Russia invaded Ukraine and the West responded with harsh sanctions against Russia, its financial institutions, state-owned enterprises, wealthy people, and even President Vladimir Putin.
This is in the hope that the economic turmoil and subsequent pain will inspire the Russian elite to push Putin’s government towards a halting its war on its neighbour. This strategy has an inherent problem: it harms ordinary Russians, who can’t be held responsible for the dictatorial government’s actions and have little to no influence over their behavior.
It is worth considering whether or not these sanctions have any merit.
U.S. Treasury Department declared a range of new and expanded sanctions to Russia Thursday.
These include preventing Russia’s largest banks (the majority-government-owned Sberbank, and VTB Bank) from receiving payments via the U.S. financial systems. U.S. corporations are generally prohibited from purchasing shares or lending to Russian state-owned businesses, which include Rostelecom, Russia’s largest telecommunications company and the biggest railway operator.
This is being combined with travel bans and asset freezes for a variety of rich Russian people, known as “oligarchs”, and their families who are connected to Putin’s government. Today, the Biden administration added sanctions to Putin.
CBS reports that the U.S. Commerce Department also prohibits exports of “semiconductors and computers, telecommunications equipment, lasers or sensors”. The Congressional Democrats propose to increase tariffs for all Russian imports.
The impact of sanctions that his administration has placed so far has been highlighted by President Joe Biden.
“We’ve already seen the impact of our actions on the Russian currency—the ruble—which early today hit its weakest level ever,” the president said on Twitter yesterday. The Russian stock exchange plunged today. The Russian government borrowed more than 15 percent.
We’ve already seen the impact of our actions on the Russian currency — the ruble — which early today hit its weakest level ever.
Today, the Russian stock market crashed.
Additionally, the Russian government’s interest rate on borrowing jumped to more than 15 percent.
— President Biden (@POTUS) February 24, 2022
Bloomberg According to reports, Russia’s stock exchange fell by 30% yesterday. This cost the billionaires of Russia $39 billion.
So far it seems that Russian economic problems won’t affect its willingness to go on with the war.
Sanctions are “unquestionably” a cost. Justin Logan, senior fellow at Cato Institute, says that the question of whether the sanctions are costly enough and if it is transmissible to Vladimir Putin is the real issue. Logan believes that Putin’s sole focus on Ukraine as well as the changing military environment in Russia make it difficult for these sanctions to sway him.
He says, “On areas that states feel essential national security concerns they tend to not work.” ReasonThey also stated that the primary purpose of these messages is to displease Western governments about Russia’s invasion.
Sanctions are not likely to change Russia’s behaviour, so they are more like “virtue-signaling,” according to Will Ruger (president of the American Institute for Economic Research) and ex-Ambassador to Afghanistan of President Donald Trump.
“Something is trying to make collective punishment a reality. Ruger says liberals should not be too skeptical about the concept of collective punishment. You end up targeting people who don’t support the country’s policies. You could actually find them opposed to the policies of that country.
In fact, large antiwar protests have broken out in several Russian cities. Many people have been arrested as a result of their opposition to the invasion of Ukraine by their government.
Recent article Jacobin Russian activists point out that public opinion polls show that around 40 percent of Russians are against their country’s recognition for two separate regions of Eastern Ukraine. Putin’s recognitions of Donetsk & Luhansk prompted his invasion.
They write that while there are signs of “rallying around flag” is inevitable, they note that the Kremlin has been unable to incite enthusiasm for war despite total control of major media outlets and an outpouring propagandistic propaganda on TV.
International sanctions against Russia will not spare these antiwar protestors or the ambivalent daily Russian citizens.
Eli Clifton from the Quincy Institute, senior advisor, said that sanctions targeting wealthy or government-linked persons will not solve this problem.
He says, “It’s happening in individuals who are near the decision-making principles, even if they themselves aren’t decision-making majors,”
He argues that individual sanctions against Russian oligarchs can also be easier to enforce because many assets that Western governments might pursue are hard-to-move or hide, such as yachts or real estate.
Clifton says that broad-based sanctions, however, are notoriously hard to enforce. He points out that India and China don’t seem as passionate about punishing Russia over its invading of Ukraine. In fact, China is reducing its control over Russian imports as a response to Western sanctions.
While individually targeted sanctions avoid the problems of collective punishment, it’s still doubtful that making life more difficult for Russian oligarchs will produce changes in Russian policy vis-à-vis Ukraine, says Ruger. Ruger says that there are not many options available for the U.S. to force Russia into a peaceful settlement with Ukraine. He also said that Russia is irrelevant for American security and economic prosperity.
It doesn’t necessarily mean that you have to be the well-wisher. He says that you don’t have to use the bully pulpit in order to tell this wrong. But, the United States may face severe downside risks by doing something that might help Ukrainians fight in this battle.