Within 48 hours of President Vladimir Putin’s wanton invasion of Ukraine, the West had employed its most significant possible sanction on the Kremlin and cut off the Central Bank of Russia from international markets. As a result, Russia stands on the precipice of default, just one month after registering a record current account surplus.
Sanctions – or more accurately, the threat to impose them – were originally intended to serve as a deterrent. Indeed, the West had outlined the crippling sanctions Russia is currently facing in the year before Putin launched his invasion.
These threats aimed to show Putin the major costs he would incur if he crossed a red line, without raising the possibility of a destructive military confrontation. They have now been fully realised, but Putin seemingly decided that impoverishing the Russian people is a cost that he is willing to pay in his quest to subjugate the Ukrainian nation.
Indeed, Putin has not been deterred by sanctions. He invaded Ukraine regardless of the clearly serious threat of severe sanctions, with a level of determination that exceeded the expectations of almost all observers, including many among the Russian elite.
Today, JP Morgan forecasts Russia’s gross domestic product (GDP) will contract 12 percent, the Institute of International Finance warns of a 15 percent contraction, and Ilya Matveev, a former professor at the Russian Presidential Academy of National Economy and Public Administration (RANEPA), warns of a potential 30 percent collapse. Russian living standards are expected to fall to levels last seen in the 1990’s, and may fall further still.
Russia’s economy is already being crippled. Yet as his country’s economy collapses behind army lines, Putin pushes on.
Despite all this, many in the West still continue to see sanctions as a deterrent. US Deputy Treasury Secretary Wally Adeyemo said as much in a March 14 interview with CNBC, warning “(Putin) has a choice to continue invading Ukraine or to de-escalate… as long as the invasion continues, sanctions will continue.” Adeyemo spoke of additional export controls and did not rule out a trade and shipping blockade, as Ukraine’s President Volodymyr Zelenskyy has requested.
Given they have clearly failed to deter Putin thus far, it is now worth examining how sanctions can be used to promote peace.
Sanctions as an instrument of regime change?
Many believe sanctions can bring peace by serving as an instrument of regime change. However, they have an extremely poor track record in this regard – just look at Iran, Venezuela or Cuba.
Furthermore, sanctions being seen as a tool to foster regime change can be counterproductive in the long run, as it makes proposals to lift or adjust sanctions when the regime they were used against remains in power extremely political within the country that has imposed them – the US’ history of sanctions against Iran is a case in point.
Washington and Brussels have not yet invoked sanctions as a regime change tool in Russia’s case. A spokesman for the British government did initially say they aimed to “bring down the Putin regime”. He subsequently said he had misspoken, even as James Heappey, the UK minister for the armed forces, made similar claims in The Telegraph and declared that “the sanction (sic) regime will endure beyond this conflict.”
Whether the West is seeing regime change through sanctions as a real possibility or not, there is little reason to believe isolation and economic devastation born out of sanctions would topple Putin’s regime.
Given his track record in the secret police, antagonism towards human rights, love for state propaganda, and crushing of dissent, Putin may even welcome Russia’s status as a new North Korea and prosper as the leader of a pariah state. The small coterie of elite from the security services that surround him are also unlikely to oppose him to try and free the country from sanctions.
Lifting sanctions too early can also be harmful
Although sanctions should not be relied on as an instrument to foster regime change, that is not to say they should be lifted without any policy change from the Kremlin.
Sure, sanctions failed to deter Putin, but reversing them while Russian forces remain in Ukraine would forever weaken the threat of future such sanctions, making them an even less effective deterrent.
Sanctions serve as an instrument of war by political means. And this is certainly far preferable to renewed “great power conflicts” which the world has avoided since World War II.
Although sanctions on Germany and Japan failed to deter them back then – and arguably even accelerated their push for war – they have become a far more effective tool, at least in the US arsenal, in the post-war global political economic system in which the US dollar dominates.
The way forward
The sanctions may not convince Putin to end his assault on Ukraine, but they will have long-term consequences for Russia and its people.
The technology sanctions will cripple the country’s military industry, and the sanctions on its central bank mean that Russia’s potential to be a significant player in the global economy is over.
Russia’s economic collapse will undoubtedly have political consequences, though they may well lead to a rallying-around-the-flag effect given the Kremlin’s efforts to silence any media that does not slavishly toe its line.
And the sanctions will harm everyday Russians. The technology restrictions, for example, will make it very difficult for Russia to import modern medical equipment given the regulatory hurdles involved. There are already reports of shortages of imported medicines.
Russian propaganda will seek to cast such consequences of sanctions as evidence for the claims that the West is waging an economic war against Russians.
It is therefore imperative that the West outlines a path to easing sanctions if and when Russia withdraws from Ukraine. This could help raise public and elite pressure on Putin to take action to alleviate the economic catastrophe he has wrought on his population.
The West also needs to urgently set up mechanisms to ensure that humanitarian supplies and basic foodstuffs can continue to be supplied to Russians.
Furthermore, rather than expel Russians from cultural and educational institutions abroad, the West should welcome them with open arms. Frozen funds and assets should also be reserved for the benefit of the Russian people.
Sanctions have so far served as a stick – one that has failed to browbeat Putin into submission. Now that Russia’s economy is collapsing and the war in Ukraine wages on, there is little left but to dangle them as a carrot.
That too may fail; Putin was presented with the choice of impoverishing his people for a war of aggression and took it, so it is unlikely he will take the choice of ending it to alleviate their pain.
We lose little by trying, however. It is certainly better than continuing to do the same thing over and over and expecting different results. Furthermore, laying out a sanctions off-ramp and facilitating the continued provision of medical and humanitarian supplies would also demonstrate that our values are universal.
Russians are governed by a strongman with no regard for their wellbeing, but we can tweak sanctions policy to show that the international community, in contrast, does care.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.