UN Sanctions Against Iraq Finally Lifted

I'm back after spending a few days in the mountains with spotty internet access, so blogging should return to normal.

Back in September, I wondered what the deal was with the sanctions on Iraq. I had assumed that they had been lifted following the 2003 invasion, but they hadn't been. Well, now they have. The UN sanctions at least:

In a statement, the Security Council said it "recognises that the situation now existing in Iraq is significantly different from that which existed at the time of the adoption of resolution 661" in 1990.

The council also voted to return control of Iraq's oil and natural gas revenue to the government on 30 June and to end all remaining activities of the oil-for-food programme, which helped ordinary Iraqis cope with sanctions.

But there are still some sanctions that remain in place:

UN Secretary General Ban Ki Moon said Iraq must make efforts to agree a border with Kuwait and to agree on a dispute over war reparations if all sanctions were to be ended.

Baghdad still pays 5% of revenues from its oil sales into a fund which pays reparations to Kuwait.

I find it remarkable that the sanctions would not have been immediately lifted in 2003. For the last seven years Iraq has been suffering from devastatingly high unemployment, and few public finances (that weren't provided by foreign governments) to provide security and services to the Iraqi people. These conditions have been identified in many studies as contributing to terrorist and insurgent activity*. As a strategic matter, it seems incredibly short-sighted to invade a country, dismantle the government, privatize the state-run industries (thus causing massive unemployment), and then try to provide security and keep the public from turning to violence, all while preventing access of that state's one primary industry to international markets.

Further, Kuwait should forgive all reparations immediately. We know from history that impoverishing a rival nation following a conflict can be counterproductive, especially following a regime change. Keynes saw it in 1919, and Kuwait would be wise to begin building peaceful relations with Iraq sooner rather than later. If Steve Walt is right that Kuwaitis still have a high regard for the U.S. -- and they certainly still enjoy the security that the U.S. provides -- then the U.S. may have some leverage here. We should pressure the Kuwaitis to forgive Iraq's debt, and explain how it is in their long-run security interest to do so. And ours too. Getting the Iraqi economy moving is the best way to improve its security.

The Iraqi people have been punished enough for the sins of Saddam Hussein.

*The "What Causes Terrorism?" question is anything but resolved, see e.g. this post from Phil Arena, but I think everyone would agree that economic deprivation doesn't have a positive effect on peace and stability.

Aniversario Feliz

It's the 50th anniversary of the U.S. embargo of Cuba. I think Greg Weeks says it best:

There just isn't any intellectual defense of the embargo anymore. It is not the cause of Cuba's economic woes--Fidel Castro himself has said the economic model is broken--though it has made the lives of the average Cuban more difficult. It has not led to the ouster of the Castro regime. It represents limitation of the freedoms of U.S. citizens. It creates global sympathy for a small country perpetually bullied by Goliath.

None of these outcomes are good for the Cuban people, for U.S. national security or for the U.S. economy.

Iraq Sanctions Bleg

I recently heard that the sanctions against Iraq have not yet been lifted, and won't be until the Iraqi government pays the U.S. government some amount of money, which I believe is related to post-war reconstruction. Perhaps some restitution to Kuwait too. This sounded crazy when I heard it, but it came from a somewhat-reputable source (that I now cannot recall). Wikipedia seems to disagree, although the entry focuses on U.N. sanctions, so I suppose it's possible that U.N. sanctions were lifted while U.S. sanctions persist.

Anyway, now I'm confused. I had believed that the sanctions ended when the war started. Then I read somewhere that they didn't. Now I'm finding sources saying that for the most part they ended then, with some exceptions that have mostly been eliminated in a series of executive orders since. For example, this OFAC summary (pdf), released last week by the Treasury Dept., says:

There currently are no broad-based sanctions in place against Iraq, but there are certain prohibitions and asset freezes against specific individuals and entities associated with the former Saddam Hussein regime, as well as parties determined to have committed, or to pose a significant risk of committing, an act of violence that has the purpose or effect of threatening the peace or stability of Iraq or the Government of Iraq or undermining efforts to promote economic reconstruction and political reform in Iraq or to provide humanitarian assistance to the Iraqi people.

Those exceptions are probably wide enough to drive a Humvee through, and could probably be applied to just about any person or group in the country. More confusingly, this article from February indicates that U.N. trade sanctions still apply. A quick Google news search doesn't turn up much since.

Does anybody out there have a clear sense of what's going on with this?

Are the Iran Sanctions Working?

