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Sanctions - An Economic Boomerang

As Russia officially recognised two sections of Pro-Russia territories in Ukraine, the western world announced various sets of new sanctions on Banks and Individuals.


Sanctions have been used by large economies since post-World War I. But the question remains are they effective or do they do damage to even the countries applying them.


In the 1930s, Britain did not go through with sanctions on Nazi Germany cause a lot of German debt was owned by British Banks and sanctions would mean no servicing by them leading to bankruptcy issues.


As of today Russia, Iran, Venezuela, and some parts of China are under sanctions that have resulted in two-way impacts. For the countries getting sanctioned inflation is higher and the source of incomes is limited thus impacting the population at large there are exceptions like Russia & China. For the country applying the sanctions, people at home suffers as well cause many products or businesses were dependent on the sanctioned parties or countries.


Avoiding Sanctions is not in the control of any one country but the application of sanctions should have a full assessment of medium and long-term impact as this rarely makes the sanctioned country reverse its step.


The most difficult part is the implementation of such sanctions as the country or parties can bypass them as the execution is impossible to coordinate at all levels in such a complex layered world.


Thus, the feasibility and success ratio of such sanctions is less but that would not stop them from being used as economic weapons anytime soon.




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