Sanctions: Do they work? Lessons learned from North Korea, Iran, Cuba, Venezuela | Business Beyond

Sanctions: Do they work? Lessons learned from North Korea, Iran, Cuba, Venezuela | Business Beyond

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attacking a country's economy the use of sanctions is a way to hit your adversary where it hurts in the pocket it's something to do right short of going to war as russia faces an international effort to pile on the pressure without using direct military means let's look at how sanctions have been used in the past and their impact there has been a huge economic downturn and then there's the damage that is done to civil society to a society writ large in this video we'll ask whether sanctions actually work when you impose sanctions affects the people but it doesn't give a way out to the situation i think the sanctions tend to radicalize the status quo and look at the creative ways that countries are finding to get around them china and russia have for a very long time and quite willfully i believe deliberately helped north korea to circumvent the sanctions now that russia is facing its own torrent of restrictions from the rest of the world what can we expect find out on business beyond so let's start with the basics what are sanctions well the term covers a whole range of measures in organization like the united nations or european union or a single country can take against the government citizens or businesses of another country the aims of economic sanctions can be pretty large right but at the end of the day what you're attempting to do is to coerce another state to change its behavior in some fundamental way sanctions come in all kinds of forms including bank account freezes travel bans restrictions on selling certain goods to a country like weapons or on buying certain goods from them like oil and gas they are a powerful tool and in a way it is a step forward after the diplomatic tools fail right but it's a step behind a military action so it's something in the middle and in a way is to avoid a military conflict or try to avoid the military conflict and also try to send a message to other countries sanctions are just one tool in the coercion toolbox alongside diplomacy and of course use of your armed forces and the use of sanctions in recent years has shown that they are a tool when used right that can cut deep there's a perception that um economic statecraft or coercive economic statecraft um you know is less harmful right less bloodshed uh and that's true that's true in the sense that bullets aren't flying and people aren't dying uh but there are real effects um real economic effects that um [Music] that touch on on people's lives no country has felt the impact of international sanctions more severely than the pariah state of north korea north korea has been under trade sanctions from the u.s since the korean war way back in the 1950s but it's in the 21st century that the international community has turned up the heat the main aim to end north korea's development of nuclear weapons the country you know conducted its first nuclear test in 2006. and subsequently the u.n security council began to impose initially targeted financial sanctions we've had six other resolutions since then those have progressively imposed an arms embargo bans on certain north korean exports including coal minerals and believe it or not food they export seafood exports of north korean forced laborers and then finally and most importantly limits on north korean finance and use of the financial system that's joshua stanton he's an attorney and he helped the united states congress to formulate the u.s sanctions against north korea

over its nuclear programme and alleged crimes against humanity what these really add up to uh are there is really no official bilateral trade between the united states and north korea north korea isn't supposed to have access to the global financial system in the years that followed the introduction of u.s sanctions in 2017 their impact became apparent particularly on the north korean elites the price of an apartment in pyongyang and some of the elite districts fell by 80 percent we saw more cases of elite defections we saw that some of the chinese banks were avoiding business with north koreans joint enterprises in places like rasan were suddenly deserted there was much much less commerce visible in dandong which is the border town forest laborers were returning home were unable to pay their so-called loyally loyalty kickbacks to the state there was really a wide range of effects that were observable one of the criticisms of economic sanctions is that like military weapons they can hurt innocent civilians north korea is thought to be going through its worst economic crisis since the 1990s when famine killed millions of people aid agencies like unicef say international sanctions are hampering the humanitarian effort to help north koreans even despite exemptions for things like food and medical goods and while ordinary people are suffering the regime that the sanctions are supposed to be hurting the most is finding ways around them i sat on the u.n panel of experts to investigate sanctions of asian north korean sanctions invasion activity and report that to the security council north korea has established relatively effective sanctions invasion methods and techniques so kim jong-un's regime is continuing to test ballistic missiles of ever increasing ranges therefore can we say that the international sanctions have been a success if the success is to slow down the rate of proliferation uh or to increase the cost premium for north korea to launder its money they they have been a limited success uh in persuading kim jong-un that cling to nuclear weapons is a threat to the stability of the state and that is the only motive that will disarm him they have not succeeded now let's turn to south america venezuela once the continent's richest country has also been a major target of u.s sanctions

the venezuelan government has been accused of human rights violations of being involved in narcotics trafficking financial crimes and what the us calls insufficient cooperation in the targeting of terrorism and it's for that reason it's been the subject of a series of rounds of sanctions by the us since 2006 but amid months of intense anti-government protest in venezuela in 2017 with more than a hundred demonstrators killed as the state cracked down the u.s ratcheted up sanctions in a campaign to maximize pressure on nicolas maduro's government the u.s cut off venezuela's access to the american financial system barred transactions with its state oil company pede vasa and significantly expanded personal sanctions against figures connected to maduro the goal was regime change but with maduro's continuing hold over the country it hasn't worked there is a theory that the longer sanctions are in place the less powerful they become he replaces his relation with the us or other countries and he tries to get closer to the russian federation maybe iran which is also under sanctions and they are still there right and some other countries like that so they they tend to uh to build a new group of sanctions targeting countries as long-standing as u.s sanctions against venezuela have been the u.s boycott of cuba has been for a lot longer it's half a century more than 50 years since cuba was under sanctions in fact the u.s embargo against cuba marked 60 years this year it was on the 3rd of february 1962 that president john f kennedy signed a decree banning bilateral trade with cuba penalizing the country over its links with communist regimes like china and the soviet union there was a time when it looked like the 60-year anniversary wouldn't happen in the last months of his leadership former president barack obama made a historic visit to havana i have come here to bury the last remnant of the cold war in the americas but my time here in cuba renews my hope and my confidence in what the cuban people will do we can make this journey as friends and as neighbors and as family together [Music] but the normalization of u.s cuba

