Skip to main content

The Debate on Economic Sanctions

Since the last century, the era of military wars appears to have come to an end, leading the global community on a quest to find alternative ways of conflict resolution and protecting international law. One of these ways is imposing economic sanctions on other countries. These are restrictions or outright ban on trade, currency flows or investments from the other country. 


But do economic sanctions achieve their objective? 


History tells us that arguably, the answer to this question is that they don't. Formerly imposed sanctions on countries like Iraq, Iran, North Korea and recently, Russia, indicate that these sanctions not only turn out to be inefficient in barring the sanctioned countries from violating international peace, but also prove detrimental to other countries who are dependent on the sanctioned countries for necessities like food supplies, oil, etc. For instance, the recent imposition of economic sanctions on Russia by the US in the light of the Ukrainian war caused the oil prices in the international market to escalate, but did not compel Russia to cease the war with Ukraine.





In today's era of economic interconnectedness and geo-political complexity, it is not feasible for vulnerable countries to pull themselves out of mutually beneficial free trade, thus turning the idea of economic sanctions into a double-edged sword.


In addition to that, countries who anticipate retaliatory global response to their actions, prepare themselves for the consequences of these sanctions beforehand, and are thus able to evade them in certain ways. 


However, on the other side of the coin, these sanctions do represent a swift reaction from the international community to the acts of aggression committed by countries, as in the case of Russia. Moreover, they are also seen as a peaceful alternative to military use.


But whether they act as an efficient instrument of international policy or lead to the disruption of the global economy, will depend on specific circumstances. Nevertheless, the debate continues.

Comments

Post a Comment

Popular posts from this blog

The Not-So-Normal Story of Normality

Being students of economics, we have been made to study the Z table excessively throughout our statistics journey. Hence, before going off the Z table, we decided to explore more about the Z table itself.  In other words, having learned its technical use in solving a wide variety of statistical problems, we now delve into the interesting history of the normal distribution, unarguably the most popular distribution in modern statistics. The distinctive characteristics of symmetricity and bell-shaped structure impart normality a wide range of real-life applications in physics, biology, finance, hydrology, etc. Abraham DeMoivre Interestingly, the major credit for the origin of the normal distribution, also called the Gaussian distribution, does not go to Carl Gauss, but rather to Abraham de Moivre,  a mathematician and a contemporary of Isaac Newton. He used to plot the results of multiple binomial distribution simulations. Consequently, he discovered a pattern that resembled a be...
Post a Comment
Read more

The Paradox of Welfare

Amidst all the possible mechanisms that are used to tackle the problem of poverty, almost everyone would agree on the importance of welfare programmes implemented by governments all over the world. These programmes take the form of subsidies provided by the government for necessities like housing, food, energy and healthcare. But critiques of these poverty alleviation programmes have pointed out the ironic effect they have on people struck in poverty. This phenomenon is known as the ‘welfare trap’. Here’s how it works. The governmental assistance is provided to people who are unable to find work and whose income falls below a particular level. The benefits are then phased out when they enter the job market and their income crosses the threshold level. Now, since people in poverty are also rational actors, they are disincentivised from taking up work even when they are able to, when they realise that there is no net benefit that they gain from working. This happens since the jobs t...
Post a Comment
Read more