Table of Contents
INTRODUCTION
The relationship between economy, power, and influence is intricate and multidimensional, and the global economy is a dynamic and ever-changing landscape. For a country to exert power and influence on the international scene, its economy must be robust. On the other hand, a country’s economic standing can be greatly influenced by its power and influence. Economic warfare is now considered to be a significant aspect of the geopolitical arena in which nations are racing to expand their influence on a worldwide scale.
In international politics, states have a particularly useful tool in the form of economic sanctions. With the end of the Cold War, their application has grown significantly. They can have a significant negative economic impact on the target developing economies even though they are vital in determining foreign policy.
Sanctions can take many different forms, such as asset freezes, trade agreements, travel restrictions, and many more financial limitations. States deliberately choose to employ sanctions as a tactic in economic warfare in order to fulfil their geopolitical objectives of reducing military conflict.
Economic sanctions are usually imposed first and foremost by Western democracies, especially the US and the EU. On the other hand, nations such as those in Latin America are typically the targets of these sanctions.
The main reasons for imposing sanctions are to force the target countries to behave in a way that the sanctioning countries want them to, like using violence or overthrowing their government. Sanctions can specifically target an individual or group, or they can be more narrowly targeted at an entire nation; the latter type of sanction is sometimes referred to as “smart sanctions”.
There is much debate over whether economic sanctions are effective in achieving their stated goals. The success rate of economic sanctions in attaining their intended objectives ranges from 65 to 95%.
Morgan and Schwebach’s (1997) research revealed that states should place heavy economic burdens on their target countries. Sen K. (2013) noted that sanctions placed on organisations that support human rights primarily lead to the deterioration of human rights environments.
Although the United States has long used economic sanctions as a tool in its foreign policy, their popularity at the moment is unprecedented. Their intention is to exert economic pressure on foreign governments so they will comply with Washington’s wishes.
One of the best examples is the 2015 Joint Comprehensive Plan of Action, which Iran signed after agreeing to strict limits on its nuclear programme.
Cypriot and Latin American economies, for example, have also contributed to this vicious cycle. Even though the precise conditions and results differ, sanctions frequently result in suffering for common people, political instability, and economic stagnation. Let’s examine the difficulties they encountered in the face of sanctions.
LATIN AMERICA: A HISTORY OF ECONOMIC STRUGGLES
Latin American and other countries have long struggled with economic problems, which have been made worse by economic sanctions. Cuba is a notable example, as the United States imposed an embargo on it for more than 60 years.
Cuba’s economy has suffered greatly as a result of the embargo, which has restricted its access to the global trade market and future economic growth. The people of Cuba have felt the heat of the sanctions, suffering severe shortages of necessities while the government has changed to survive.
Another country in Latin America that was impacted by the economic sanctions was Venezuela. Sanctions were specifically applied for violating human rights and causing political disturbance. But they have had a disastrous effect on the country’s economy, causing hyperinflation, shortages of food and medicine, and a large-scale exodus of Venezuelans looking for better prospects abroad.
Sanctions may be directed towards particular governments or leaders, but the worst effects are felt by the indigenous people. This much is evident. They frequently introduce new problems and modify old ones.
CYPRUS: A DIVIDED ISLAND UNDER ECONOMIC STRAIN
Since 1974, the island has been split into the self-declared Turkish Republic of Northern Cyprus in the north and the Republic of Cyprus in the south. In an effort to bring Northern Cyprus back together with its southern counterpart, the international community imposed sanctions on it.
Northern Cyprus faced severe economic consequences as a result of these sanctions. Its total cut off from international markets resulted in a significant downturn in the country’s economy and restricted prospects for its citizens.
The moral ramifications of the sanctions’ effect on the lives of common people are concerning, even though the political motivations behind them may be clear.
XINJIANG UNVEILED: HUMAN RIGHTS ABUSES AND SANCTIONS’ GLOBAL IMPACT
Along with other grave violations of human rights, China has targeted Uyghurs—a Turkic Muslim population native to Xinjiang—as well as other ethnic minorities in the area with severe physical abuse.
Target individuals and entities involved in Xinjiang-related issues faced difficulties when Treasury sanctions were placed on them. This restricted their access to U.S. financial institutions, which in turn limited China’s ability to trade and participate in global monetary transactions.
Already a victim of exploitation and forced labour, Xinjiang’s situation has been made worse by the EU sanctions. China’s repressive policies have been intensified as a result of these sanctions, aggravating violations of human rights. Although the intention is to address the issue of forced labour by the parties involved in Xinjiang, the workers and individuals who depend on these jobs in the area may suffer as a result.
