Economic sanctions as a tool of diplomacy: Successes, failures and implications for the global economy

Economic sanctions are one of the most used tools in international diplomacy today. This form of economic pressure is applied to force a target country to change its political behavior or achieve certain international goals without resorting to military action. Sanctions can take many forms, including financial restrictions, trade embargoes and asset freezes. But how effective are sanctions as a diplomatic tool? Do they bring more success or failure? And how do they affect the global economy?

A History of Sanctions: From the Cold War to the Present

Economic sanctions have been used for centuries, but their importance increased significantly in the 20th century, especially during the Cold War. Sanctions were often deployed in the struggle between capitalist and communist states as a way to limit the expansion of an adversary's influence. After the collapse of the Soviet Union, sanctions did not lose their importance - quite the opposite. The United States and the European Union have begun to use sanctions as a tool to resolve international conflicts and human rights violations, for example in the case of Iran, North Korea, or Russia.

Sanctions successes

Oft-cited successes of sanctions include the international pressure on South Africa in the 1980s that led to the end of apartheid. Sanctions in this case helped increase the regime's international isolation and fueled domestic protest movements. Another example is the sanctions imposed on Iran, which were a significant factor in reaching the nuclear deal in 2015. Although the United States decided to withdraw from the deal in 2018, the sanctions helped force the Iranian government to compromise.

Failure of sanctions

Despite several successes, sanctions often fail to achieve their goals. North Korea is one of the best examples of the long-term ineffectiveness of sanctions. Despite harsh sanctions imposed by the United States and the international community, the North Korean regime continues its nuclear program and remains isolated from the world. Similarly, sanctions imposed on Russia following its annexation of Crimea in 2014 have had limited impact on the policies of the Kremlin, which still refuses to withdraw from Crimea and continues to support separatist forces in Ukraine.

One of the key problems with sanctions is that they often punish ordinary citizens more than the ruling elite. Freezing oligarchs' foreign accounts may have a short-term impact, but they are usually not the ones who will feel the biggest economic consequences. For example, sanctions against Iran led to a sharp deterioration in living conditions for millions of people while the regime continued to maintain its power.

Impacts on the global economy

Sanctions have not only political, but also significant economic consequences for the entire world. Sanctions against Russia, imposed after the invasion of Ukraine in 2022, led to disruption of the global energy market. The price of oil and natural gas rose sharply, leading to a rise in inflation in Europe and other parts of the world. The European Union was forced to look for new energy suppliers, which led to increased investments in renewable sources, but also to the strengthening of trade relations with autocratic regimes such as Saudi Arabia.

Sanctions can also destabilize global supply chains. Technology and semiconductor embargoes against China in the US-China trade dispute have disrupted global electronics manufacturing and slowed growth in various industries.

The future of sanctions as a diplomatic tool

The question of whether sanctions will continue to be an effective diplomatic tool remains open. Increasing cooperation between sanctioned states, such as between Russia, China and Iran, shows that sanctions can lead to the creation of alternative economic blocs. These states are developing their own payment systems and trading infrastructure to circumvent Western sanctions, which could weaken their long-term effectiveness.