Economic Sanctions Against Russia Flop

Eric Zuesse

The first comprehensive study of anti-Russia sanctions shows they hit EU much more than Russia.

Did U.S. President Barack Obama create the anti-Russia sanctions in order to weaken the EU in its competition against America? If so, the policy has been a huge success — it has enormously damaged the EU’s economy. But, if Russia was the actual target — as Obama claimed — then it’s been a total flop: It has produced $100 billion loss to the EU, thus far — almost twice as much as the $55 billion total hit to Russia, and the hit to Russia might be even less than that, maybe even zero, because the harms to Russia included the harms from the plunging oil-prices, which weren’t at all due to the sanctions. Furthermore, the sanctions strongly helped Russia’s economy, in ways that don’t yet show up in the economic data but that constitute long-delayed reforms whose pay-offs will start only during the years to come. Washington’s economic sanctions against Russia could thus end up producing a net plus for Russia, on a long-term basis.

The deal that U.S. Secretary of State John Kerry culminated with King Saud on 11 September 2014(after his having started those negotiations on 27 June 2014) to flood the market with oil to bring the oil price down and so harm Russia, which is a giant oil&gas-exporter, has hit Russia very hard, costing the Russian economy perhaps all of the $55 billion hit to Russia’s economy, measured thus far.

These figures come from the first-ever comprehensive study of the effects of the sanctions, a study which also estimates the negative effects upon human rights (this Special Reporteur’s chief mandate), but the cost-figures cited here, are entirely economic, not about “rights” at all (which are separately dealt with in the same report).

The study was issued, on September 13th, by the staff of Algeria’s, Idriss Jazairy, who is the U.N.’s Special Rapporteur on the Negative Impact of the Unilateral Coercive Measures. His mandate recognizes economic sanctions as being pre-invasion acts of war, and so as being threats to world peace, an up-ramp toward physical warfare. Mr. Jazairy has Masters degrees from both Oxford and Harvard, and is personally grounded in a democratic national legal tradition: Algeria’s Constitution explicitly is democratic: Its Article 6 is titled “Popular Sovereignty” and unambiguously states, in its Sovereignty Clause, which is the most important clause in any nation’s Constitution: “(1) The People are the source of any power. (2) The national sovereignty belongs exclusively to the People.”

However, the findings by Jazairy’s team have nonetheless produced criticisms against him and his team (not against the methodology or the economic statistics upon which the study was based) by neoconservatives such as Israel’s “U.N. Watch.” The U.S. Government’s “Radio Free Europe,” then cited “U.N. Watch” as an authority against “Russia’s state-controlled Sputnik news agency” for Sputnik’s having reported the findings. U.S. (and its allies’) ‘news’media had been silent about the findings, until Jazairy issued a response on September 15th to those neoconservatives’ objections, by headlining “UN Special Rapporteur rejects accusations of Russian influence on sanctions findings”.

At the time of the report’s release, on September 13th, there were only two news-reports about it, both from Russia: one on Sputnik radio, and another (the only report that was accessible to Western audiences), which appeared at rt-dot-com, which headlined “Anti-Russian sanctions cost Europe $100bn – UN Special Rapporteur”. Other than that news-story at RT, there was no coverage of this U.N. report, at all, in the West.

It should be noted that the U.N.’s own press-operation does everything possible to block the public from having access to the U.N’s reports, so that even when Mr. Jazairy’s office issued that press-release responding to the neoconservatives’ criticisms, and he wrote there “I stand ready to address any questions regarding the legal or factual findings in my report,” that crucial link was to something inaccessible, instead of to the publicly accessible online link to his report.

Until the present moment, there has been no press-report anywhere that links to the publicly accessible web-page, or that quotes more than just a few words from Jazairy’s report; and, so, here that is — the core of his team’s findings (and boldfacing the passages that I consider to be the most important, so that the boldfaced parts constitute a summary of the study’s findings):

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