Trade sanctions against 'defiant' countries may not be popular move

Jeffrey D. Sachs, Professor of economics, Director of the Earth Institute, Columbia University, Project Syndicate

The U.S. Congress has voted almost unanimously (418 to 2 in the House of Representatives and 94 to 1 in the Senate) to tighten trade and financial sanctions against Myanmar, whose despotic regime harasses and repeatedly imprisons the country's rightful leader, Aung San Suu Kyi. She won the presidential election in 1990 but the military prevented her from taking power.

But sanctions are the wrong approach, for international marginalization hurts ordinary citizens far more than it hurts dictatorial regimes. It's time to curtail the use of economic sanctions and to make them better targeted at despots.

The most famous sanctions in recent history were those imposed on South Africa during the apartheid era. Much of the world community stopped trading with South Africa, and stopped making investments in South African-based enterprises. Those sanctions did, it seems, help speed the demise of that barbaric system. But one great success does not negate the many failures. Moreover, it is quite possible that the world community could have supported the overthrow of apartheid in other ways.

Of course, sanctions can be effective in hurting the economy of the target country. Economic development in today's global economy depends on each country being integrated into the worldwide network of production, trade, and investment. A national economy that is excluded by sanctions is likely to stagnate or even collapse.

Thus, the South African economy experienced an absolute decline in per capita output during the years of widespread sanctions. But sanctions were not the only reason for decline. Political unrest also devastated the economy, as did a fall in world gold prices that coincided with the anti-apartheid movement in the final years. Still, South Africa was hurt badly by sanctions, and the same has been true for many other countries.

Cuba bears a heavy economic burden today not only as a result of its own internal economic mistakes but also because of the barriers to trade and investment imposed by the U.S. since the 1960's. Haiti went into an economic tailspin when America imposed sanctions in the 1990's, ostensibly to re-establish democracy. Even today, the U.S. blocks aid for Haiti because some right-wing U.S. Congressmen are intent on toppling President Aristide, whom they abhor.

Iraq and North Korea have likewise been battered by sanctions. In Iraq during the 1990's, millions of children suffered repeated illnesses and vast numbers died because international sanctions contributed to ruining the country's economy. North Korea's economy utterly collapsed in the 1990's, leading to widespread famine. Once again, this results from a combination of North Korea's political despotism, atrocious economic policy, and international sanctions.

Myanmar has already paid an extremely high price for its isolation. International organizations have cut back or eliminated their work in the country, and much bilateral foreign aid has been eliminated, too. One result is that HIV/AIDS has run rampant, and the country has received almost no help in getting the epidemic under control. Myanmar's HIV/AIDS crisis is now by far Southeast Asia's worst.

Although sanctions clearly create suffering in many places, how often have they achieved the desired goal? In Myanmar, Iraq, North Korea, and Cuba, despotic regimes not only survived the imposition of sanctions, but became more despotic. These regimes were able to blame foreigners for domestic hardships, even when it was their own policy mistakes and human rights abuses that caused the crises.

Indeed, sanctions weaken an economy and public health, but do not necessarily make it more likely that a despotic regime will collapse. Sanctions purportedly undermine the regime by causing widespread unrest and by reducing the government's power base and tax collections. But sanctions also weaken the ability of the private sector to finance an opposition, tend to cut off the domestic opposition from international sources of support, and reduce, rather than increase, international awareness of the abuses taking place.

Some additional effects are even more pernicious. When legal means of business are outlawed, illegal means become more attractive. Many countries under sanction, such as Myanmar, become sources of global illegal trafficking in drugs, arms, money laundering, and forced labor. Drug trafficking or other illegal activities can overtake the whole government, turning it from despotism to international organized crime.

Does this mean that the world should do nothing about despotic regimes? There is no easy answer, but to the extent that it is possible to weaken a government without weakening an economy, such steps should be taken. For example, so-called "smart sanctions" focus more narrowly on the political leadership.

Smart sanctions include denial of international travel privileges to despots and their families, and subjecting those despots to the risk of international prosecution. Leaders can thus be made prisoners in their own countries. Smart sanctions can also specifically target the trade in military goods, cutting off despotic regimes' armed forces. Moreover, foreign aid can be shifted away from government towards non-governmental organizations, strengthening the civil societies in such countries.

It is easy to vote against Mynamar's government, but it is harder to foster political change. Starving Myanmar's economy is unlikely to help, but it is certain to deepen the suffering of its people. Of course, countries that embrace the use of sanctions do not intend this, but that does not lessen their responsibility for the outcome.