Better Sanctions on Russia are Needed
While the EU-US-led financial and trade measures initially seemed impressive, they failed to have the crippling economic effect that the West was hoping for. To leverage the full potential of sanctions, participants must overcome their coordination problems and impose targeted export embargoes.
CAMBRIDGE – The legendary Prussian field marshal Helmuth von Moltke the Elder famously remarked that no battle plan survives first contact with the enemy. The implication was that commanders who win wars are not necessarily those with the best initial plans, but those who quickly adapt to new information and to conditions on the ground.
The Ukrainian military’s brilliant counteroffensive, which has forced Russian troops to retreat in eastern and southern Ukraine, is a case in point. A less brilliant example is the West’s effort to use trade and financial sanctions to crimp Russia’s ability to wage war. Here, things have not gone according to plan, and now it is clear that the strategy must be adjusted. To this end, we have identified several steps that would make the Western sanctions regime more effective.
That regime’s opening salvo looked impressive. Immediately after the invasion, the United States, the European Union, and their allies froze the bulk of Russia’s international reserves, excluded most of its banks from the SWIFT international payment system, and banned the sale of many goods to Russia (including aircraft parts and crucial weapons systems). They also clumsily tried to curtail Russia’s ability to fund itself through oil and gas exports: the US imposed an immediate oil embargo, while the EU announced it would ban most Russian oil imports within 6-8 months.