Geneva – Economic sanctions imposed against Russia for invading Ukraine are the most comprehensive and coordinated actions taken against a major power since World War II.
Multinational companies across all sectors are pulling out of the country, taking their products, services, and jobs with them.
Russian people are seeing their purchasing power and livelihoods sharply eroded because of the depreciation of the Russian ruble currency.
New Zealand has rolled out sanctions imposed on Russia, as well as the $6 million previously provided in humanitarian support, bringing New Zealand’s total financial contribution to $11 million.
Economic sanctions have been used as a tool of war for centuries.
The primary objective of imposing sanctions is to deter bad behaviour, enforcing economic punishment on the targeted country, and to force rehabilitation, or changed behaviour by that country.
However, the success of sanctions depends on their enforcement and effectiveness, the World Economic Forum says.
Sanction efforts are most effective when coordinated and implemented multilaterally with allies, and poor design and implementation of sanctions policies often leads to them falling short of the desired effects.
After Russia initially invaded Ukraine in February 2014, the United States imposed a series of sanctions designed to punish and weaken the Russian economy through restrictions on trade and finance.
However, these sanctions failed to deter further aggression and we’re witnessing a worsening conflict. Given these circumstances, the world is now seeing the most severe and coordinated sanctions effort to deter further Russian military advances.
In the long term, all these measures will have dire consequences for the Russian economy.
We can see precisely this preference for economic tools to avoid nuclear war play out currently in most great powers’ relations with Russia over its aggressions in Ukraine.
In economic warfare, tools include everything from positive economic instruments, such as trade deals, to coercive ones, such as curbs on imports, formal sanctions and informal sanctions.
These can include popular boycotts such as investments in strategic competitiveness and regulations designed to change company behaviour.
Sanctions on Iran were successful in bringing the country back to the negotiating table, and indeed to agree to the Iran nuclear accord, when the Obama administration clarified the sanctions goal.
They said it was not a regime change (something Tehran would have always considered to be more costly than sanctions pain), but to persuade Iran to refrain from building a nuclear weapon.
