Economic Sanctions

Why in News?

Economic sanctions are frequently in the headlines because they remain a key tool of foreign policy in current global conflicts.

• Economic sanctions – These are measures imposed on a country, group, or individual to change their attitude or behaviour.
  • Sanctions cut off a country’s resources, money, and trade to pressure its leaders to change policies and to comply with specific demands.
• Different means of imposing sanctions –
  • Restriction of trade (banning imports and exports) & investments,
  • Freezing financial assets,
  • Limiting access to international banking systems,
  • Travel bans, or other measures that restrict economic activity.
• Common in international relations – Economic sanctions have been employed by states & international organisations such as the United Nations (UN) -
  • To address issues like human rights abuses, territorial disputes, or nuclear proliferation.
  • To create external pressure on countries having riotous internal affairs. Example: Cuban Revolution
• US sanctions on Cuba – In 1958, the USA imposed sanctions on Cuba during the overthrow of dictator Fulgencio Batista by Fidel Castro.
• Initially started as an arms-only prohibition, it later spread to other products.
• Reason – To ensure the granting of improved human rights and freedoms by Cuba’s current government.
• Impacts
• Economic sanction – It is the primary method through which sanctions exert pressure is by causing economic pain.
  • Example – Trade restrictions can cause a shortage of goods and services, higher prices, and inflation, leaving even the wealthy without resources.
• Diplomatic isolation – By reducing a country’s ability to form alliances or limit its influence in global affairs
  • This weakens its power internationally and blocks access to capital markets, limiting its ability to fund government projects.
• Dual Purpose of Sanctions
  • Direct impact – Impose economic pain to force behavioral change.
  • Symbolic message – Signal disapproval and reinforce international norms, even if practical effects are limited.
• Criticisms –
  • Ethical concerns – Civilians often suffer more than elites.
  • Humanitarian crises – Shortages of food, medicine, and essential services.
  • Unintended consequences – Targets may turn to adversarial nations (e.g., China or Russia) for support.
  • Strengthening regimes – May lead to the rallying of internal power to hold onto their administration.
    • For example, in North Korea, sanctions have helped to consolidate state power rather than weaken it.

Reference

The Hindu | Economic Sanctions