Will the West’s stinging economic sanctions on Russia work? Will they get Russian President Vladimir Putin to finally see reason and force him to quit his war on Ukraine?
In the last few weeks, the answers to these questions have become ever more pressing. Every day, the terrible trauma and human cost in Ukraine only mounts, while cracks in Western resolve and unity are already apparent and at risk of widening with a prolonged war of attrition.
Doubts are also mounting regarding the European appetite for economic sacrifice. “Do we want to have peace, or do we want to have the air conditioning on?” Italy’s Prime Minister Mario Draghi queried in April.
Apparently, it’s the latter.
Europe decided to vote for air-conditioning and didn’t impose an embargo on Russian gas. And as winter approaches, European leaders are becoming increasingly alarmed about whether they’ll be able to keep the heat on or power factories while avoiding outages or imposing rationing. They’re also anxious they’ll be faced with social unrest in light of soaring energy bills.
In this context, few policymakers are willing to bet against Putin picking the most difficult moment for Europe to turn the gas off this winter, leveraging the dependency that successive European governments allowed to develop, despite plenty of warnings since the 1990s.
In a sense, we’re in a race against time — and in need of not only significant Ukrainian victories on the battlefield, but quick results from the wide-ranging Western sanctions imposed on Russia. But whether these are working is still a matter of debate.
Senior Ukrainian officials acknowledge this fight to beat the clock. Last week, Andrii Yermak, a lead adviser to Ukrainian President Volodymyr Zelenskyy told reporters in a conference call that “it would be a big mistake if we allow Russia to drag us into the winter of next year — this has to be resolved in 2022.”
He and other top Zelenskyy advisers are also adamant that sanctions are working. “The future of Ukraine depends on sanctions,” one official said. “If we look at the figures and projections for this year, we see that the Russian economy will definitely contract by 10 to 15 percent,” another adviser added.
“The unemployment rate is growing to 10 percent. More than 4 million will lose their jobs in Russia. We have also seen that the real income of Russian citizens has dropped by 7 percent — at least those are the projections. The major international businesses have left Russia. The sanctions will limit Russia from getting new technologies, which will create enormous pressure on the whole of the Russian economy,” he said, listing evidence of their effectiveness.
Ukrainian officials also acknowledge that sanctions would be even more effective if they were tightened and loopholes were blocked. “Russia is receiving much higher revenues than it received before on oil and gas because of trade flows and loopholes,” one conceded. And those revenues have allowed the Kremlin to fund an increase of 20 percent in state pensions.
There’s still some support of the Ukrainian view that sanctions are effective, however. A study published last week by researchers at Yale University states that the Russian economy is being crippled, and dismisses Moscow’s claims that it’s the West that’s suffering more from “a war of economic attrition.”
Using consumer data and figures from Russia’s international trade and shipping partners to measure economic activity since Putin launched his full-bore invasion, the researchers found the country’s position as a commodities exporter had been irreversibly eroded, having been forced to swap from its main markets in Europe to those in Asia. The study also found Russian imports have largely collapsed, as it’s become ever more difficult to lay hands on crucial inputs, parts and technology.
“Russian domestic production has come to a complete standstill with no capacity to replace lost businesses, products and talent,” the Yale researchers say. The result has been “soaring prices and consumer angst.”
Yet some of the study’s projections have also been questioned. Last month, the International Monetary Fund revised its initial Russian forecast for this year from an 8 percent contraction to one of 6 percent, saying crude oil and non-energy exports were “holding up better than expected.” It also noted that domestic Russian consumption was “resilient” despite sanctions. Other economists also now see a contraction of under 5 percent to be more likely.
Debating the extent of the broad economic damage Western sanctions are inflicting on Russia might be missing the point though. In the end, the primary purpose of sanctions is to achieve a political outcome — to either persuade Putin to quit or for impoverished Russians to oust him.
But there are currently no signs of either actually happening. And the history of collective international sanctions doesn’t offer a lot of hope.
Sanctions have been turned to again and again — increasingly so since the 1920s — with mixed results, and they’ve more often been effective against smaller nations. “While the use of sanctions has surged, their odds of success have plummeted,” notes Cornell University historian Nicholas Mulder in his new book “The Economic Weapon: The Rise of Sanctions as a Tool of Modern War.”
Tracing the rise of international sanctions as a coercive weapon aimed at stopping wars from breaking out or quickly curtailing them after the World War I, Mulder states that “The most successful interwar sanctions, against Yugoslavia in 1921 and Greece in 1925, involved threats rather than actual application.” And aside from those two occasions, he says that the results have been poor in preventing wars, shortening them significantly or prompting regime change. The more they are used, the more their chances of success decline.
Even at their best, sanctions can also take years to have any political effect — a point acknowledged by Michael McFaul, a Stanford academic and former United States ambassador to Russia, who is currently part of an international working group advising on sanctions. Along these lines, in last week’s conference call he cited the effectiveness of Obama-era sanctions in persuading Iran to strike a nuclear nonproliferation deal with the West — a process that took several years, from 2010 to 2015.
So, for now, it still seems like the only way for Ukraine to beat the clock is to be better armed, with the West giving Kyiv more advanced equipment — and in much greater quantities too.