The issue is getting worse because China denies that Uyghurs are being detained in large numbers in Xinjiang. The U.S., the UK, and the EU have joined forces to impose sanctions, which are having a serious negative impact on people’s lives and the economy.
THE IMPLICATIONS
Humanitarian Emergency
The humanitarian crisis is one of the most severe effects of economic sanctions on developing nations. Sanctions disproportionately affect the most vulnerable groups in developing nations, as they can impede the supply of basic goods and services and result in shortages of food and medicine, malnourishment, and subpar healthcare.
Stagnation in the Economy
Economic stagnation brought on by sanctions can hinder growth and prosperity. These policies can exacerbate unemployment and poverty by restricting trade and investment, which makes it harder for developing nations to overcome their underdevelopment.
Unstable Politics
Political unrest can occasionally be brought on by sanctions. The government may adopt repression by participating in foreign conflicts while avoiding domestic ones when it is facing hardship brought on by economic crises and sanctions.
Diplomatic Difficulties
Diplomatic relations may become strained as a result of sanctions, which could make it more difficult for the parties to hold amicable talks. Sanctions can sometimes make it more difficult to resolve disputes by preventing communication.
Unintentional Repercussions
Sanctions frequently have unforeseen effects, like smuggling, corruption, and the growth of black markets. Furthermore, the legitimacy and stability of governments in developing nations may be impacted by these actions.
IMPACT ON THE WORLD
Stability of the economy
The stability of the world economy can be upset by economic sanctions. These disruptions may have far-reaching effects on countries that depend on the global economic system, including decreased international trade, uncertainty in financial markets, and fluctuations in currency exchange rates.
Disruptions to the Supply Chain
Sanctions have the potential to obstruct the movement of materials and goods in this era of global interdependence, which can have an impact on global industries and supply chains. Trade restrictions pertaining to essential components or raw materials, for example, have the potential to impact global product production, thereby affecting consumers and industries across multiple nations.
Energy Costs
Energy prices may fluctuate as a result of sanctions placed on countries that produce oil. Any appreciable rise in energy and oil prices has the potential to have a knock-on effect on a number of industries, including the cost of living for people everywhere.
Monetary establishments
Financial transactions with particular organisations are frequently restricted by sanctions, which can have negative effects on foreign banks and other financial institutions. This may have an effect on how they operate and raise questions about the stability of the global financial system.
IMPACT ON INDIA
Investment and trade
India is a major player in international investment and trade. Sanctions placed on nations or organisations doing business with India have the potential to sabotage investment and trade relations, which will impact Indian companies and economic expansion.
Safety of Energy
Oil and gas are two energy fuels that India imports in large quantities. Sanctions placed on nations that produce oil may have an effect on the economy, drive up prices, disrupt supply, and compromise India’s energy security.
Positioning in Geopolitics
Like many other nations, India has a complicated geopolitical environment. The ramifications of sanctions may have an impact on India’s diplomatic ties with other nations, making it challenging to decide which aspects of its foreign policy to support the global community.
Monetary establishments
If they have ties to the targeted countries, economic sanctions may have an impact on the Indian financial sector. For Indian financial institutions, adhering to global standards can be difficult and expensive.
Defence and security
Sanctions may interfere with India’s international defence cooperation and acquisitions. India’s ability to defend itself may be impacted by restrictions on the sale of military hardware or technologies.
CONCLUSION
Economic warfare appears to be more likely to cause harm than good overall. In order to put an end to conflicts, respect human rights, or bring democracy back, sanctions are frequently placed on nations. Whether the consequences of sanctions are worse than what will happen to the population if the international community does nothing is debatable.
The effects of sanctions on those who are specifically targeted, such as business elites and leaders, are frequently very different from what the general public feels. Even though the purpose of sanctions is to put pressure on the powerful, the people who suffer the most are frequently the civilians.
These actions may result in more suffering for society’s most vulnerable members, decreased access to basic services, and financial hardship. The disproportionate burden that ordinary people bear—from financial difficulties to restricted access to essentials—highlights the necessity of reconsidering the morality and efficacy of such punitive measures.
The humanitarian and economic effects of sanctions must be carefully considered by world powers, particularly when they target developing nations. In a world that is changing quickly, striking a balance between diplomatic objectives and the welfare of vulnerable populations is a difficult but necessary task if long-term peace and stability are to be achieved.
