RESET: The Obama administration opts for fake sanctions on Putin

George Friedman:

The United States announced new sanctions on seven Russian government officials April 28. A long-used tactic, sanctions can yield unpredictable effects or have no effect at all, depending upon how they are crafted. It is commonly assumed that sanctions are applied when a target country’s actions are deemed unacceptable. The sanctioning nation presumably chooses sanctions to avoid war when war would be too costly or could result in defeat.

Sanctions’ stated purpose is to induce behavioral changes in a target state by causing economic pain. To work, sanctions must therefore cause pain. But they must not be so severe that they convince the target state that war is more desirable than capitulating to the demands of the sanctioning nation.

When Sanctions Work Too Well

In July 1941, when the Japanese invaded Indo-China, the United States responded by freezing all Japanese assets. The United Kingdom and the Dutch East Indies (today’s Indonesia) followed suit. The sanctions were quite effective, and Japan wound up cut off from the bulk of international trade, losing 90 percent of its imported oil. Japan had to respond, but instead of withdrawing from Indo-China, it attacked Pearl Harbor.

The Japanese example is worth considering. The United States placed Japan in a situation where its oil supplies would be depleted in months, at which point Japan would cease to be an industrial power. Tokyo could have accepted the American terms, but once it did this, it would have established a U.S. veto over Japanese decisions.

The Japanese did not trust the United States and were convinced that any capitulation to sanctions would simply lead to more U.S. demands. Tokyo understood the risks of war but calculated that these risks were lower than the risks of complying with U.S. demands (though the Japanese might well have been wrong in this calculation, and Franklin Roosevelt might well have known that Tokyo would choose war over capitulation). Faced with sanctions that would cripple the nation, Japan chose war.

Sanctions perform better against nations that lack retaliatory options, including the option of waging war. Iran is an example of a perfect target for sanctions. Without a deliverable nuclear device, it lacks the option to wage war, and it has few other ways to retaliate. (Even with countries like Iran, however, sanctions can have a limited effect if the target can find ways to get around the sanctions.)

Precision-Guided Sanctions

Placing effective sanctions on a country such as Russia is much more complicated than placing them on countries like Iran or the Central African Republic because the Russians have potential military responses. They also have the ability to retaliate by seizing Western assets in Russia: There are many Western companies doing business in Russia with significant equipment, factories, bank accounts and so on. Moscow also has the power to cut energy supplies to Europe. Whether it would be prudent for Russia respond in those ways is an important question, but the mere fact Russia has a range of retaliatory options is an important consideration.

Partly for that reason and partly because of a theory of sanctions that has emerged in recent years, the United States and some European countries have largely opted out of placing sanctions on Russia as a whole. Instead, they have place sanctions on individuals and a small number of companies in Russia deemed responsible for actions in Ukraine that the United States and Europe find objectionable. We might call these “precision-guided sanctions,” or sanctions intended to compel a change in direction without inflicting collateral damage or risking significant retaliation.

The idea of placing sanctions on regimes rather than on nations originated with the obvious fact that if successful, sanctions on nations harm the entire population, most of whom are innocent and powerless, while leaving the leaders who have created the crisis in power and free to shift the burden to the population. The Iraq example is frequently cited. There, a strong regime of economic sanctions was imposed on the country, severely diminishing Iraqis’ standard of living while allowing the leadership to profit from various loopholes intended to ease the burden on the public.

The idea of sanctions against specific leaders to avoid harming the general public emerged from this and other experiences. This approach has dominated the Western response to Russian actions in Ukraine. By attacking the economic interests of key Russian leaders, or at least of their inner circles, the West appears to be trying to force changes in Russian policy toward Ukraine. This raises a number of important questions.

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