Yves here. Needless to say, this article gives a very different view of the source of the rise in hunger and coming starvation than you see in the so-called collective West. Paraphrasing James Carville, “It’s the sanctions, stupid.”
By Anis Chowdhury, Adjunct Professor at Western Sydney University and University of New South Wales (Australia), who held senior United Nations positions in New York and Bangkok and Jomo Kwame Sundaram, a former economics professor, who was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought. Originally published at Jomo Kwame Sundaram’s website
US and allied economic sanctions against Russia for its illegal invasion of Ukraine have not achieved their declared objectives. Instead, they are worsening economic stagnation and inflation worldwide. Worse, they are exacerbating hunger, especially in Africa.
Sanctions Cut Both Ways
Unless approved by the UN Security Council (UNSC), sanctions are not authorized by international law. With Russia’s veto in the UNSC, unilateral sanctions by the US and its allies have surged following the Ukraine invasion.
During 1950-2016, ‘comprehensive’ trade sanctions have cut bilateral trade between sanctioning countries and their victims by 77% on average. The US has imposed more sanctions regimes, and for longer periods, than any other country.
Unilateral imposition of sanctions has accelerated over the past 15 years. During 1990-2005, the US imposed about a third of sanctions regimes around the world, with the European Union (EU) also significant.
The US has increased using sanctions since 2016, imposing them on more than 1,000 entities or individuals yearly, on average, from 2016 to 2020 – nearly 80% more than in 2008-2015. The one-term Trump administration raised the US share of all new sanctions to almost half from a third before.
During January-May 2022, 75 countries implemented 19,268 restrictive trade measures. Such measures on food and fertilizers (85%) greatly exceed those on raw materials and fuels (15%). Unsurprisingly, the world now faces less supplies and higher prices for fuel and food.
Monetary authorities have been raising interest rates to curb inflation, but such efforts do not address the main causes of higher prices now. Worse, they are likely to deepen and prolong stagnation, increasing the likelihood of ‘stagflation’.
Sanctions were supposed to bring Russia to its knees. But less than three months after the rouble plunged, its exchange rate is back to pre-war levels, rising from the ‘rouble rubble’ promised by Western economic warmongers. With enough public support, the Russian regime is in no hurry to submit to sanctions.
Sanctions Pushing Up Food Prices
War and sanctions are now the main drivers of increased food insecurity. Russia and Ukraine produce almost a third of world wheat exports, nearly 20% of corn (maize) exports and close to 80% of sunflower seed products, including oil. Related Black Sea shipping blockades have helped keep Russian exports down.
All these have driven up world prices for grain and oilseeds, raising food costs for all. As of 19 May, the Agricultural Price Index was up 42% from January 2021, with wheat prices 91% higher and corn up 55%.
The World Bank’s April 2022 Commodity Markets Outlook notes the war has changed world production, trade and consumption. It expects prices to be historically high, at least through 2024, worsening food insecurity and inflation.
Western bans on Russian oil have sharply increased energy prices. Both Russia and its ally, Belarus – also hit by economic sanctions – are major suppliers of agricultural fertilizers – including 38% of potassic fertilizers, 17% of compound fertilizers, and 15% of nitrogenous fertilizers.
Fertilizer prices surged in March, up nearly 20% from two months before, and almost three times higher than in March 2021! Less supplies at higher prices will set back agricultural production for years.
With food agriculture less sustainable, e.g., due to global warming, sanctions are further reducing output and incomes, besides raising food prices in the short and longer term.
Sanctions Hurt Poor Most
Even when supposedly targeted, sanctions are blunt instruments, often generating unintended consequences, sometimes contrary to those intended. Hence, sanctions typically fail to achieve their stated objectives.
Many poor and food insecure countries are major wheat importers from Russia and Ukraine. The duo provided 90% of Somalia’s imports, 80% of the Democratic Republic of Congo’s, and about 40% of both Yemen’s and Ethiopia’s.
It appears the financial blockade on Russia has hurt its smaller and more vulnerable Central Asian neighbours more: 4.5 million from Uzbekistan, 2.4 million from Tajikistan, and almost a million from Kyrgyzstan work in Russia. Difficulties sending remittances cause much hardship to their families at home.
Although not their declared intent, US measures during 1982–2011 hurt the poor more. Poverty levels in sanctioned countries have been 3.8 percentage points higher than in similar countries.
