a result, the Japanese military leaders would engage in war in an effort to escape the stranglehold orchestrated by the US causing the surprise attack at the Pearl Harbor. 

OAPEC Oil Embargo 1970s 

Another form of economic sanction is evident where a group of countries form a commerce and trade ban on a select country seeking to influence its behavior. This practice is evident in the oil embargo imposed by numerous oil producing countries in the Middle East as well as a few in North Africa targeting the US (Roberts, 2012). In the beginning of the 1970s, the consumption of oil and other related products in the US was experiencing a steady increase despite the significant decline in domestic oil production (Van de Graaf, 2013). The occurrence would lead to heavy dependence on imported oil from these countries where reserves were in plenty. Policymakers in Washington assured Americans that there should be no worry of a dwindling supply of oil. According to the political leaders, the Arab countries could not afford to lose the revenue earned from the US giving the latter the bargaining power. 

The assumptions made by policymakers were quickly demolished by the oil embargo enforced by the Organization of Arab Petroleum Exporting Countries (OAPEC). Some of the member countries included Kuwait, Saudi Arabia, Libya, Syria, Tunisia, Egypt, Algeria, Bahrain among others (Türk, 2014). The economic sanction led to a significant shortage of fuel and extremely high prices of during the majority of the decade. The embargo was a direct result of the creation of the state of Israel. The Second World War came from the aggressive Lebensraum of the German troops led by Hitler (Van de Graaf, 2013). The dictator ordered the mass killings of Jews in the state and neighboring nations seeking to extensively expand the territories of Germs. As a result, the allied powered carved out land to create the state of Israel in 1948. Much of the land is the territory of Palestine and would serve as the homeland for the disenfranchised Jews (Rüdiger, 2014). The majority of the Arab countries refused to acknowledge the created state and took up sporadic attacks against the country members. The Yom Kippur War in October 1973 would serve as the full-scale conflict as Egypt and Syria attacked Israel (Van de Graaf, 2013). The US and the Netherlands would suffer from this embargo as they were the main supporters of Israel by resupplying them with arms and offering military support. 

EU Arms Embargo on People’s Republic of China 

Following the end of the Chinese War, the Communist Party of China defeated the Republic of China (ROC) in an effort to gain rule and control over the Chinese mainland leading to the establishment of the People’s Republic of China (PRC). Though there remains a lack of clarity on the ruling government with both parties claiming legitimacy, it is PRC that has more extensive recognition in the global community and territorial control. The party enforced economic reforms in 1978 which resulted in China boasting the fastest growing economy (Nuttall, 2010). In this regard, the majority of the European Union members would engage in significant trade practices making it the second largest trade partner behind the US. The primary aims of the EU and China relations are to ensure cooperation in a number of aspects including peace and prosperity among others. 

The governance of the country has come under significant question particularly after the Tiananmen Square protests in 1989. The Chinese People’s Liberation Army (PLA) engaged in a series of efforts to suppress the peaceful student demonstrations by using force, implementation of martial law, and upholding of the communist party. In this practice, the scale of mobilizing the military for domestic issues and the adverse incidence of bloodshed of civilians was unprecedented. There were between 50,000 and 100,000 demonstrators facing 180,000 to 250,000 troops (Nuttall, 2010). Estimates identify thousands of casualties and many more civilians wounded. The EU identified the occurrence as a clear disregard of human rights hence the importance of enforcing economic sanctions against the country. The arms embargo would be utilized to effectively reduce the country’s acquisition of various arms. 

There exists a significant division among EU members as to what entails the arms embargo. The members are reluctant to enforce a complete ban on weapons trade with the country. Owing to the fact that China has the largest economy in terms of Purchasing Power Parity, the European countries would be losing out on a major market if a complete ban is enforced. China has made several attempts to the EU to lift the embargo on arms, but countries like Japan are against the removal of the restrictions (Harding, 2016). The latter identifies that such an action would strongly favor China in Southeast Asia at their expense. 

Economic Sanctions by the UN 

The final decade of the 20 th Century is considered as the ‘sanctions decade’ due to the high number of economic sanctions imposed by the UN. More than a dozen countries across the world were recipients of embargos as a means of punishing unethical regimes. Some of the countries included Iraq in 1990, Yugolsavia in 1991, 1992, and 1998, Afghanistan in 1999, Somalia, Rwanda, Angola, and Sierra Leone in the early 1990s, just to mention a few. The primary measure implemented by the UN was arms embargos, where majority have maintained a poor track record and demonstrated little effectiveness (Masters, 2017). The goals of the economic sanctions were of a diverse nature like restoration of democracy, disarmament without military force, and advocating for human rights. However, the events taking place in the various countries depict incidences contrary to the intended goals of the UN. For instance, a significant delay in the employment of economic sanctions against Rwanda led to a genocide that resulted in the deaths of nearly a million civilians including children (Krain, 2017). In this regard, the enforcement of the embargos is shown to be a complete failure. 

