STOLYPIN: Sanctions have evident bite but little evident strategy

STOLYPIN: Sanctions have evident bite but little evident strategy
Pyotr Stolypin is famous for his reforms to Imperial Russia's agricultural sector.
By By Mark Galeotti of the Institute of International Relations Prague April 25, 2018

Sanctions must bark, as well as bite. Just as a bark combines a flash of teeth and a clear message, so too sanctions ought to be driven not simply by moral outrage, and even less so by the assumption that doing anything is better than doing nothing, but by a careful marriage of means and ends.

Although the initial, dramatic effect of the most recent bout of US sanctions was later partially reduced as markets corrected themselves in their usual way, Oleg Deripaska is generally seen as — in economic terms — as a dead man walking, Rusal's warehouses are overflowing with unsold aluminium, and Russia's bond offerings are looking appropriately toxic in the new, post-Skripal order.

So these sanctions, the fear of more, and the way they stretch out well beyond the US government's immediate jurisdiction, have all clearly had a distinct effect. But are they effective? The answer to that question depends on the intended impact, and that is harder to assess. There may be a clear strategy in the minds of those framing policy in Washington, but frankly there appears to be no consensus there, let alone across the West as a whole.

What are sanctions good for?

One of the problems is that sanctions can have four purposes, even if these often overlap and complement each other, and too often they are getting confused.

They may be used in an attempt to pressure a country into specific action, with an explicit or implicit promise that they will be listed. The European sanctions relating to Ukraine, for example, are based on the annexation of Crimea and non-compliance with the Minsk Accords, respectively. If Moscow demonstrates a more productive stance on the Donbas or, distinctly less likely, withdraws from the Crimea, then they may be lifted or lightened.

Alternatively, sanctions are an instrument of deterrence: you did something we don’t like, so we hit back at you. If you do it again, we’ll hit you again, and maybe harder. The focus on US election interference in public statements strongly suggests that this is a primary driver behind the latest US sanctions, and the key difference is that they offer no clear route to their lifting, only the avoidance of more.

Sanctions can be deployed even more aggressively in the pursuit of regime change or disruption. Figures close to the Russian leadership certainly affect to believe this is the West’s real intent, talking of “economic warfare” and, in one especially over-excitable case, “a neutron bomb aimed at the Kremlin.”

Finally, sanctions can primarily be envisaged as tools of domestic policy. One of the primary rationales behind enacting measures to push Russian kleptocrats and their dirty money out of the UK, for example, is simply as part of a wider cleansing of one of the world’s great money laundries, the City of London.

While it is certainly true that these broad roles can overlap, the point is that there needs to be a clear sense of a plausible end-state towards which the sanctions are meant to be driving. Just as importantly, that needs to be communicated. Most sanctions are in essence forms of signalling in international relations, but without indicating what their purpose may be, it is hard to maintain a multi-national coalition, and harder yet meaningfully to affect Russian policy. 

Building a sanctions regime that works

Put simply, the Western sanctions regime needs to be coherent, purposeful, and creative. 

They cannot simply be driven by what individual countries can do — even ones as powerful as the US — and less yet by internal struggles over policy within a government. They must flow from a consensus of sorts, at least amongst key partners, lest they become resented and resisted as “US imperialism,” already a theme in Russian propaganda that does find some attentive audiences.

More importantly, they have to have clear, specific and credible aims, and with them a roadmap for how they can be lifted. Simply punishing Putin’s Russia for being what it is, while appealing to some in the West, is unlikely to lead to real change. Putin has too much invested in his geopolitical crusade to “make Russia great again,” and the rich Russians in the immediate firing line lack the capacity to challenge or coerce him. The days when oligarchs could dictate policy have long passed. Today they are best considered the state's stewards of the economy, rich and free so long as the state — and more powerful peers — allow them to be.

Besides, sanctions are also prone to unintended consequences. Driving rich Russians and their questionable money out of London and the other financial capitals of choice perversely may actually benefit Putin, at least in the short term. He has been pushing “de-offshorisation,” the repatriation of those funds which fled Russia’s capricious courts and rule of lawlessness. How thoughtful of the West to help. Likewise, oligarchs driven home by sanctions and hobbled by their restrictions become all the more dependent on government tolerance and largesse.

Of course, if the aim is truly to break the system, then this may have its virtues. The more the state has to bail out the very people who embezzled and exploited it, the less money there is left over. And if some are protected and others not, then this generates inevitable tensions and divisions. The oligarchs may not run the Kremlin, but the Kremlin needs at least a reasonable contingent of them to manage its economy.

If recent years have taught the West anything, though, it is that regime change is easier to trigger than manage. As things currently stand, the likelihood is that Putin’s departure from the Kremlin will usher in a time of greater pragmatism. However, more overt efforts to hasten that process or attack his system not only empower his paranoiac and defensive legitimating myth that Russia is under siege, they make it more likely he either will not feel he can step down or will seek an even more hawkish successor. How does President Patrushev sound?

None of this means sanctions are not crucial instruments of the current Russia-West geopolitical struggle. However, they must be applied collectively and with a clear sense of their intent. They should also be creative: the aim ought not simply be to do what is easy, but what is effective; what, in other words, is most likely to affect Putin’s calculi. Expelling oligarchs, for example, could be combined with measures to undercut the state’s “beleaguered fortress” narrative by reaching out to ordinary Russians with visa free travel and scholarships. Asymmetric measures will often be more effective than easily predictable reciprocal measures; responding to cyberattacks by, for example, giving Georgia $10mn in counter-intelligence aid or offering Belarus a favourable trade deal might help further undermine the Kremlin’s assumptions that it can always game Western moves. 

Sanctions are preferable to the other instruments of coercion, containment and retaliation. But effect and effectiveness are not always one and the same.

Mark Galeotti is a senior researcher at the Institute of International Relations Prague and the director of Mayak Intelligence. He blogs at In Moscow’s Shadows and tweets as @MarkGaleotti.

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