“The Aberration of Sanctions”

Experienced in Sanctions

Within Germany’s foreign policy establishment, voices criticizing the economic war against Russia as an “aberration” and recommending that the sanctions be ended quickly are beginning to be raised. In an article, published by the periodical Internationale Politik (IP), Heribert Dieter from the Berlin-based German Institute for International and Security Affairs (SWP) writes that although sanctions are having an impact, – these are, however, completely different from what their advocates had expected.”[1] “The sanctions alliance has miscalculated or failed to consider at least three dimensions of their measures,” Dieter writes. First, “the Russian society’s potential for dealing with coercive measures,” which is much greater than assumed. “The Russian people know sanctions and how to live with them,” because already the Soviet Union had “been repeatedly confronted with economic sanctions” during the Cold War. “Due to these experiences,” Dieter notes, “the Russian society has probably acquired a degree of improvisational skill and a capacity for suffering,” that “clearly exceeds that of Western societies.”

Alternatives to the West

The impact of the sanctions on the finance sector is the second miscalculation made by the sanctions alliance, according to Dieter. For example, the exclusion of Russian banks from the SWIFT payment system has fueled “the search for alternatives. From May to July, the Chinese rival, CIPS, experienced a strong “upsurge in transactions.”[2] The longer the sanctions persist, “the more non-Western countries will find ways of making transactions outside of the West’s financial system,” therefore the sanctions alliance is only hurting itself. In addition, “the monetary reserves are losing their attractiveness,” because since the freezing of Russian currency reserves, there has always been “the latent risk” that “demands in foreign currencies will be confiscated.” “In the future, reserves will be maintained in other forms, to a growing extent,” predicts Dieter, “for example, in Gold, crypto currencies or possibly even in the form of state bonds of emerging countries.” A possible “shift in the currency reserves of non-Western countries” would probably also “lead to a further hike in interest levels in OECD-countries.”

Neo-Imperialism

Furthermore, according to Dieter, the sanctions alliance had not foreseen what reaction the non-Western world would have. Sanctions have an impact on “all countries trading with Russia” – “however non-Western countries had not been consulted or even asked for their approval before those sanctions were imposed,” notes the SWP expert, who teaches also at the National Institute of Advanced Studies in Bengaluru India, where he observed how “in India, this is provoking sustained disgruntlement.”[3] “The anger of Asian, South American and African countries about the way the sanctions were imposed” is “a bad omen for the strategically much more important geopolitical conflict with China.” Already back in March, the World Bank’s former head economist Pinelopi Goldberg warned that the sanctions the West was imposing on Russia are disadvantaging all countries and are “the last nail in the coffin of the rules-based international trade framework.” Dieter also quotes the British Guardian, which expressed criticism of the sanctions, back in July, saying “they are based on a neo-imperial assumption that Western countries are entitled to order the world as they wish.”[4]

In the Interest of the Population

Dieter points to the fact that the consequences of the sanctions and Russia’s counter-sanctions are already “painful in many countries of the European Union, but also in the developing and emerging countries:” “Even in the interests of one’s own population, it would be imperative to lift the sanctions on Russia.”[5] According to surveys, the latter does not appear to be necessary, at least in Germany. For example, in a survey taken in early October, 57 percent of the respondents were convinced that the sanctions were affecting Germany harder than Russia, with only 21 percent being of the opposite opinion. However, 33 percent were in favor of maintaining the sanctions on Russia, with another 30 percent in favor of tightening them even more. Only 18 percent were for loosening, and another 12 percent in favor of halting the coercive measures.[6] Of course it is unknown whether such support for the sanctions will survive the oncoming winter.

To confront

However, signs of growing unrest are becoming apparent in emerging and developing countries, which are suffering the consequences of the sanctions. Last week, India’s Minister of Finance, Nimala Sitharaman announced that there would be discussions of the sanctions against Russia within the G20 framework. The current food crisis and other grave problems are a "spillover impact of decisions taken and they will need to be discussed."[7] This will be the first time that the West will have to defend itself for its coercive policies in an important international assembly for practical policies. On December 1, India assumes the presidency of the G20 for the coming year.

[1], [2], [3] Heribert Dieter: Die Irrtümer der Sanktionsbefürworter. In: Internationale Politik 6/2022. S. 70-73.

[4] Simon Jenkins: The rouble is soaring and Putin is stronger than ever – our sanctions have backfired. theguardian.com 29.07.2022.

[5] Heribert Dieter: Die Irrtümer der Sanktionsbefürworter. In: Internationale Politik 6/2022. S. 70-73.

[6] Mehrheit unterstützt Russland-Sanktionen. n-tv.de 13.10.2022.

[7] G20 must discuss ‘spillover impact‘ of Russia sanctions: FM Nirmala Sitharaman. cnbctv18.com 01.11.2022.