Joe Klein believes the Iran sanctions are working:

But Krauthammer is right that there's something going on, something very important, with Iran--something that he and his fellow neoconservatives didn't anticipate. (Indeed, no one did.) The sanctions are working; they're having a major impact on the Iranian economy. The powerful bazaari community has been shocked not just by the universal support for the sanctions, but also by their comprehensive nature. Iranian ships are sitting at their docks because they international community is refusing to insure them. Banks that have done business with Iran in the past are refusing to do so now because the UN sanctions--that's right, those "weak" UN sanctions--target them as well. The Iranian economy, a stagflation fiasco before the sanctions, is cracking.

As a result, the Administration has been receiving all sorts of feelers--public and, for the first time, private--from the Iranians about resuming the negotiations on the nuclear program. Recently, the Iranians have promised not to enrich their uranium to the higher 20% level they threatened earlier--and proceed with the uranium exchange plan they negotiated with Turkey and Brazil. That's not sufficient. Any negotiations must take place within the IAEA matrix, with the UN Security Council's 5 permanent members, including the U.S., plus Germany. I'd hope that the Obama Administration would insist on a concession--a meaningful sign of good faith from the Iranians--like increased access for IAEA inspectors and the release of documents relating to their nuclear program that the IAEA has asked for, and not received, in the past--before any new round of negotiations begins. Too often in the past, the Iranians have used negotiations as a stall; they have to understand that's no longer possible. (If necessary, to preserve Iranian national pride after a century of being ordered around and messed with by the colonial powers, this can be done quietly.)

I'm not too sure what to think of this; there have been various reports over the past few weeks that an American or Israeli military confrontation with Iran has recently become more likely, not less. (Including one from, erm, Joe Klein.) In any case, "feelers" are no clear sign of progress, nor are concessions like those Klein mentions.

I think Klein is right about one thing: the new round of sanctions are hurting Iranian businesses and consumers. The political situation in Iran is already tenuous; the combination of an aging and ailing Khameini, crippled Ahmadinejad, and a somewhat robust reformist movement is certainly volatile. The sanctions could bring these tensions to a head. If, and this is a very big "if", the Iranian public blames their leadership for their economic suffering and not the international community, then this could pave the way for a shift in Iranian leadership, under which Iran might be willing to make a credible pledge to only pursue nuclear energy, and not weapons. That's the only scenario under which I see the sanctions "working", if by "work" you mean "ending Iran's weapons program beyond a reasonable doubt". Khameini and Ahmadi have too much at stake to make the sort of concessions that the Obama administration and its allies want to see.

At this point I have no idea if that scenario is plausible. Neither does Klein. I believe that over the medium-run it is plausible, but estimates put the clock at roughly a year before Iran crosses the Rubicon, or at least that Israel thinks that's where the clock is. In any case, it's really difficult to see whether there's been any budge from Iran, or whether there will be. It will depend on how, and how quickly, the domestic politics shakes out.

New Round of Iran Sanctions... Yawn?

Note: The following is a guest post by Christopher Dittmeier, a fellow grad student at UNC.

The UN Security Council has passed a new round of economic sanctions against Iran, touted by the White House as a major ramping-up of pressure against Tehran's nuclear weapons program. However, despite the press surrounding the negotiations, pre-negotiations, and side deals involved in today's UNSC vote, can we expect the new round of sanctions to effect progress in the nuclear-program negotiations? I think not.

The theoretical backing to sanctions is to translate economic damage (the interdiction of trade and financial activity) to political damage (weakening the target's support among its winning coalition sufficiently to induce a change in policy). While the US has laid out its coercive program quite clearly over the fourteen years of the nuclear- and terrorism-oriented sanctions, both previous sanctions as well as today's new round fail to connect the political ends to the economic means: any effective sanctions regime must place pressure on the support structure for Iran's leadership, namely the Iranian Revolutionary Guard Corps (IRGC).

Today's UNSC resolution fails to achieve that. There is no comprehensive ban on financial or military dealings with the IRGC, and the asset freeze / travel ban list, which was expanded today, has proven ineffective against the most basic use of shell companies. If the US is unable to interdict the economic activities of the IRGC, there is no economic pressure, and therefore no political impetus for a change in policy. Assuming an optimistic outlook for the effectiveness of sanctions as coercive tools (a position which has its own detractors) the new round will fail to reach even the first objective of economic coercion, and can be relegated to the category of noise.

