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95 Foreign Aff. 114 (2016)
Not-So-Smart Sanctions: The Failure of Western Restrictions against Russia

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Not-So-Smart Sanctions


The Failure of Western Restrictions
Against Russia

Emma Ashford

  fter Russia seized Crimea from Ukraine in March 2014, the

        Obama administration responded with what has become
        the go-to foreign policy tool these days: targeted sanctions.
The United States placed asset freezes and travel bans on more than
one hundred people, mostly cronies of Russian President Vladimir
Putin, and the EU targeted almost a hundred more. The amounts
involved have been massive: Bank Rossiya, the Kremlin's preferred
bank, had $572 million frozen in the months after the sanctions were
rolled out. Then, in July 2014, when Malaysia Airlines Flight 17 was
shot down over eastern Ukraine allegedly by Russian-backed forces,
Washington responded with more severe sanctions aimed at key
sectors of the Russian economy, including arms manufacturers, banks,
and state firms. In an effort to hit the Kremlin where it hurts, the
measures inhibit financing and technology transfers to Russian oil
and gas companies, which supply over half of state revenues.
  Considering the dire state of Russia's economy, these sanctions
might appear to be working. The value of the ruble has fallen by
76 percent against the dollar since the restrictions were imposed, and
inflation for consumer goods hit 16 percent in 2015. That same year,
the International Monetary Fund estimated, Russia's GDP was to shrink
by more than three percent.
  In fact, however, Western policymakers got lucky: the sanctions
coincided with the collapse of global oil prices, worsening, but not
causing, Russia's economic decline. The ruble's exchange rate has tracked
global oil prices more closely than any new sanctions, and many of the
actions taken by the Russian government, including the slashing of
EMMA ASHFORD is a Visiting Research Fellow at the Cato Institute. Follow her on Twitter
@EmmaMAshford.


114 FOREIGN AFFAIRS

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