The UN charter insists that its primary motive when intervening against unfriendly regimes is to ensure delivery of good governance and establish good quality of life for the citizens in the target states. The tough sanctions imposed on the Iraqi regime under the leadership of Saddam Hussein have received much criticism from legislators and political leaders across the world. While the UN identified the importance of ensuring the strict prevention of trade practices and ensuring little suffering for the Iraqi citizens, its implementation did not achieve the projected objective (Masters, 2017). The global organization encountered significant humanitarian problems during the early 1990s. While the UN was successful in compelling Iraq to withdraw from Kuwait in 1991, restoration of a democracy in the state proved difficult as was the objective of eliminating weapons of mass destruction. The stringent sanctions significantly deteriorated the standard of living for Iraqi citizens and caused a major health crisis that led to the deaths of over 200,000 children below the age of five (Masters, 2017). The imposed UN sanctions in Haiti have also caused considerable harm to the community by increasing child mortality rate. In North Korea, the organization is yet to contain the volatile nature of the dictator Kim Jong-Un who has successfully developed weapons of mass destruction with the latest tests showing they could reach as far as the US (Hudson, & Francis, 2016). 

Japan Reaction to US Economic Sanction 1940 

As mentioned earlier, the economic warfare against Imperial Japan was a calculated strategy of Roosevelt’s administration to ensure its participation in the Second World War. The then US president is believed to harbor a disregard for the Japanese and provoked its government to go to war after the Perl Harbor attack on the US naval fleet. Decades after the surprise ambush by the Japanese army, US citizens still believe that it was the former who agitated their peace first leading to US participation in the Second World War (Higgs, 2006). However, despite the sanctions placed against them, the Japanese economy experienced a significant rapid development during the war between 1937 and 1945. Indices in production showed increases in manufacturing by 24%, steel by 46%, nonferrous metals by 70%, and machinery by 252% (Dower, 1992). The economy was increasingly militarized, diversified, and sophisticated in ways that allowed them to achieve a transformation into peacetime activity. 

In the automobile industry, the 10 of the 11 major manufacturers in postwar Japan were born during the war period. Corporations like, Toyota, Nissan, and Isuzu, achieved prosperity during the war period as they were depended on in the production of trucks that would be used during the war. They actively drove out Ford and General Motors out of the Japanese market. Other corporate giants would be able to gain competitive advantage in the market as the war continued as seen by the success of Normura Securities, a firm specializing in bonds, which is not the second wealthiest corporation after Toyota (Gao, 2001). Hitachi and Toshiba, two of the largest producers of electric goods in the country, were established in 1910 and 1904 respectively. However, they would achieve prominence in the late 1930s and through the years of war. 

The Japanese corporations were extensively successful primarily due to their flexibility to the market. In the wartime period, these corporations were highly militarized as they incorporated the technologies to serve the better good of the military’s efforts. However, upon the end of the war, they were converted into peaceful economic development products. The privatization of companies was an integral factor in the success of the country as they expanded rapidly and without fear. The government advocated for a merger particularly between the automobile corporations, but instead borrowed bank loans to help expand their fleet and diversify their products. A strong and positive attitude ensures that these corporations continue to maintain their status in the global economy. Following the devastation of the Hiroshima and Nagasaki bombing, the US had a huge debt to pay with annual donations of $500 million annually between 1946 and 1949. This provided the needed funds to expand and transform the militarized products into consumer goods. By 1980, Japan achieved the status of the second largest economy in the world. 

US Reaction to the Oil Embargo 

During the OAPEC oil embargo, the US suffered greatly due to the enforcement of the sanction. Within three short months, the price of oil rapidly increased from $3 per barrel to $12. In this regard, the country experienced a significant hike in prices of fuel and numerous shortages. As a result, political leaders at the local, state, and federal levels called for measures of conserving available energy in the country. In this case, speed limits were enforced as it enabled vehicle owners spare fuel while gasoline stations would close on Sundays to prevent wastage. Additionally, the homeowners were encouraged to restrain from setting up holiday light during Christmas seasons as was the tradition in majority of the locations. The oil embargo had significant effect on the US economy as it heavily affected the American automotive industry. Prior to the economic sanction, Ford and General Motors were global leaders in production of heavy machinery that consumed fuel excessively. It provided Japanese manufacturers with an opportunity to surpass them as their models were smaller and more fuel-efficient. 

