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Financial war
Material posted: Publication date: 01-05-2014

When diplomacy failed, wars have usually been inevitable, being a continuation of politics by other means. Today, when methods of persuasion don't work, big powers as the first measures to turn economic battles. Sanctions take place between the disordered condemnations and air strikes. They are difficult to organize, and the consequences from them are not always clear and understandable. They can hurt innocent people and legitimate operating companies. The Russian takeover of Crimea and threats against Eastern Ukraine is subjected to the effectiveness of sanctions to the next test.

The situation

Financial warfare as an alternative to military force in the new century is used more often. Since 2000, the United States, European Union, Australia, Canada, Japan, Israel, Russia, South Korea and international organizations have used sanctions at least 20 cases against a variety of States, including Myanmar, Sudan and Syria. No modern state applied economic cudgel more often than the U.S., which in the XX century more than 110 times restricted the import, export, investing and other financial transactions in an attempt to change a particular policy, to put an end to programs on creation of weapons or to overthrow the government. The U.S. Treasury Department has become a significant player in the field of national security after the terrorist attacks of September 11, 2001. His self-styled "guerrillas in grey suits" implement 37 programmes of sanctions, aimed at States, individuals, terrorist organizations and criminal groups in about 20 countries. Here and arrest of assets of Mexican drug lords and Russian oligarchs, and prohibitions on doing business with Iran and North Korea. Introduced in 2010, the U.S. and EU sanctions against Iran, which is shared by all countries importing Iranian oil, has created a powerful pressure on the country's economy, undermined its currency, caused inflation and helped Hassan Rouhani (Hasan Rouhani) win in June of last year on elections, when he promised to weaken the sanctions regime. A few months later, Iran came back to the table for nuclear talks and went to let the small but historic concessions.


The first documented fact of economic pressure for political ends dates back to the times of Ancient Greece (in 432 BC, the city-state of Megara banned trade with Athens). The U.S. Treasury first employed sanctions against Britain before the war of 1812. Woodrow Wilson (Woodrow Wilson) became the first modern leader, called for financial pressure as an alternative to military action. The most effective sanctions are those that impose several countries. The global boycott of South Africa in the 1980-ies in connection with its policy of apartheid led to elections, which brought to power the black majority. The worst case of unintended consequences can be considered the American oil embargo against Japan, which caused a chain of events that led eventually to the attack on pearl Harbor. Sanctions against Saddam Hussein in Iraq were criticized as toothless, indiscriminate and immoral. But looking back, realize that they deprived him of his means to build weapons of mass destruction.


The debate about what kind of sanctions may deter Russia from invading the Ukraine, show how difficult it is to apply them with a high degree of efficiency. Trade relations of the EU, including its dependence on Russian gas, cause the rejection of broad trade embargo, which can hurt American and European companies. In our days, punitive measures are used point, being directed to individuals, companies or institutions. The exception is made for food and humanitarian supplies. The hardest thing was with Cuba and North Korea, where operating for over half a century American embargo failed to lead to regime change and policy in these countries. Democratic and quasi-democratic States that are indifferent to international public opinion, and which depend on global trade and Finance, react in the first place. But authoritarian regimes often manifest intransigence. As for Russia, here the international community can use the largest caliber is to restrict access to credit card networks and to the global banking system. This will force Russian President Vladimir Putin sweat a lot. But while the U.S. and EU refrained from a full-scale economic war.

Source: InoSMI


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