Sanctions also hurt children and other disadvantaged groups much more. Research in 69 countries found sanctions lowered infant weight and increased the likelihood of death before age three. Unsurprisingly, economic sanctions violate the UN Convention on the Rights of Children.
A study of 98 less developed and newly industrialized countries found life expectancy in affected countries reduced by about 3.5 months for every additional year under UNSC sanctions. Thus, an average five-year episode of UNSC approved sanctions reduced life expectancy by 1.2–1.4 years.
World Hunger Rising
As polemical recriminations between Russia and the US-led coalition intensify over rising food and fuel prices, the world is racing to an “apocalyptic” human “catastrophe”. Higher prices, prolonged shortages and recessions may trigger political upheavals, or worse.
The UN Secretary-General has emphasized, “We need to ensure a steady flow in food and energies through open markets by lifting all unnecessary export restrictions, directing surpluses and reserves to those in need and keeping a lead on food prices to curb market volatility”.
Despite declining World Bank poverty numbers, the number of undernourished has risen from 643 million in 2013 to 768 million in 2020. Up to 811 million people are chronically hungry, while those facing ‘acute food insecurity’ have more than doubled since 2019 from 135 million to 276 million.
With the onset of the Covid-19 pandemic, OXFAM warned, the “hunger virus” could prove even more deadly. The pandemic has since pushed tens of millions into food insecurity.
In 2021, before the Ukraine war, 193 million people in 53 countries were deemed to be facing ‘food crisis or worse’. With the war and sanctions, 83 million – or 43% – more are expected to be victims by the end of 2022.
Economic sanctions are the modern equivalent of ancient sieges, trying to starve populations into submission. The devastating impacts of sieges on access to food, health and other basic services are well-known.
Sieges are illegal under international humanitarian law. The UNSC has unanimously adopted resolutions demanding the immediate lifting of sieges, e.g., its 2014 Resolution 2139 against civilian populations in Syria.
But veto-wielding permanent Council members are responsible for invading Ukraine and unilaterally imposing sanctions. Hence, the UNSC will typically not act on the impact of sanctions on billions of innocent civilians. No one seems likely to protect them against sanctions, today’s weapons of mass starvation.
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This comment isn’t as far off track (I hope) as it might seem.
Remembering Mao’s great leap forward and the following man made famine because ideologues were in charge instead of people who, you know, understood how things work in the real world, things like agriculture and distribution.
Now we have the neoliberal’s great reset, complete with sanctions on a resource rich country they’d love to get their hands on for free, imo. /oy
If western leaders did not worry about throwing third world countries to the wolves by using their purchasing power to grab all the medical supplies and vaccines that they could during the first years of the Pandemic, I doubt that they will worry if those same countries will be short of food and energy. After all, what can they do about it? Hop aboard a boat and emigrate? Oh, wait.
I think that’s called blowback, but TPTB never seem to worry about that. Yet I increasingly think it’s because blowback only comes up in conversation after the 3rd martini or tumbler of Scotch and at that point who cares.
The whole world is as tightly coupled as an overtightened cats cradle spiderweb snare drum.
As to the sanctions being “illegal”, I suppose they are as “illegal” as the Russian invasion itself was.
“Illegality” will abound, more and more and more.
“Unless approved by the UN Security Council (UNSC), sanctions are not authorized by international law. With Russia’s veto in the UNSC, unilateral sanctions by the US and its allies have surged following the Ukraine invasion.”
That is simpy not true. The UN Charter describes how UN sanctions are approved. There is no prohibition on a nation applying sanctions on its own. International law is silent on this, but national sanctions have a long history.
The closing of the Ukrainain ports, the uncertainty about how to pay for food through SWIFT transfers and the unanticipated shortage of shipping caused by the longer transit time ofor all pruducts are the causes. International pressure seems to be working to open the ports (both sides have played games on this one). On the shipping issue please see:
https://www.hellenicshippingnews.com/xeneta-shipping-costs-soar-as-long-term-rates-race-150-up-year-on-year/
https://www.hellenicshippingnews.com/dark-activity-deceptive-shipping-trends-lessons-learned-from-the-russia-ukraine-conflict/ (notice who are buying the Russian ships)
On the grain trade and what moves it:
https://www.world-grain.com/topics/1034-trade
Thiat is the most recent issue but for the long history see:
https://www.world-grain.com/articles/15358-a-century-of-grain-trade
I was going to make the same point. Obviously, international law can’t prohibit nations from introducing any sanctions they wish: no state is going to accept limitations like that on its sovereignty. The obvious example is South Africa in the 70s and 80s, where a number of sanctions were put in place by governments around the world. I don’t recall seeing these two authors objecting at the time.
