Sanctions, What Sanctions?

Sanctions, What Sanctions?

Last September, I had argued why “a war of arms and a peace of commerce cannot co-exist”. This is a follow up to that and events of the last 2 years sadly reinforce the point.

With Russia’s GDP (troublingly) growing by 3.6% in 2023, Putin is overseeing the fastest-growing G7 economy with unemployment at an all-time low and wages growing strongly despite high inflation.

Following Putin’s invasion of Ukraine 2 years ago, 3 dozen countries slapped economic sanctions on Russia. They were unprecedented in their scope for a target of its size. Russia quickly crossed Iran as the most sanctioned country and by end-2023 there were >18,000 active measures targeting Russian entities. Ships that carry Iranian oil are on the US list, as also Hamas’s leaders and financiers for Latin American drug lords. Sometimes individuals’ assets are frozen or entire banks are banned. Russia’s central-bank reserves in Europe (half its total) have been frozen, 80% of its banks face sanctions and 7 are locked out of SWIFT.

But the problem is, sanctions are NOT working well.

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