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PURSE POWER: Economic Weapons for Political and Social Change / Vol. 82, No. 4 (Winter 2015)

Arien Mack, Editor

This issue explores the use of economic power as a political weapon to effect political or policy changes, primarily but not only when the actors are states. More than ever, sanctions are being used as a major weapon in the arsenal available to nations and international bodies to force political change.

In the 1990s, there was considerable criticism regarding the humanitarian impact of economic sanctions. In response, there were proposals for pre-sanctions assessment, as well as ongoing monitoring. There was also a movement to develop targeted sanctions (“smart sanctions"). Targeted sanctions became the dominant development within the field of economic sanctions, and they are seen as broadly successful. Targeted sanctions are, in fact, problematic in many regards. However, the discussion of monitoring and assessment has been largely marginalized. There is a need to revisit the role of monitoring and assessment in reducing the humanitarian impact of sanctions.

Economic sanctions have been effective in a number of cases in which they have been imposed solely for the purpose of promoting human rights and they have been sustained for substantial periods and modified from time to time to reflect changes in the human rights situation in the target countries. The essay cites Myanmar, South Africa and Poland as countries in which sanctions met these criteria. It also cites Cuba and China as targets of sanctions that did not meet those criteria and where countries failed to promote human rights.

Since the seizure of the American Embassy in Tehran more than 36 years ago, economic sanctions have been at the heart of Washington's strategy for dealing with Iran. For most of that period, sanctions carried more symbolic than strategic value. However, sanctions frequently provoke an escalatory logic that has a way of inflating objectives.

The campaign for divestment from fossil fuels and investment in solutions to climate change has, in only four years, spread from a small number of college campuses in the United States to around the world. Colleges, public and private foundations, pension funds, and even some of the world’s largest investors, have committed to some form of divestment. While the campaign has already influenced the conversation around climate and the worlds markets, there are conflicts in some of the strategies the campaign is using, not least its connection to the argument that divesting will improve portfolio returns. Analysis of these challenges, as well as a comparison to past divestment movements, helps to inform the effectiveness of this campaign and the possibilities for other similar efforts.

The embargo against Cuba is the oldest and most comprehensive U.S. economic sanctions regime against any country in the world. It comprises a complex patchwork of laws and presidential determinations imposed over half a century. Presidents have tightened or relaxed it to suit their own strategy—some seeking to punish the Cuban regime by economic pressure, other seeking to improve relations by resorting to soft power rather than hard. The impact of U.S. sanctions has also varied, at times inflicting serious harm on the Cuban economy, and at times being merely as an expensive annoyance. But the embargo has never been effective at forcing Cuba's revolutionary regime out of power or bending it to Washington's will.

Since Russia annexed Crimea from Ukraine against international laws in 2014, the United States and European Union have imposed sanctions to punish Vladimir Putin’s Kremlin. The article addresses a debate as to whether these sanctions have been effective and argues that they have been. The seeming lack of progress—Crimea remains under the Russian control—comes from the false expectations of an immediate success. It also has been largely unnoticed that sanctions have worked in conjunction with additional legal means against Russia’s other infringements on international laws such as gas price gouging, violating shareholders’ rights, or illegally appropriating industrial and business infrastructures outside of the country.

Advocacy groups campaigning in the name of enhancing human rights of crisis-riddle resource-rich states claim to be spearheading international conflict resolution efforts. Their campaigns consisting of oversimplified analyses and approaches contrast sharply with, and ultimately undermine multilateral consensus policies, while their unilateral media and advertisement campaigns are highly effective in attracting million dollar contributions from some Western development communities. While not necessarily their purpose, their business practices further the promotion of Western values at the expense of international consensus building and sustainable solutions for the victim communities they purport to assist.

Over the past twenty years, divestment has become a standard tactic for transnational campaigns: activists urge institutional investors to sell their holdings in immoral business activities. But what do activists hope to achieve? Drawing parallels between two successful examples -- the American anti-apartheid movement and today’s ‘fossil-free’ divestment campaign --, I suggest that activists turn to the tactic not in the hope of lowering share prices, but rather to provoke local discussions about transnational issues, to raise moral questions, and to mobilize political pressure.


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