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Is This How Sanctions Are Supposed to Work?

Bruised but not yet broken, Russia’s economy sputters along as global energy and food prices soar.

By , the newsletter writer at Foreign Policy.
Customers stand in a queue to get in the Russian version of a former McDonald’s.
Customers stand in a queue to get in the Russian version of a former McDonald’s.
Customers stand in a queue to get in the Russian version of a former McDonald’s restaurant after its opening ceremony in Moscow on June 13. KIRILL KUDRYAVTSEV/AFP via Getty Images

Welcome to today’s Morning Brief, looking at the effect of Russia sanctions; French, German, and Italian leaders’ visit to Kyiv, Ukraine’s capital; Tunisia’s big strike; and the U.S. Federal Reserve’s historic rate hike.

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Russia and the Sanctions Puzzle

Welcome to today’s Morning Brief, looking at the effect of Russia sanctions; French, German, and Italian leaders visit to Kyiv, Ukraine’s capital; Tunisia’s big strike; and the U.S. Federal Reserve’s historic rate hike.

If you would like to receive Morning Brief in your inbox every weekday, please sign up here.


Russia and the Sanctions Puzzle

It’s been more than 16 weeks since U.S. sanctions meant to “impose severe costs” on Russia’s economy came into effect, and those hoping that an economic collapse might change Russian President Vladimir Putin’s mind on his invasion of Ukraine are still waiting.

Even as it shuts down some of its economic reporting, the Russian government announced a budget surplus for the first five months of this year of roughly $26 billion, spurred in part by high oil prices. First quarter GDP figures out today are expected to show a 3.5 percent increase for the same time last year—though a decrease of as much as 10 percent of GDP is likely by year’s end.

“The scale of international sanctions would have caused [an] economic collapse if theyd come out of nowhere,” Chris Weafer of Macro Advisory in Moscow told the BBC.

But Russias been experiencing sanctions on an incremental basis since 2014. Theres been an enormous ratcheting up, but theres also an element of this being something the country’s already been dealing with.

Elsewhere, others under U.S. sanctions go about their business: North Korea is reportedly preparing a new nuclear test, its seventh overall; Venezuelan President Nicolás Maduro is finishing a Middle East tour; and Iran is once again ramping up its uranium enrichment.

At the White House, officials are getting spooked that the economic measures they unleashed at the beginning of the war are having a boomerang effect. According to Bloomberg, Biden administration officials “are now privately expressing concern that rather than dissuading the Kremlin as intended, the penalties are instead exacerbating inflation, worsening food insecurity and punishing ordinary Russians more than Putin or his allies.”

That the sanctions aren’t having the desired effect shouldn’t be a surprise, Gary Hufbauer, an expert on sanctions policy and a senior fellow at the Peterson Institute for International Economics, told Foreign Policy: “It is quite unrealistic to expect that economic sanctions against a great power—and that would be Russia today—will substantially deter a policy course that the leadership has set upon. There is no experience that validates that expectation.”

Hufbauer’s research finds that when sanctions have worked, they tend to be on smaller, weaker nations. Sierra Leone, the Dominican Republic, and Nepal are all examples of when sanctions have achieved their desired outcome for the countries imposing them.

So why do they persist as a tool of diplomacy? In part, sanctions can be a useful way of placating a domestic audience, especially when a government doesn’t want to appear weak.

“When you have a big offense like this invasion, I would say sanctions are almost inescapable just to answer the potential domestic criticism, and then the tendency of the government will be to exaggerate the impact of the sanctions imposed,” Hufbauer said.

Perhaps that’s part of why they continue to be popular among U.S. policymakers. As Cornell University’s Nicholas Mulder found in his book, The Economic Weapon: The Rise of Sanctions as a Tool of Modern War: “Sanctions use doubled in the 1990s and 2000s from its level in the period from 1950 to 1985; by the 2010s it had doubled again.” Nevertheless, he argued, “while the use of sanctions has surged, their odds of success have plummeted.”