The enforcement of the oil embargo would be lifted after only six months in March 1974. Nevertheless, the effect continued through to the end of the decade. The proponents for environmental conservation reached new heights during this energy crisis (Graf, 2012). It became an integral factor in the legislative process in Washington. The Emergency Petroleum Allocation Act of 1973 was passed by Congress at the height of the panic along with the Energy Policy and Conservation Act of 1975 to provide a change of attitude towards fossil fuel consumption. The creation of the Department of Energy in 1977 would ensure the continued practice in the years to come. There were calls for the federal government to subsequently increase domestic production of the oil which began almost immediately and made drastic changes to become a self-sufficient producer (Van Bergeijk, & Siddiquee, 2017). It is this factor that enabled the American society to persevere through the crisis as opposed to the European countries that were affected in a greater magnitude. Furthermore, efforts were made to reduce dependence on fossil fuels. Renewable energy such as nuclear, solar, and wind power were actively sought after to supplement the crisis in domestic and economic use. 

China Reaction to the EU Arms Embargo 

The EU-China relations that commenced in the mid 1970s have led to development of a cooperative community in trade and maintenance of peace. However, the implementation of reforms beginning in 1978 led to a drastic recognition of the country in the global political sphere (Weitz, 2012). Despite the enforcement of the EU arms embargo, the country continues to improve itself as a major powerhouse of developing technologically advanced weapons. It is important to note that the country is currently a recognized nuclear weapons state with a significant arsenal to protect itself from potential threats (Weitz, 2012). The nation currently holds the largest standing army and the second largest defense budget. In this regard, it is evident that the country is becoming more self sufficient in production of its weapon systems as it refrains from the use of sources from the US and European manufacturers (Wacker, 2005). The primary factor enabling the improved progression in arms acquisition is the sourcing from Russia. The latter as is evident in history does not adhere to Western countries’ policies particularly in disarmament of non-democratic states. Russia has therefore, become a major provider for the arms and defense arsenal. The high PPP of the country is a major contributor to its ability to evade the embargo set. There has been leaked information that the EU provided China with defense exports of worth €400 million in 2003 a clear indicator that the regional organization is significantly relaxed on its intention to uphold the sanction (Rettman, 2011). 

Iraq and other states’ Reaction to UN Economic Sanctions 

The UN sanctions particularly those enforced in the 1990s have proven to lack significant effect in the practices of the target countries. For instance, the organization implemented a disarmament sanction to prevent further developments of arms by Iraq. However, the Saddam Hussein regime was able to corrupt practices set in place to prevent by the UN. The oil-for-food program was an intended strategy to help the country ensure that revenues earned from oil trade by the country was primarily for use in feeding the civilians and replenishing Kuwait for damages caused during the invasion of 1990. However, Saddam Hussein was able to sneak away nearly $11 billion in revenue through corrupt practices (McMahon, 2006). It is believed that the funds have been instrumental in the developments made by terror groups present in the Middle East that target Western countries. Another failed economic sanction is that of North Korea. For nearly two decades, the sanctions have shielded the ruling circle from the effects of economic sanctions. In this regard, through continued enforcement of repression and authoritarian rule, the rulers maintain the highest level of power in the organization. Pressure from China on the UN has weakened the impact of the sanctions (Peksen, 2016). China continues to be a major participant in trade with the isolated country helping in provision of major goods such as food and other necessities. Kim’s regime has extensively expanded its nuclear program with the latest tests proving it could launch missiles into the US territories (Salisbury,2017). 

Conclusion 

Numerous scholars identify the importance of economic sanctions on targeted countries and their partial success in foreign relations. It is essential that significant evaluation is employed to identify ways of making significant improvements (Bapat, Heinrich, Kobayashi, & Morgan, 2013). Sanctions evolve over time and therefore cannot be duplicated as the standing order. In this case, while the US economic warfare proved to be an effective measure of curtailing the supply of raw materials into Japan, a similar strategy may not be effective in years to come. The latter state has become a self-sufficient producer of technology and machinery with the US a beneficiary in its productions. Japan may even hold the upper hand in due to availability of high technology in the country. In the same regard, the UN sanctions are depicted to have almost no effect on changing behavior or achieving desired outcomes. This incidence primarily hinges on the duplication of sanctions from one country to the next. The practice becomes monotonous and with upcoming future super powers like China, India, and Japan, they may revolt against these laws. Their importance in trade activities will prevent significant retaliation from the US. 

References 

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