SANCTIONS AGAINST RUSSIA: A GLOBAL ZERO SUM GAME

Sanctions involve one party attempting to change another party's behaviour without the use of weapons or the military. The offending party is being punished economically, socially or politically. Sanctions range from travel bans and arms embargoes, to complete trade bans.

Sanctions can widen the conflict, add to its destructiveness, and sometimes prolong it. Additionally, threats inherently cause stress and can affect one's rationality or problem-solving capacity. They can also generate resistance. Often, the target would rather face a threat than be perceived as weak by giving in to a threat. Sanctions convey a message of indifference and hostility. Furthermore, when senders impose sanctions on a target, the target is much more likely to impose sanctions on the sender when given the chance.

Finally, if there is domestic support for the targeted leader, sanctions may generate a "rally around the flag" or nationalist response, in which a population under threat unites around its leaders. Rather than having a pacifying effect on the targeted actor, sanctions then strengthen a leader's domestic support. Outside pressure can also be used by leaders to ignore domestic troubles, placing the blame for economic instability on the outsider, and providing political cover to further repress domestic dissidents, while directing resentment toward those who impose the sanctions.

Economic sanctions are a policy instrument with little, if any, chance of achieving much beyond making policy-makers feel good about having done something for a particular domestic community.

In order to improve the effectiveness of sanctions, experts recommend maintaining a list of individuals and entities responsible for, or supportive of, objectionable policies in targeted countries, who are then subject to financial sanctions and seizures, as well as travel bans. When whole sectors of society, such as businesses or communities, are the targets, they recommend expanding sanctions to strategic commodities, such as arms (although arms embargoes have traditionally lacked adequate enforcement), petroleum products, and commodities of great value to decision-makers .

The purpose of sanctions (coercive diplomacy) is to effectively manipulate the threat of force in a diplomatic way, in order to compel the target into taking action it would have otherwise not chosen. This is a very difficult task, with tremendous stakes for the coercer.

Coercive diplomacy is very difficult to theorize and to strategize. There is the potential for backfire. For example, if the coercer pursues a gradual turning of the screw strategy, only incrementally increasing pressure on the target, the target may doubt the urgency, resolve, or credibility of the coercer, or may be able to adapt to the new circumstances. On the other hand, a sudden escalation could provoke an adverse response from the target that produces the opposite of the desired outcome.

It is a strategy that is tremendously difficult to implement successfully. It requires a very delicate balance of conditions and factors in order to achieve success, and there are ample opportunities for the strategy to backfire, leaving the coercer in a worse place than when it started. It should be reemphasized, that the consequences for failed coercive diplomacy could be critically damaging to the coercer state. It faces one option of backing down, which would mean potentially losing future credibility, as well as accepting the continuity of a status quo it finds unacceptable. Given the obstacles lying in the way of successful coercive diplomacy, there are plentiful potential causes of failure.

Russia, for its part, has at its disposal some mighty economic weapons with which to retaliate, as needed. The economic pain from this tit for tat of sanctions will be, in particular, inflicted to the EU. Because of the interconnections between all economies and financial markets, mutual economic sanctions could drive a still fragile world economy to a financial crash. The West, acting as if it solely and arrogantly represents the international community, has formulated a hazardous policy to isolate Russia. This ill-advised strategy is extremely short sighted on all levels. Russia is fully integrated into the global economy.

Russia’s retaliation could make the global economy “spiral into chaos.” Sanctions on Russian exports would greatly expose the EU. Europe imports 30 percent of its gas from the Russian state-owned company Gazprom. Russia is also Europe’s biggest customer. The EU is, by far, Russia’s leading trade partner and accounts for about 50 percent of all Russian exports and imports. In 2014, EU-Russia overall trade stands at around 360 billion Euros per year. Russia’s total export to the EU, which is principally raw materials such as gas and oil, stands at around 230 billion Euros, while Russia’s imports from the EU amount to around 130 billion Euros of mainly manufactured products as well as foodstuff. The EU is also the largest investor in the Russian economy and accounts for 75 percent of all foreign investments in Russia.

In case of Western economic sanctions, Russian lawmakers have announced that they would pass a bill to freeze the assets of European and American companies that operate in Russia. On the other side, more than 100 Russian businessmen and politicians are allegedly targeted by the EU for a freeze of their European assets. Besides Alexey Miller, head of the state-owned Gazprom, the CEO of Rosneft, Igor Sechin, is also apparently on the sanction hit list. Rosneft is the largest listed oil company in the world and, as such, has partners worldwide, including in the West. For example, the US-based company Exxon-Mobil has a $500 million oil-exploration project with Rosneft in Siberia, and Exxon-Mobil is already in partnership with the Russian giant oil company to exploit Black Sea oil reserves.

Economic sanctions and Russian retaliations are a recipe for disaster. This game of sanctions is a global zero sum game that could make the 2008 crash look for all of us like a walk in the park.