As Putin’s brutal war on Ukraine continues, the US, EU and UK have begun introducing harsh sanctions on Russia. Eoghan Ó Ceannabháin looks at the aim and impact of these sanctions and makes the case that they ought to be opposed on the basis that they will hurt ordinary people, that they will further inflame the situation and that they form part of Western imperialism’s push to further its own imperial interests.
On a CBS programme entitled “Punish Saddam” in May 1996, then US representative in the UN Madeleine Albright was interviewed about the harsh sanctions being imposed on Iraq, ostensibly to weaken the dictator Saddam Hussein. The interviewer put it to her that half a million children had died as a result of the sanctions and asked, “Is the price worth it?”
Albright gave the infamous reply:
“I think this is a very hard choice, but the price, we think the price is worth it.”
The United States had previously supported Saddam Hussein, even as he had used chemical weapons during the Iran-Iraq war. But after his invasion of Kuwait, he ceased to be considered an ally of the US, and instead, a brutal dictator that needed to be “punished”.
The sanctions did not punish Saddam Hussein. Instead, they brought misery, illness and starvation upon the ordinary people of Iraq. The total number of deaths as a result of the sanctions is disputed, but it is certain that hundreds of thousands of people died. Saddam Hussein’s dictatorship was not weakened – if anything, it became easier for him to crack down on opposition to his regime and tar it as a pro-US fifth column inside Iraq.
In the West now, our rulers are beating the drums of war. NATO, already with a massive military presence in Eastern Europe, is further reinforcing its eastern front. Germany has committed to spending €100 billion on its military, increasing its spending from around 1.5% of GDP to 2%. The EU has pledged massive military support to Ukraine. The Irish government is openly attacking neutrality and wants to increase its own spending from €`1.1 billion a year to €3 billion a year.
Along with the ramping up of militarisation, Western powers are introducing heavy sanctions on Russia. Some who might be queasy about sending troops or increasing military spending are in favour of the sanctions. Sinn Féin leader Mary Lou McDonald, for example, has called for “sanctions of such scale where there can be no doubt that Putin, and his oligarch supporters will pay a huge price for choosing the course of military conflict over dialogue and diplomacy.”
People who genuinely want to end this war rather than escalate it should be clear about what the aim and impact of these sanctions will be.
Firstly, the sanctions will not punish Putin, but will instead hit ordinary Russian people hardest. Already in Moscow and in other cities, there are reports of a run on the banks following the introduction of financial sanctions. The rouble fell almost 40% the day after the sanctions were announced.
A lot of the media reporting has been about the sanctions on Russian oligarchs – many of whom have been funneling money through the Irish Financial Services Institute and the City of London. These sanctions will cause a hindrance, but will not hurt the oligarchs in a big way. In fact, an amendment to a motion in the European Parliament noting that “most of the Russian oligarchs’ assets are hidden in European tax havens”, deploring “this lack of transparency which prevents the EU from targeting sanctions on oligarchs’ assets and thus putting real pressure on them and on Putin in turn”, and calling for “the EU to intensify its actions against European tax havens”, was defeated last night.
Fine Gael and Fianna Fáil MEPs voted against the amendment, presumably because targeting the Russian oligarchs might create the mechanisms to go after our own. Marx’s description of the ruling class as “a band of warring brothers” springs to mind.
Oil and gas have not been directly targeted by the sanctions either. Russia supplies about 40% of Europe’s natural gas and with widespread demand for gas elsewhere, these sanctions could hurt Europe as much if not more than Russia. However, we can expect an increase in calls to wean ourselves off Russian gas and onto North American LNG or nuclear power over the coming period.
The removal of Russian banks from the SWIFT system is where we will see some impact on the Russian economy. SWIFT allows the rapid transfer of money across borders but is not required for conventional domestic transactions. Russia will be able to guard against some of the effects of this. It has had its fledgling alternative, SPFS, in operation since 2017 and can also use China’s Cross-Border Interbank Payment System. There are at least 23 Russian banks connected to CIPS and more could make the switch, according to Asia Markets. There are also workarounds for moving finance without using SWIFT. Nevertheless, the SWIFT ban will have an immediate effect as trade between Russia and the rest of the world will become more difficult. This will make it more difficult to access foreign currency and could destabilise the banking system down the line.