relations was quickly rolled back under trump who reimposed and widened the sanctions despite widespread recognition of their failure to achieve key policy aims like promoting democracy maybe that will be the best example to say that sanctions in the long term they are losing power and they could maybe work if a country is whether a democratic country or moving towards democracy but in authoritarian regimes seems like the situation is different often sanctions provide particularly one-party governments with a scapegoat for their citizens hardships is the united nations has said that the u.s embargo on cuba has cost the country's economy 130 billion dollars over nearly six decades that's in line with the island nation's own estimates let's turn our attention to another major target for international sanctions iran there is a host of sanctions that has been put on iran for more than the past decade starting with sanctions for human rights violations individuals which have been listed and whose whose accounts have been frozen to broad economic sanctions from oil and gas exports which are restricted to specific industries like steel or precious metals and even the iranian central bank has been put under sanctions at the height of the nuclear crisis leading the way with the sanctions against iran was once again the united states the u.s sanctioned over 650 iranian individuals and institutions under the obama administration that was before the u.s unilaterally withdrew from the so-called iran nuclear deal under president donald trump he effectively abandoned negotiations with tehran over its atomic weapons plans in favor of a much tougher sanctions regime the trump administration hit another individuals and institutions with restrictions iranian banks were also kicked out of the swift international banking messaging system for the second time something that russian banks are now having to reckon with the impact of the increased sanctions regime on iran was enormous there has been a huge economic downturn the iranian companies that had to cut business uh with european ones in particular made losses they had to redirect their trade they incurred cost in order to avoid or evade sanctions and then there is the damage that is done to civil society to a society writ large people who cannot travel who cannot visit their relatives um people who have to do two or three jobs in order to make a living because the currency has nosedived so there is a huge effect all in all that one can see however iran has also been able to find ways around some of the restrictions it's still managing to export its most important product china is iran's biggest customer for oil in fact it's importing more iranian oil now than it was before the sanctions were put in place some 800 000 barrels per day during january of 2022. iranian oil has been arriving in china in recent years marked as coming from countries like the united arab emirates oman or malaysia this is just another example of a sanctioned country turning to china or another sanctioned state to find a way round international restrictions so once again we have to ask are the sanctions achieving what they set out to achieve ironically the iran case where the nuclear deal was struck including because of internationally coordinated sanctions the iran case was taken as a good example of how sanctions can work now look at what happened after the deal was struck the united states pull out without you know iran giving them reason to do so and has imposed its own what is called maximum pressure regime of sanctions but in effect taking european companies along because they had to abide by by u.s legislation so what one can see now is a hardening of the regime an increase of the nuclear program precisely in the face of sanctions so iran doesn't make a good case in favor of sanctions anymore at this point you might have noticed a thread through this video the involvement of the united states over recent decades the united states has established itself as the world's sanctioner in chief it's deployed the weapon more often and with greater force than any other single nation so why is that after the wars um iraq and afghanistan there has been a tendency um in the united states to you know lash out uh at whatever um four enemy uh antagonist they find uh through sanctions especially financial sanctions that's because the united states is at the heart of the financial system worldwide so if you know someone is is barred from making dollar transactions an individual or an institution then they really can't do global business so having now looked at some of the targets of sanctions from the u.s and from the un the eu and other

nations can we conclude whether sanctions actually work research has actually been done into this the peterson institute for international economics looked at over 200 cases where sanctions were used it concluded they were overall at least partially successful around a third of the time 34 percent but the success rates depended greatly on what a government was trying to achieve if it was to force through a modest policy change such as securing the release of a prisoner the sanctions had some success more often than not but if the aim was something larger like disrupting a military adventure like russia invading ukraine the success rate was a lot lower sanctions can work very well if you're doing a few things right number one you have to enforce them number two i and i think this is the lesson of cuba you can't do it unilaterally you need to do it in concert with partners and number three you have to really aim at goals the main principle is that they can work in the short run i mean if they're imposed quickly swiftly and harshly um then they might work because of they because of them having a real effect an immediate effect the longer they last um the less likely they are to be successful so will the short sharp shock of the sanctions imposed on russia be enough to change president putin's military ambitions well there is cause for hope what we have seen uh recently with russia and the ukraine is in fact a well-coordinated multilateral international coalition-based strategy to force russia through economic pressure to change its behavior this is exactly what we should have done years ago in north korea the lessons learned from sanctions past include the fact that little is achieved with sanctions alone sanctions are more symbolic than effective they send a strong message right you are on the wrong path uh you have to you have to reverse course but only sanctions no if you go into it believing that you know sanctions is just one side of the core it's just one tool in your toolbox and that you still need to achieve diploma you know your the outcomes through through diplomacy but this is just your source of leverage i think that uh you can achieve a far higher success rate and i think that you know the us and its allies would be wise to approach sanctions from that perspective we've heard sanctions described as one step short of war but many of us are hoping the sanctions against russia can walk ukraine back to a state of peace and that's all from this edition of business beyond for more from us why not check out our playlist perhaps start with our video about the impact of inflation around the world at the moment remember to hit like and subscribe if you've enjoyed what you've seen until next time take [Music] you

2022-03-12 06:07

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