Well… the Black Sea has been closed by mining, probably by Ukraine. No insurers will touch shipping there. Russian ships have been sanctioned and banned from 12% of the world. And how could Ukraine use Odessa as a port when Ukraine is supposedly installing Dutch harpoon missiles there. Who would use that port?
Russia is a special case, isn’t it? Along with China, they are the only peer competition with the US.
South Africa didn’t export 25% of the world’s grains. But they sure exported plenty of strategic minerals and gold. Western corporations probably extracted trillions in wealth from that country over a century. US corporations had huge business interests there (one of my customers helped build their 765kv grid during apartheid). With US blessing, it was directly involved in very hot wars in all neighboring countries, exporting war and terrorism. Plus they developed nuclear weapons with a test in 1979. Why weren’t they shutdown THEN?
But Reagan had a policy of “constructive engagement”. Western sanctions weren’t applied in weeks or months as have been in response to Russia’s invasion; it took place over a decade. I’m not sure South Africa was ever completely cutoff from the financial system.
Lastly, there was an opportunity to avoid this war; it was on offer. US wouldn’t negotiate and its client won’t either. South Africa only had Bantustans and townships on offer. I don’t recall serious negotiations until the 90s when the outcome was unavoidable.
The issue is not the relative niceness of apartheid South Africa and Russia, nor the appropriateness of sanctions. I was simply echoing Dave’s point that the article’s suggestion that “unless approved by the UN Security Council (UNSC), sanctions are not authorized by international law” is simply rubbish, and makes you wonder how much the authors actually know about the rest of their subject.
I deliberately chose a counter-example from a period I remember clearly, involving a country I know well, and where I saw the effects of the (limited) sanctions that a number of countries introduced, as well as the wider boycott and disinvestment movement. As I suggested, nobody at the time claimed that any of these measures needed UNSC approval. And of course there were many subsequent examples of countries and organisations introducing sanctions outside the UN framework: Myanmar is a current obvious example.
There were serious negotiations in South Africa from the mid-1980s, partly prompted by the military, who realised that they could not win the war in Angola. Mandela, of course, was released in 1990, and the ANC unbanned, as these negotiations became formal and public.
I guess it depends on what is meant by “authorized.” Put another way, one way for sanctions to have an international stamp of legitimacy would be a UNSC security council resolution. Without that, the US and its allies can impose sanctions without broad international support, and can claim that the “whole world” supports them, and nations can draw their own conclusions.
Please don’t be disingenuous. These are not national sanctions. The SWIFT prohibition isn’t, the seizure of Russia’s FX assets wasn’t, and the EU not being a nation, none of the EU sanction packages were. Even the normally very neoliberal/neocon Wikipedia disagrees:
https://en.wikipedia.org/wiki/International_sanctions
The US has actively and aggressively been trying to get other nations to hew to its Russia sanctions, see its threats to China, Saudi Arabia, India.
Not sure who you are responding to, Yves, but the thread began with Dave pointing out that the article’s opening assertion – that sanctions not agreed by the UNSC are violations of international law- is simply wrong. I was about to make the same point, I just added an example from my own experience. There are many more. That’s it, really. You can make many valid criticisms of western-led sanctions against Russia but not that they are illegal.
In reality, of course. it’s always states that do the work of implementing sanctions: only the political and perhaps administrative context changes. Sanctions decided by the UNSC are binding on member states, because all SC decisions are.
If I read correctly, the UN says the sanctions absolutely ARE illegal per UN law because they are not national, separate sanctions but international, collective sanctions. Which per Yves quote are illegal.
[Yves Smith comment:
We have a very well established reader who has commented extensively on Brexit and is well known here for his expertise on government legal/bureaucratic matters. You chose his handle, David. I changed your name to “Another David” for now.
