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Posts Tagged ‘sanction’

Will Biden Sanction Half the World to Isolate Russia? | Mises Wire

Posted by M. C. on March 24, 2022

Moreover, the US’s recent seizure of Russia’s central bank reserves should make any regime think twice about holding large amounts of dollars. If Washington can do it to Russia, Washington can do it to anyone, and other regimes are likely to see this and slowly flee the dollar. 

https://mises.org/wire/will-biden-sanction-half-world-isolate-russia

Ryan McMaken

It is becoming increasingly apparent that isolating Russia and totally cutting it off from the global economy is not going to be easy. 

As I discussed last week, from Mexico to Brazil to China to India and much of Africa, the world is resisting Washington’s call to treat Russia as a pariah nation. In the words of James Pindell, “Most of three huge continents—Asia, Africa, and South America—are either still working with Russia or trying to project the image of neutrality.”

Yes, the US will certainly inflict a lot of damage on the Russian economy with its sanctions, but it’s unlikely to be enough damage to incapacitate the Moscow regime. This is because much of the world has shown it plans to continue having relations with the Russians, albeit while taking some efforts to avoid any direct policy confrontation with Washington. 

But this all also means that if Washington wants to press the issue of global cooperation and assistance with US sanctions, the US is going to have to threaten many other regimes with secondary sanctions—sanctions designed to force compliance with the initial sanctions on Russia. This will be diplomatically and economically costly for the US. After all, if the US is trying to build up alliances and economic partnerships against a potential Russia-China bloc, trying to impoverish dozens of countries as punishment for noncompliance with Russia sanctions will only encourage other regimes to insulate themselves from both the US economy and the US dollar. Whether or not this happens will largely depend on how hard the US is willing to bully third-party countries in order to win compliance with its Russia sanctions. 

What Are Secondary Sanctions?

Before we proceed, let’s look at what exactly secondary sanctions—and the closely related “extraterritorial” sanctions—are. 

At their most basic, secondary sanctions are sanctions imposed on a third party that is not the target of the initial, primary sanctions. For example, if the United States wants to force a change of policy in Iran, the US will impose sanctions directly on Iran but might also decide that this isn’t enough. The US might also seek to prevent other countries from doing business with Iran as well. In order to do this, the US will then impose secondary sanctions on firms and entities in other countries that do business with Iran. 

See the rest here

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Russia Isn’t Nearly as Isolated as Washington Wants You to Believe | Mises Wire

Posted by M. C. on March 18, 2022

But it is becoming clear that most of the world’s regimes don’t plan on voluntarily casting Russia into the outer darkness. That means if the US wants to truly isolate Russia, Washington will have to threaten and coerce other regimes that aren’t going along with it.

https://mises.org/wire/russia-isnt-nearly-isolated-washington-wants-you-believe

Ryan McMaken

Some US policymakers and pundits are declaring that Russia—and its population—are cut off from the rest of the world. For example, political scientist Nina Khrushcheva has declared “Russia is hated by the rest of the world” and that “Russia is the global enemy.” The New York Times concludes Russia is now “an economic pariah” and that a “new iron curtain” is falling.

There is no doubt that the sanctions imposed by wealthy Western nations will negatively impact the Russian regime, the Russian economy, and the Russian people. Ordinary Russians, who currently enjoy a GDP (gross domestic product) per capita that is only a fraction of the size of that of many Western countries, will suffer greatly.

But when it comes to the degree of Russia’s isolation, those gloating about Russia being “cut off” are overstating the case. In fact, many of the world’s largest countries have shown a reluctance to participate in the US’s sanction schemes and have instead embraced a far more measured approach. So long as China, India, and other large states continue to be at least partially sympathetic toward Moscow, they will provide a large market for Russia’s natural resources and its other exports. And these nations have signaled they’re not cutting off Russia just yet.

Moreover, if the US is going to demand that the world fall into line behind US sanctions, that means the US is going to have to enforce its policy on reluctant nations. That ultimately means the US will need to threaten—or in some cases, implement—secondary sanctions designed to punish nations that don’t sanction Russia as well. The long-term effects of constructing a coerced global anti-Russia bloc may prove costly for Washington, and in any case, pronouncements of a new iron curtain falling around Russia appear premature.

Thirty-Five UN Member States—Representing Half the World’s Population—Abstained

For Americans watching TV news, it no doubt sounds like the entire world has united behind an American-led campaign of moral righteousness against the Russians. Out in much of the real world, however, things look a little different. Anthony Faiola and Lesley Wroughton summed up the situation in the Washington Post last week:

Many countries in the developing world, including some of Russia’s closest allies, are unsettled by Putin’s breach of Ukrainian sovereignty. Yet the giants of the Global South—including India, Brazil and South Africa—are hedging their bets while China still publicly backs Putin. Even NATO-member Turkey is acting coy, moving to shut off the Bosporus and Dardanelles straits to all warships, not just the Russians.

Just as Western onlookers often shrug at far-flung conflicts in the Middle East and Africa, some citizens in emerging economies are gazing at Ukraine and seeing themselves without a dog in this fight—and with compelling national interests for not alienating Russia. In a broad swath of the developing world, the Kremlin’s talking points are filtering into mainstream news and social media. But even more measured assessments portray Ukraine as not the battle royal between good and evil being witnessed by the West, but a Machiavellian tug of war between Washington and Moscow.

Meanwhile, James Pindell at the Boston Globe concludes,

Possibly lost in all the headlines [about the whole world being united against Russia] is that it is not the entire world against Russia. In fact, most of three huge continents—Asia, Africa, and South America—are either still working with Russia or trying to project the image of neutrality.

It easy to see why so many come to the wrong conclusions, however.

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