However, the most important sanctions that will have a disastrous impact on the Russian economy are the restrictions on Russia’s central bank. Last Saturday’s statement from the European Commission committed to “imposing restrictive measures that will prevent the Russian Central Bank from deploying its international reserves in ways that undermine the impact of our sanctions”.
This sanction prevents the Bank of Russia from selling most of its reserves on international markets. The bank has been rapidly selling these in order to prop up the rouble and avoid market collapse. If it cannot continue to do this, a run on the banks and the collapse of the rouble may be inevitable.
The weaponisation of central banks has a precedent in Europe. The threat of a banking system collapse was held over the Irish government by the ECB in order to ensure that it would accept a bailout. Even more pressure was put on the Syriza government, who caved into the Troika, accepted bailout conditions and implemented austerity amid threats to end emergency support for Greece’s insolvent banks.
Now this financial weapon has been used, not to discipline an EU member state, but against a major imperialist rival and nuclear power.
This will cause misery for ordinary people in Russia, where 18 million people are already living in poverty. The media will play up the line that the sanctions are intended to hit “Putin and the oligarchs around him”. A similar claim was made by Madeleine Albright in the past, when she defended the sanctions on Iraq by saying they “were never against food and medicine”.
The reality will be very different. Ordinary people will suffer as the rouble tanks and the spending power of ordinary, struggling people plummets. Putin will point to the sanctions as further examples of NATO aggression and may ramp up his own belligerent actions in response – we are already seeing this with the agreement to station nuclear missiles in Belarus. Like Saddam Hussein did in Iraq, he will smear the courageous anti-war protesters in Russia as pro-NATO stooges and ramp up the repression against them.
It is with these people – the incredibly brave Russian protesters – that lies the hope of putting the pressure on Putin to withdraw. Sanctions will only punish these same people and further inflame the situation.
Secondly, the sanctions are utterly hypocritical. Another war is raging at the moment, which is not getting a fraction of the coverage of Russia’s war on Ukraine. Saudi Arabia’s war on Yemen has lasted 7 years already. 377,000 Yemenis, including at least 10,000 children have died as a result of the war so far and 4 million have been displaced. Instead of putting sanctions on Saudi Arabia, the US and EU continue to make economic deals with the regime. Last October, US President Biden announced a new arms contract with the Saudis worth $500 million.
Last month, Amnesty International published a report setting out how Israel is committing the crime of Apartheid, stating that, “massive seizures of Palestinian land and property, unlawful killings, forcible transfer, drastic movement restrictions, and the denial of nationality and citizenship to Palestinians are all components of a system which amounts to apartheid under international law”. Israel has launched aerial bombardments of Gaza in 2009, 2012, 2014 and 2021, resulting in the deaths of thousands of civilians.
If the Western powers actually cared about ending war and stopping the suffering of ordinary people, Saudi Arabia and Israel would have faced sanctions for these crimes against humanity. Instead, Western powers have continued to arm both states to the teeth. They have done so for precisely the same reason that they wish to sanction Russia – to further their own imperial interests.
This is the crux of the matter. It is impossible to separate the sanctions from the general effort to rev us up for war. We are seeing blanket, wall to wall media coverage of Putin’s war on Ukraine. What they are saying is correct: This is a brutal, imperialist war of aggression being waged by a despotic, autocratic thug.
What they are not saying, however, is that on the other side is another imperialist bloc, already with gallons of blood on its hands, that has expanded 800km eastwards since the fall of the Soviet Union. They do not say that the European Union has designs on a European army so that it can more effectively assert its dominance on the world stage. Nor do they say that the United States is seeking to reassert its authority after its bloody 20 year occupation and eventual defeat in Afghanistan. In particular, the United States wants to assert its leadership over Europe and rehabilitate its image, which has been severely tarnished by the disastrous “War On Terror”.
The call for sanctions is a call for an escalation of this inter-imperialist conflict. They are, in effect, an act of imperialist, economic warfare that bring us closer to all out military conflict between nuclear powers. We should oppose the sanctions and call for de-escalation, peace and diplomacy, rather than adding more fuel to the fire. Crucial to all of this will be the building of an international anti-war movement that can oppose both Putin and NATO.
