Economic Warfare: An International Evaluation
Cuba, Iraq, and Russia... Oh My!
One fascinating aspect of the punitive use of tariffs and sanctions is the potential for unintended consequences. While these measures are often implemented to harm the target country's government or leaders, they can inadvertently affect ordinary people and businesses within the targeted nation, fostering resentment and anger towards the countries imposing the sanctions or tariffs, further deepening political and economic divisions.
In this article, we will explore several real-world examples of economic warfare, beginning with the Cuban Embargo (United States vs. Cuba). The United States imposed a comprehensive trade embargo on Cuba in 1960, aiming to pressure the Cuban government led by Fidel Castro. However, the embargo had legitimate causes for concern, as it not only culturally isolated the population but also exacerbated their descent into poverty, fueling anti-American sentiment.
With limited access to American goods, technologies, and cultural influences, Cubans became increasingly cut off from the international community. This isolation affected various aspects of their society, from the arts and entertainment to educational and scientific exchange. As a result, ordinary Cubans were deprived of exposure to the rapidly evolving international culture, especially due to the limited access to the internet.
In this article I’m going to explore a few real-world examples of economic warfare in action, starting with the Cuban Embargo (United States vs. Cuba). The United States imposed a comprehensive trade embargo on Cuba in 1960, with the intention of pressuring the Cuban government led by Fidel Castro. However, the embargo served a legitimate cause of anti-American sentiment in the country as it ultimately served to culturally isolate the population while leading them further into the trenches of poverty. The embargo lead to shortages across a variety of industries, particularly in the healthcare sector, impacting the availability of medicine and medical supplies for ordinary Cubans.
Another example of economic warfare fraught with unintended problems is the Iraq Sanctions (United Nations vs. Iraq). In the 1990s, the United Nations imposed economic sanctions on Iraq following its invasion of Kuwait. The sanctions were primarily intended to weaken Saddam Hussein's regime. However, the impact of the sanctions on the Iraqi people was devastating and is still being felt today. The sanctions led to widespread poverty, malnutrition, and a breakdown of basic infrastructure such as healthcare and sanitation. Interestingly, it was the UN that initially supported Saddam's regime, adding an additional layer of complexity to the situation.
The re-imposed sanctions after the United States' withdrawal from the Iran nuclear deal in 2018 have had unintended consequences for ordinary Iranians. These sanctions encompass various sectors such as energy, shipping, finance, and banking, limiting Iran's access to global financial systems and making international trade and foreign investments challenging. Consequently, Iranians have experienced a decrease in purchasing power and inflation. Additionally, sanctions on Iran's oil and energy sector have significantly impacted the country's economy, leading to a decline in government revenues and limited resources for social welfare programs. Despite exemptions for humanitarian aid, the complex financial mechanisms and restrictions associated with these exemptions have hindered the efficient flow of goods, making it difficult for ordinary Iranians to access essential items, including medicine and medical supplies.
It is worth noting that the government often imposes such sanctions in hopes that the populations of the targeted countries will become desperate enough to revolt. However, this expectation is unreasonable and unrealistic in the modern world. The destructive capabilities of modern governments far surpass the idealized image of revolution held by many Americans, still intoxicated with the idea of red-coats and muskets.
Russia has also been subject to a number of economic sanctions imposed by the United States and EU since 2014 in response to Russia's annexation of Crimea and its involvement in the conflict in eastern Ukraine, targeting various sectors of their economy, specifically finance, energy, and defense. The sanctions have restricted access to international financial markets for Russian companies and individuals, limited foreign investment in Russia, and banned exports of certain goods and technologies to Russia. However, the Russian government has implemented measures to mitigate the impact of the sanctions. In fact, Russia may have written the playbook for surviving Western economic attacks.
In response to the restrictions on Western markets, Russia’s financial center implemented fiscal policies aimed at stimulating growth, supporting key industries, and protecting the welfare of its citizens. Russia has actively sought new trade relationships with countries in Asia, the Middle East, and Latin America. By expanding its trade horizons, Russia has been able to find alternative markets for its goods and subsequently reduce reliance on Western economies for the entire globe. The sanctions also stimulated the development of import substitution policies, which aimed to replace imported goods with domestically produced alternatives. As Russia took steps toward self-sufficiency and reduced dependence on foreign imports, it saw industrial growth in agriculture, manufacturing, and technology.
It is crucial to recognize that economic sanctions, though sometimes seen as a tool of leverage, can contribute to a vicious cycle of hostility and division. The world continues to evolve, and so should our approach to international relations, aiming for cooperation, empathy, and a deeper understanding of the interconnectedness of global economies and societies. By embracing the shift towards a multipolar world, the United States and European Union have the opportunity to foster a more peaceful and prosperous global landscape, prioritizing the well-being of all humanity and sparing them from the devastating consequences of war and hate.
-The Shultz Report by M. Shultz