What is the myth?
Western sanctions were first imposed in March 2014, after Russia annexed Crimea, and have escalated to punish a widening range of actions. They have become an instrument of choice for dealing with Russia. How they are assessed therefore matters. In debates of their effectiveness, at least four variations of the myth that the use of sanctions is ‘the wrong approach’ – or even pointless – circulate:
- Sanctions aren’t working. This is the most important version of the myth. It argues that sanctions are ineffective because Russian behaviour has not changed in response to them. Russia persists in, and has broadened its range of, unacceptable actions. It continues to occupy Crimea, intervene in Ukraine, and conduct other major operations such as cyber-hacking and the Salisbury nerve agent attack.
- Sanctions are not hurting Russia. This version of the myth argues that Russia is too large and resilient to be hurt by sanctions. No other country of Russia’s size has faced major sanctions since 1945.
- Sanctions make Vladimir Putin stronger. This holds that sanctions boost Putin’s popularity: by presenting himself as the defender of Russia against a hostile West, the president benefits from a ‘rally round the flag’ effect, including among elites.
- Sanctions are driving Russia towards China. In recent years, this argument goes, Sino-Russian relations have deepened and are now at their best since the 1950s.
Who advocates or subscribes to it?
Several analysts and policymakers hold one or more of these incorrect positions. Some argue that Russia has ‘survived sanctions’ and will continue to do so, in part by virtue of having the world’s fifth-largest foreign-currency reserves, a sovereign wealth fund worth the equivalent of 10 per cent of GDP, and resources to bail out sanctioned companies. Others argue that ‘sanctions make Putin stronger’, in particular by increasing elite dependence on him for support and compensation. Some go further and argue that sanctions are counterproductive – in particular, that they are pushing Russia into an alliance with China that threatens Western interests.
Why is it wrong?
The contention that sanctions aren’t working is wrong in three ways. First, at key moments sanctions have been critical in influencing Russian actions. There is evidence that the prospect of a severe escalation in sanctions, in combination with Ukraine’s military resolve, helped deter Russian-backed separatist forces in eastern Ukraine from taking the strategic city of Mariupol in September 2014. The prospect of sanctions may also have deterred further advance by Russian and Russian-backed separatist forces after the routing of Ukrainian troops in Debaltseve in February 2015.
Second, this argument ignores both the design of sanctions on Russia and the global experience of sanctions. So far, Russia has been sanctioned for seven years, a short time in sanctions history. Previous sanctions regimes, against smaller targets, have typically taken longer to be effective. For example, Iran was sanctioned for 10 years before it agreed the Joint Comprehensive Plan of Action (JCPOA) in 2015. Furthermore, many sanctions are designed to have cumulative impact by restricting critical sectors’ access to technology and finance. The longer sanctions are in place, the stronger their effects. And some of the most significant measures – the Countering America’s Adversaries Through Sanctions Act of 2017 and the severe US Treasury sanctions on Russian officials and oligarchs in April 2018 – are also the most recent.
So far, Russia has been sanctioned for seven years, a short time in sanctions history. Previous sanctions regimes, against smaller targets, have typically taken longer to be effective.
Third, sanctions work not only by changing unacceptable behaviour but by demonstratively condemning it. In punishing violators, they reaffirm collective commitment to norms of accepted behaviour and principles of international order. If such norms and principles are not symbolically upheld, their legitimacy may erode and be challenged globally. Upholding them has also boosted Ukraine’s own morale and capacity to resist Russian pressure.
As for the next myth variant, that sanctions are not hurting Russia, sanctions against a large country do not work by destroying its economy. Nor have Western sanctions sought to do this to Russia. Rather, they are designed to impose growing costs on the key energy and finance sectors – and, more recently, on individuals and companies close to Putin – through longer-term loss of access to technology and investment, and through international isolation. The US has demonstrated its ability, especially since April 2018, to target oligarchic figures through major financial sanctions. There is abundant evidence that the economic and psychological impact of sanctions is growing among Russian officials, elites and the wider public. Furthermore, Russia continues to develop policies that reflect Kremlin concern about its vulnerability to sanctions (although it has struggled to do so effectively). Since 2018 these policies have included a major anti-sanctions strategy, rapid de-dollarization of reserves, and efforts to conduct trade without dollar transactions. Russia has also sought to substitute Western technology and skills by building up domestic capacity and sourcing from Asia.