Even if they don’t lead to the intended outcome, don’t expect Russia sanctions to come off any time soon. Just ask Cuba or Iran, as powerful constituencies within U.S. politics continue to keep pressure on—even if changes aren’t in sight. “I think these are going to be in place for a long time,” Hufbauer said. “As long as Putin is in place, I think itll be very difficult to lift the sanctions.”

Ghosts of sanctions past. In the case of North Korea, it might be time to give up altogether and, as FP columnist Howard French writes, “consider what has never been tried before: ending the state of hostility between Washington and Pyongyang that has fueled North Korea’s push for nuclear armament.”

French proposes ending the North’s economic isolation, with the understanding that decades of sanctions have not stopped it from pursuing its nuclear goals. “The best hope for peace may lie instead in convincing the North that it has little to fear from the outside world and can thus afford to incrementally relax its own posture and perhaps even normalize its relations with foreign nations,” French writes.


What We’re Following Today

EU trio visits Kyiv. French President Emmanuel Macron, German Chancellor Olaf Scholz, and Italian Prime Minister Mario Draghi are expected to meet with Ukrainian President Volodymyr Zelensky in Kyiv, Ukraine’s capital, today in a show of support as the country continues to battle Russian forces. The trios trip comes as European leaders are set to grant Ukraine European Union candidate status (though full EU membership could take decades).

Writing from Paris on Wednesday, journalist Michele Barbero explored Macron’s thinking when it comes to Ukraine and Russia, as his focus on maintaining lines of communication with Putin rankles his Eastern European colleagues. 

On Wednesday, the United States announced $1 billion in new military equipment for Ukraine, but as FP’s Robbie Gramer, Jack Detsch, and Amy Mackinnon report, it’s still short of what Ukrainian officials say they need.

Tunisia’s strike. The Tunisian General Labour Union (UGTT)—the country’s largest and most powerful union—holds a nationwide strike today, with its 1 million members posing the biggest challenge to President Kais Saied’s rule since a July 2021 power grab. The union is taking action in part to signal its disapproval of plans to freeze wages and reduce subsidies to receive a $4 billion loan from the International Monetary Fund. To understand why the UGTT holds such sway, read last week’s FP report from Tunis-based journalist Simon Speakman Cordall.


Keep an Eye On

U.K. sticks with Rwanda plan. British Home Secretary Priti Patel has vowed to stick with plans to deport asylum-seekers to Rwanda after a last-minute court judgement prevented the program’s first flight on Tuesday. Patel told lawmakers on Wednesday that “preparation for the next flight begins now” and the British government “will not be put off by the inevitable legal last-minute challenges.” It’s not clear when the next flight will take place.

Murder in the Amazon. Brazilian police on Wednesday located human remains that likely belong to British journalist Dom Phillips and Brazilian Indigenous expert Bruno Pereira, two men who went missing in a remote area of the Amazon rainforest near the border with Colombia and Peru on June 5. The police said they found the site of the remains after a suspect confessed to killing the two men.

The Fed steps in. The U.S. Federal Reserve issued its largest interest rate increase in almost 30 years on Wednesday, raising its benchmark interest rate by three-quarters of a percentage point in a bid to quell inflation as data showed an 8.6 percent increase in consumer prices from a year ago. The aggressive move from the U.S. central bank has raised fears of a coming recession, something Fed chair Jerome Powell said he was explicitly trying to avoid.


Odds and Ends

Conspiracy theorists have been thrown some red meat after a Chinese state-backed media site, Science and Technology Daily, published an article saying Sky Eye, a 1,640-foot-wide radio telescope, had detected suspicious signals in its search for alien civilizations, before swiftly deleting the post.

Despite its disappearance, the story was soon picked up by other state-backed outlets. Zhang Tonjie, chief scientist on the project’s research team, is quoted as saying the signals could end up being Earth-based interference and that more research was required.

Colm Quinn is the newsletter writer at Foreign Policy. Twitter: @colmfquinn

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