Recent economic data from Russia shows that US-led Western economic sanctions that have hit the ruble might actually be working in Moscow's favor.
US policy makers, including President Donald Trump, have defended the decades-old American approach that harsh economic sanctions could convince adversaries such as Russia and Iran to change course. But recent economic data from Russia shows otherwise.
A combination of factors that have led to an increase in the price of oil and depreciated the ruble have helped Russia's finances, according to the latest economic indicators.
Washington's decision to renew sanctions against Iran after the Trump administration withdrew from the Iran nuclear deal has pushed up the price of oil.
Iran, a key member of the Organisation of Petroleum Exporting Countries (OPEC), has seen a drop in its oil exports, which in turn has jacked up its price by 14 percent in international markets.
One of the biggest benefactors of increasing oil prices is Russia, a major energy exporter.
At the same time, Western sanctions led by Washington against Moscow are making the Russian currency, the ruble, lose its value.
A depreciated ruble means Russia will be earning more on its energy exports, which make up 40 percent of state revenue. This year, both Rosneft and Lukoil, Russia’s state-run oil companies, have seen the value of their shares rise compared to their Western counterparts.
Under these circumstances, it is quite unlikely that Russia will change its position on controversial issues ranging from the Ukrainian conflict to the Syrian civil war.
Many experts including prominent American political scientists have argued for years that sanctions are usually not effective to force adversary states to change their undesired policies.
Russian economic buildup has further confirmed the scientific approach that sanctions are not helping the cause of the sender state, which is the US in this case, instead, it’s benefiting the target country, which is Russia, on the receiving end of sanctions.
What data says about sanctions’ success?
In 2014, Manuel Oechslin, a Dutch professor on international economics, published a comprehensive study on the effects of economic sanctions. In his study “Targeting autocrats: Economic sanctions and regime change,” Oechslin argued that in most cases sanctions have failed to achieve stated goals.
“It appears that many of these sanctions episodes ended prematurely, i.e., the sanctions were lifted after a couple of years even though the intended goal had not been achieved,” wrote Oechslin.
Oechslin's conclusion heavily relies on data collected and examined by Gary Hufbauer, one of the leading experts on US sanctions.
A former senior US treasury official, Hufbauer examines 57 cases of US sanctions from 1914 to 2000 in a book titled "Economic Sanctions Reconsidered," which is regarded as one of the most influential takes on the subject
Out of 57 cases, he found only 12 cases, or 21 percent, being “partly successful,” while in 37 cases, which corresponded to 65 percent, sanctions could not even partly accomplish its defined objectives.
Hufbauer continued his research on the subject, taking up new cases from 2000 to 2010. The findings were strikingly similar to that of the pre-2000 period.
“We analysed data actually before Trump came in the office," Hufbauer told TRT World. "We could not see a big difference on the success rate or the characteristics of success between post-2000 and before 2000. It’s far less than half of the time, [that] sanctions succeed to achieve their foreign policy goals.”
In Russian case, more reasons for failure
In the Russian case, US-led Western sanctions have even more reasons to fail according to criteria set up by Hufbauer.
First of all, the American political scientist says that sanctions are mostly effective on small or medium size countries. “So there are many small African countries, Latin American countries, smaller countries even some Asian countries where this has been the case,” Hufbauer said.
Russia, which is one of the largest countries with a population of over 140 million people, does not fit this criterion.
Second, the target state needs to have a fair amount of conflict or political turmoil inside its territory in order to make sanctions successful according to Hufbauer.
Again Russia currently has no significant internal strife at all.
Third, sanctions paradoxically work against friends more than rivals in most cases, Hufbauer underlined. The logic behind this is that the leaders of the adversary countries have prepared for a sanctions regime more than friendly nations.
“The leaders of the targeted country have already anticipated the difficult relationship with the so-called sender country and they tend to be more resistant,” Hufbauer told TRT World.
Russian leaders have long held animosities with the US and other European nations, so this criterion also does not correspond to the Russian case.
Overall, there are considerable reasons in the Russian case that sanctions have met failure. Recent economic data from Russia, which shows US sanctions ironically help the Russian economy grow, backs up the argument that US sanctions against Moscow have already failed.
“If the target country is a large country which has a very strong leader, and has no internal political dissent or conflict, then, in those circumstances, the sanctions are unlikely to produce regime change. There are very few cases where regime change has occurred in such cases,” Hufbauer said.
“[As a result] sanctions against Russia or China didn’t change the political situation very much if at all. So those are the two extremes,” Hufbauer concluded.