Not that noise is entirely without purpose in this respect. Sanctions are also considered to be signals of resolve (en route to the ultimate means of military conflict to correct the undesired policy). However, this can best be used to signal resolve not to Iran (which has seen these signals for fourteen years, and is well-informed of the US lack of resolve for militarized conflict) but to the American public, which wants its officials to "do something" about the Iranian threat. Paradoxically enough, the best way to accomplish this is to do nothing (and not even to do it that well). While the new round of sanctions may placate moderates in the American congress, it will not prevent the Iranian nuclear program from moving forward, nor will it induce any favorable changes in the Iranian government's near-term feelings for the United States.

The World Cup: High Politics and Low Journalism

For some reason, IR students and scholars seem to be much more interested in soccer. Maybe it's because it's the world's sport. Maybe it's because significant international events like the Football War have been influenced by the game. Maybe it's because researchers can link soccer performance to national cultures of violence (pdf). Pop social scientists and public intellectuals have also found soccer a ripe subject for examining the world.

IPE@UNC is no exception. We've had a lot of posts discussing soccer and its role in international politics. So I was pleased today to see a couple of news items relating soccer and international studies. First, Emmanuel points out how soccer broadcasts may be used as a type of weapon by South Korea on North Korea:

Recently, the South Koreans have claimed that the fatal sinking of one of their military vessels was due to foul play from the North Koreans. While we wait for more solid evidence to this effect from the South Koreans, it seems they have come up with their own unique way to get back at Dear Leader Kim Jong-il's strange play acting. It turns out that, in the absence of a solid telecommunications infrastructure, North Korea relies on South Korea to provide a retransmission of international broadcasts of the World Cup. So, if South Korea really wants to turn the screws into North Korea, it's "no World Cup football for you, murderous regime."

If this is true it will have to go down as one of the strangest sanctions threats in the history of international politics, if it even qualifies as a sanctions threat. Is there a demand attached, or is this mere retaliation? And could this possibly have a real effect on politics within the DPRK, or on relations between the North and South? I doubt it, but I suppose stranger things have happened.

Like this:



Gize? Srsly. South Africa is not a continent. But if it were it wouldn't be South America. Unless, as Deadspin notes, South Africa just won a war that nobody knew about. Come on, people! It's almost World Cup time! Time to start figuring out where other places are! We've only got a month!

Sanctions, Sovereign Borrowing and Financial Integration

Over the last couple of months, Sarah, Will and I have been working on our MA theses, each hoping to make a sufficiently important contribution to the discipline (or at least show sufficient potential to some day contribute something) to warrant the department to continue funding us and let us start studying for comprehensive exams and work on our dissertation proposals. I'm writing my thesis on the intersection between economic sanctions and finance, specifically how financial integration and sovereign borrowing affects a target state's decision to acquiesce to sender demands in high politics cases.

Earlier this afternoon, I stumbled upon an article titled "Don't Sanction Dictators" by Jason McLure that was published in Foreign Policy last summer that has a bit in common with the argument I'm trying to advance. In the piece, McLure argues that sanctioning dictators is a futile policy choice for advanced countries and uses the threatened sanctions against Eritrea as he makes his case. McLure argues:

Sanctions are made to cut countries off from vital international exchange. The trouble is, Eritrea already trades less with the outside world than any country in Africa and places 210th out of all 226 countries and islands for global commerce.

He then discusses the specific case of Eritrea and how sanctions against dictators won't work because they won't respond to the coercive attempts of larger states and concludes:

These lessons apply to sanctions on dictators more broadly. How do you punish North Korea with sanctions when its trading partners are already limited to a handful of countries -- none of which are likely to pay heed to a harsher set of rules? How do you choke Zimbabwe's Robert Mugabe when his strongest rationale for staying in power is to save his country from the hands of countries who would (and do) impose sanctions? Perhaps it's no wonder that such countries' leaders not only survive sanctions, but use them to justify bad behavior.

I'm really happy to see McLure make this argument, and the beginning of his logic is similar to what I am arguing in my thesis. However, McLure stumbles in a couple of ways, specifically when he conflates "international exchange" with trade flows and makes a distinction between autocratic and democratic governments that I argue actually doesn't matter. Analyzing sanctions episodes using a political economy approach, specifically looking at the influences of trade and finance on sanctions success makes a lot of sense and should give our explanations greater traction (at least I hope it does). This is one way in which the extant literature on economic sanctions has been surprisingly weak.