Nor is there evidence that sanctions make Putin stronger. On the contrary: Putin’s popularity, which spiked after the annexation of Crimea, has fallen even as the West has imposed stronger sanctions. As of March 2021, Putin’s approval rating stood at 63 per cent – close to historic lows for him. No less significant, in January 2020 some 78 per cent of Russians believed that Russia should treat the West as a friend or partner, up from 50 per cent in 2017 – before the most severe sanctions were imposed. Moreover, there is nothing to suggest that Putin’s standing among, or control over, elites has grown. Sanctions provoked by his policies have alarmed elites by threatening their access to the international financial system. As a result, capital outflows from Russia have escalated, in defiance of Putin’s express wishes. Sanctions, together with domestic sources of declining economic performance, are making elite politics more, not less, fractious and uneasy.
Nor are sanctions primarily responsible for closer Russia–China cooperation. While this trend has almost certainly accelerated – and on terms less favourable to Russia – due to sanctions, it began in 2012, before they were imposed, and reflects deeper factors. It is an inevitable development in relations between one of the biggest exporters and one of the biggest importers of energy, sharing a long border, whose regimes have both taken an increasingly anti-Western turn. If economic sanctions were driving a Sino-Russian alliance, broader economic ties would be especially strong. But this is the weakest part of the relationship. Less than 1 per cent of China’s foreign investment goes to Russia. China’s hard bargaining has disappointed Russia, while local suspicion and hostility towards investors have disappointed China. Sanctions themselves have also deterred China from some deals. Meanwhile, thoughtful Russians quietly worry that their country could slip into a position of subordination.
What is its impact on policy?
Those who call for lifting sanctions on the grounds that they are ineffective rarely, if ever, propose alternative policies that might do more to change Russian behaviour. They want the West to remove measures but not apply better ones. To this extent, their argument is at best poor strategy and at worst made in bad faith. Lifting sanctions unilaterally without a change in Russia’s behaviour would send the opposite signal – that serious violations of established norms do not fundamentally matter. By calling into doubt the sanctioning states’ credibility and resolve, such a step would embolden Russia and others to challenge these norms.
Those who call for lifting sanctions on the grounds that they are ineffective rarely, if ever, propose alternative policies that might do more to change Russian behaviour.
An understanding of global sanctions experience counsels strategic patience. Although the myth has not been widely taken up at official level and its impact on Western policymaking has been insignificant to date – indeed, the use of sanctions against Russia has expanded – the concern remains that the myth might gain policy traction in the future. Success depends on credible, firm and consistent application over years and even decades. Western containment of the Soviet Union during the Cold War is an exemplar. Sanctions should also be judged by the same standards used for other foreign policy instruments. The fact that Russia has not yet implemented the Minsk agreements or halted its involvement in Ukraine – still less the fact that it has not withdrawn from Crimea, a goal never set by sanctions – is not a case against sanctions. These are the hardest goals; no policy could be expected to achieve them on its own.
What would good policy look like?
Sanctions may be the West’s most potent instrument. They play to its biggest strengths: Russia’s dependence on technology, capital and dollar transactions; and its elites’ need to send assets beyond the reach of a predatory state that, in many cases, helped them acquire these assets. Sanctions are a precision tool, targeting individuals and sectors with little impact on the wider population, especially compared to the effects of oil price decline and domestic structural factors. Russia cannot retaliate in kind effectively: its 2014 ban on food imports had little impact on the West, but raised domestic food prices. In effect, Russia sanctioned its poorest citizens. Finally, the West enjoys escalation dominance: sanctions could go much further, as Russian officials and elites fear they might.
In sum, though deployed for only a short time, sanctions against Russia have already shown their practical and normative value.
Policymakers should think about sanctions in the right way, and not hold them to impossible tests they must fail, as many critics do. No policy against a major adversary works through crushing impact that compels an immediate change of course. Policy works by influencing the interests, perceptions, expectations and resources of those in the decision-making and governance environment over time. This will also become more significant as the 2024 presidential election approaches.
Overall, sanctions can play an important role.