Unless you change your handle and stop accidentally or deliberately impersonating “David”, all your comments will go to moderation and will NOT be approved.]
Well, the fact that UN says something is not legal as per UN, does not prevent or illegalize that a country sanctions another country.
Membership of UN does not necessarily mean that you as a country have lost your sovereignty?
And if 5 countries decide – whether under pressure or not – to follow USA’s sanction line – they are sovereign nations too.
I am in no way discussing the idiocy of the entire sanctionism idea and the way it is being carried out by economists and lawmakers – but I am discussing whether or not it is “illegal” or not.
I think there is an implication, not a bi-implication – on sanctions. That if UN decides to sanction someone, then the member states are obliged to follow.
However, if member states – outside of decisions in UN – decides to do some sanctions – then UN cannot stop it ? ?? ?
With the USA imposing sanctions on other countries more and more instead of going to war, I think the USA would be wise to create a new Sanctions Force and move it from the treasury department to pentagon control. There must be thousands of people working in sanctions now, on line in their cubicles searching out the significant others of potential sanctionees and evaders of secondary sanctions, etc. They should have uniforms too, like the new Space Force.
Now THAT is a computer game
The UNSC put financial and trade embargoes (sanctions) on Iraq in 1990.
And as Madeline Albright put it, “500,000 dead Iraqi children were a small price to pay..” The baby formula shortage is just an appetizer for what America deserves, good and hard.
Of course, if America were to abolish free trade and reprotectionize itself in order to re-autarkify itself,
it could produce all the baby formula it needs, and our foreign friends could just cry and cry about how America “isn’t getting what it deserves”.
But that would require the mass-extermination of Free Trade supporters and enablers, in order to permit the steady reprotectionisation and restoration of America’s own Autarconomy.
it would take decades to reverse nafta billy clintons criminal policies. nafta billy thoroughly stripped americas abilities to even produce a aspirin.
trump tried, look what happened to trumps attempt to get back some drug manufacturing, nafta democrats deep sixed it.
It would have to be described ahead of time as a multi-decade project.
” The Free Traders had 50 years to destroy American economy and society. It could take 50 years behind the Big Beautiful Wall of Rigid Protectionism to grow back a functioning economy and society. But without Rigid Protectionism, we can’t even begin.”
i think its going to be forced onto us no matter how hard the free traders try to stop it.
Developing nation population control and expanded markets for American energy and commodity exporters. Let’s see if we can get Europe to commit economic suicide while we are at it.
We Americans are like the Irish were to England. Now we peons are an internal exploited colony within America.
What are going to be the effectiveness of sanctions against Russia at this point? These are based on the premise that there is an “open market”. Those days are now gone, and we’re back to a cold war model of trade at best, and just short of open warfare at worst. Which is why even though it makes sense to drop the sanctions, or seriously put them on the table as a negotiating point, I doubt it will happen. Russia has decided these will most likely never be dropped and is acting accordingly, and America most likely will never drop them because to do so will be to admit defeat.
But without a doubt, we’re looking at major energy and food shortages. Any small country which had been food independent, but changed to accommodate “free trade” on the “open market” is now in literal world of hurt because free trade and open markets are gone.
Given that economic studies indicate that at least 40% of the price inflation is just excessive profit taking (one wonders at putting excessive next to profit, but whatever), it will be interesting to see which countries try to protect their citizens by reigning in profits. America Republican Presidents have done this in the past with wage/price freezes, but those days seem to be gone. Profits are a holy grail and must be protected at all costs.
well said. those that drank nafta billy clintons free trade kool aid, and we were one of them, are about to pay a steep price for nafta billys economic nonsense.
If the embargo can result in a back up of russian oil production and emergency stop to drilling in their fields, that can be very bad for production later. Oil fields can be damaged when they are shut off. It happened to their fields when the soviet union collapsed.
Am I off-base? Or could not those African countries simply pay for grain with roubles. Russia has not closed the store, they have just modified what types of payment they accept.
The Rouble has appreciated so grain is going to cost more.
A lot of poor nations don’t have alot of wiggle room. Maybe the Russians will bail them out. They seem to have extended some aid to Sri Lanka as of late.
The poorer nations may also be afraid of reprisals from the European Union or the United States.