I disagree with McLure and argue that it's not that dictators are better able to withstand the coercive pressure of larger powers simply because of the characteristics of dictatorships, it's the fact that most dictatorships are not intricately linked with the international financial system to the point where larger powers (i.e. the United States) can impose sufficient costs to induce them to cooperate. This characteristic can't be solely attributed to dictators. It's in fact possible for democratic states to have very little integration with global financial markets and thus hold the same financial characteristics that are common in certain autocracies, and you can also have an autocratic government (Singapore) that is heavily integrated with and dependent on financial markets. Furthermore, I object for an array of reasons with immediately relying on trade flows to make an argument for sanctions success without engaging the finance side (if you want to know why, I'll have my thesis up on my website sometime by late April).

Larger powers have very little bargaining leverage over states that are not integrated with and dependent on the international financial system. Why? Because the costs that matter (borrowing costs that are directly imposed on governments, rather than trade costs that are dispersed across the population) can't be unilaterally imposed by these states. They need the cooperation of financial markets, and more specifically institutional investors in order to impose costs on targets. These larger powers need to increase the risk associated with investing in a given country, which increases the borrowing costs of the target state as investors seek higher interest rates and/or decrease exposure to that market in order to compensate for the increased risk. A credible threat to act if a government does not change its policy coupled with the effects (or potential effects) of sanctions themselves are sufficient to induce an increase in a target government's risk profile.

Institutional investors can only impose costs on states that require foreign capital to continue to finance their international debt obligations, roll over their debt and fund their operations. Those that are not sufficiently integrated and not dependent on global markets for access to capital will have dramatically lower costs when engaging in sanctionable (risky) behavior because they don't have to worry about increases in borrowing costs when calculating the costs and benefits of a given policy bundle. It is not that states with one type of political regime or another are better able to withstand coercive pressure from advanced, industrial countries, it's the fact that those states that are dependent on external sources of financing have the most to lose from engaging in that activity and can't withstand the coercive pressure. Non-integrated and non-debt dependent states' individual cost-benefit analyses are not sufficiently altered by sanctions threats or impositions and thus the costs associated with defecting from the status quo are very low. Therefore, sanctions episode success should be based on two indicators: 1) a country's degree of financial integration and 2) it's external debt to GDP ratio. Or at least I hope it is so that my thesis committee will find it in their hearts to pass me!

Tragedy of the Day

From Easterly and Freschi:

Multiple critics have protested ever since the US government, hoping to force President Andry Rajoelina’s questionable government to hold elections, first threatened to remove preferential trading rights for Madagascar.

The Malagasy textile industry was a clear success story of the US African Growth and Opportunity Act (AGOA), which removed US quotas and duties from thousands of products from eligible African countries. Madagascar’s exports tripled in the first three years of the program, and the textile sector, which made up 60 percent of Malagasy exports, accounted directly for 50,000 jobs and indirectly at least 100,000 more.

The US pulled the plug on AGOA at the end of December and import duties of up to 34 percent were reintroduced. ...

Among the effects we are NOT seeing: signs of increased interest in arriving at a power-sharing agreement or instating democratic governance on the part of Rajoelina’s government.

Ineffective sanctions, effective job destruction. An unaccountable branch of the US government hurts poor people far away who have no voice in US politics. Deeply saddened…we don’t know what more to say.

Seconded.

I wonder what pro-democracy/anti-trade "public citizens" think of this? A month ago they loved it, on the grounds that it would improve the state of Madagascar's democracy. So far that doesn't seem to be happening. Maybe it's too soon to tell, but I predicted this then, and issued a challenge playing off of Aid Watch's motto... all I ask is that democracy-promotion actually promote democracy.

Let's move beyond knee-jerk "trade = good/bad" ideology and get to facts: what are the reasonable odds that this policy is successful in promoting democracy in Madascar? Economic growth? Anything good? I think those odds are very slim, and so far the evidence bears that out. And if you don't get your Platonic ideal of unencumbered democracy, these sanctions are just needlessly impoverishing some of the world's poorest people.

Pardon me, but I don't see how advocating for horrible outcomes is acting like a responsible global citizen.

Paging Dan Drezner

Achtung. I believe it is your duty as a premier Salma Hayek international politics blogger who first made his academic bones writing about sanctions to blog this. You're not going to let these folks steal all your thunder, are you? Surely a policy debate could use the expertise of an academic expert, right? Right? You could sell some books, the world could gain some knowledge, everybody wins.

Then again, I could just walk down the hall and ask this guy what he thought.

UPDATE: Maybe what I want is somewhere in here, but I'm busy these days so who knows when I'll get to watch it.



UPDATE 2: Success.