My understanding is that Russia has expressed a willingness to sell grain in the buyer’s national currency as well, similar to working with India for rupee purchase of oil. It also seems that sanctioning of Russian shipping as well as fear of secondary sanctions from the US for having the temerity to chose “not starvation” over supporting US geopolitical goals are impacting the world grain trade.
This is an insightful way of thinking about sanctions:
“Economic sanctions are the modern equivalent of ancient sieges, trying to starve populations into submission. The devastating impacts of sieges on access to food, health and other basic services are well-known.”
Sanctions are meant to hurt the civilian population–which makes them the tactic of choice of cowards unwilling to send in their own cannonfodder. Civilians dying in sanctioned countries don’t make it into U.S. newspapers–not when there are blond Ukrainians to photograph.
Also, as we are seeing, the U.S. elites like them because they are economic–money–which is all the elites care about. It’s as if the foreign policy of the U S of A were being run by M.B.A.s. Oh, maybe it is.
Kommissar Bill Gates, in cahoots with (partnership with) the The Neo-Central Committee Secretariat, (aka, Blackrock and Vanguard), are collectivizing (buying up) the Western World.
1933 decree; “Preventing the Mass Exodus of Peasants who are Starving”
‘TsK VKP/b/ and Sovnarkom have received information that in the Kuban and Ukraine a massive outflow of peasants ‘for bread’ has begun into Belorussia and the Central-Black Earth, Volga, Western, and Moscow regions. / TsK VKP/b/ and Sovnarkom do not doubt that the outflow of peasants, like the outflow from Ukraine last year, was organized by the enemies of Soviet power, the SRs and the agents of Poland, with the goal of agitation ‘through the peasantry’ … TsK VKP/b/ and Sovnarkom order the OGPU of Belorussia and the Central-Black Earth, Middle Volga, Western and Moscow regions to immediately arrest all ‘peasants’ of Ukraine and the North Caucasus who have broken through into the north and, after separating out the counterrevolutionariy elements, to return the rest to their place of residence.’ … Molotov, Stalin
Sanctions seem to be beyond the Rule of Law and Due Process. For instance, this Roosian or that Roosian is sanctioned, no due process. I would also classify the actions against the Uninjected as sanctions, executive or bureaucratic orders without due process. Even if there might be fair and just due process, it is usually too late and expensive.
So, move over Emergency, there is another powerful kid on the block, Sanctions. Just another piece in the Totalitarian Took Kit.
It isn’t common deduction that prices rise to reduce demand, which means those at the bottom are being starved. Simple, but not common knowledge or at least not commonly acknowledged (elephant in the room).
as the world figures out that nafta billy clintons free trade is unworkable, the countries that are not controlled by the free trade cult will no longer put up with garbage economics like this,
a lack of tariffs is starving haitians to death: Bill Clinton forced Haiti to reduce tariffs on U.S. rice, which allowed subsidized rice from this country to overwhelm the markets and put Haiti’s farmers out of business.
same thing has happened to every country under nafta billy clintons free trade
https://www.yahoo.com/news/u-shouldn-t-punish-haitians-214752426.html
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i remember when nafta billy clinton was after japans subsidized rice farmers, when the japanese said that it was for their people in case of agriculture problems, nafta billy went into over drive demonizing the farmers and the japanese policies. nafta billy clinton said the same stuff to japan, as he did to haiti, grow cash crops to raise money and buy your food on the worlds markets. of course he had deregulated commodities, so the markets were drooling over a nit wit economic nonsense to be implemented world wide.
it got so heated with the japanese that i wondered if it would end in violence. nafta billy said thailand can feed asia, except right at that moment, thailand reported a drought had cut the rice harvest to the point where it was a disaster, and could not export any. japan stepped up to the plate with their reserves of rice, and nafta billy shut his blow hole.
but nafta billy never learned his lesson as we see what he did to haiti.
complete economic nonsense like this is also fascism, and a crime against humanity.
so once the nonsense has been done away with and countries are better able to feed themselves, sanctions will not bite as hard.
It should be obvious to all that the Biden government has concluded that the most aggressive policy against Russia, including playing the nuclear chicken game is the best policy to advance both the short term advantage in the midterm elections ( “Biden won’t be pushed around” ) and the long term target of crippling Russia from regaining it’s 2nd super-power global role.) How foolish it is to think that some kind of moral high ground motivates US foreign policy in this bloody war