June 03, 2010

Israel and Gaza: When Sanctions Fail

Writing about web page http://news.bbc.co.uk/1/hi/world/middle_east/10195838.stm

Israel's deadly assault on the SS Mavi Marmara, the Turkish aid ship bound for Gaza, has evoked worldwide protests and condemnation. Not only that, it promises to undo Israel's three-year blockade of Gaza. Egyptian President Mubarak has ordered the reopening of Egypt's closed border crossing to Gaza. U.S. Secretary of State Hillary Clinton has called the situation in Gaza "unsustainable." Israeli relations with Turkey are clearly at risk; responding to popular protests, Turkish Prime Minister Erdogan has called Israel's raid a "bloody massacre."

In many ways Israel's use of sanctions to isolate and weaken the Hamas rulers of Gaza has followed a predictable course, up to and including its calamitous denouement. In the last hundred years trade sanctions and blockades have been employed in many conflicts, from World War I to Iran and North Korea today. It's possible to draw three lessons from this experience:

  • Trade sanctions are generally slow to take effect on the country that is sanctioned and have fewer economic effects than expected. This is because, when a country is denied access to commodities that were previously imported, new ways of living without them turn out to be available. Economies are made or substitutes found. There are few limits on the ingenuity that can be brought to bear, provided the will is there. Even poor communities find workarounds. Of course, trade sanctions do make everyday life more difficult and raise the costs of resistance.
  • Trade sanctions are usually very costly to impose. The country that imposes them has to meet the economic and political costs of enforcement. The economic costs alone can be large or small depending on the particular situation, but these are at least fairly predictable. The political costs are rarely foreseen beforehand, but can turn out to be even more important. For example, trade sanctions generally have strong political effects that are negative from the point of view of the blockading country. Within the blockade, the effect is to stiffen national feeling, which consolidates support around the government. As a result, the will to maintain resistance turns out to be there, whether or not it was there previously.
  • Trade sanctions can also have strong political effects on the international community, and these too can be counter-productive. This is because trade sanctions cause collateral damage, some of which hurts the commercial interests and citizens of neutral countries. In turn, this affects neutral opinion. In some circumstances, the result can be to convert neutral countries into allies of the country that is sanctioned. This is not inevitable, however.

Trade sanctions are often imposed in the expectation that they will quickly cause the adversary's economy to break down or, failing that, to cause the adversary government to reach an acceptable compromise. Alternatively, they are advocated by well meaning humanitarians who prefer non-violent ways of changing the adversary's behaviour. But it is hard to think of a case where trade sanctions actually worked in that way.

Historically, trade sanctions generally did worsen the economic conditions of the sanctioned population and signficantly increased the economic costs of maintaining resistance, as intended, although by less than expected. The political effects, in contrast, tended to work in the other direction, making it easier for the sanctioned government to impose the economic costs on its community. Any payoff to the sanctioning power did not materialize in less than several years and often, even then, only when combined with direct military action.

A clear illustration can be found in World War I. From an early stage in the war, Germany imposed a submarine blockade on the British Isles. Since Britain imported more than three quarters of the food calories consumed in peacetime, German naval strategists believed this was a war winning weapon. Eventually, however, the blockade may have done more damage to Germany than to Britain.

How did Britain survive the blockade? Countermeasures included wartime expansion of home agriculture, its restructuring away from meat to cereals, and rigid prioritizing of convoy shipping space. These measures, although costly, were so effective that, despite a large reduction in food imports, there was no deterioration in wartime nutritional standards for the British population. This illustrates well how the principle of substitution can lessen the effectiveness of blockade in comparison to what is expected beforehand.

The blockade was extremely costly for Germany, which had to build and operate hundreds of ocean-going submarines and replace heavy losses at sea in order to sustain a blockade that was only partially effective. The political costs to Germany were even more disastrous. Within Britain, the political effect was to stiffen patriotism and national resistance.

Internationally, Germany's efforts to tighten the blockade led to the sinking of neutral ships, with their cargoes, crews, and passengers, and to the deaths of neutral citizens carried by British ships. As a result, the neutral community became more sympathetic to Britain. In the first years of the war, the most important neutral power was the United States. It was the German policy of unrestricted submarine warfare that progressively antagonized American opinion and brought America into the war in 1917. America's entry into the war ensured Germany's defeat. These effects illustrate how the political costs of trade sanctions can outweigh any benefit to the blockading power.

During World War I, Britain also blockaded German trade. This was achieved bloodlessly, by a combination of the control of surface shipping and diplomatic pressure on Germany's neutral neighbours. Of course this was very costly to Britain but one difference is that Britain did not lose as many friends as Germany. The main reason is that Britain did not need to attack neutral assets or victimize neutral citizens to enforce its blockade of Germany. In contrast, Germany could not attack British trade without sinking neutral ships and shedding neutral blood.

This is now Israel's problem with Gaza. Until recently, both Israel and Egypt had a common policy of opposing the Hamas administration in Gaza by means of trade sanctions. The sanctions have had some positive effects. Syria and Iran have not been able to resupply the Hamas militants with armaments to attack Israel, which no longer faces daily bombardment. But sanctions have not succeeded in bringing Hamas down or changing its goals. They have not freed the Israeli soldier Shalit Gilad. The economy of Gaza has been reduced to a low level but is maintained there by sanction-busting gangs of criminal entrepreneurs whose profits depend on the blockade, on smuggling through it, and on the distribution of smuggled goods.

The aid flotilla, and Israel's heavy handed response, have broken this equilibrium. The siege has been ended, temporarily at least, on the Egyptian border. Having lost the cooperation of Egypt and Turkey, Israel cannot reimpose sanctions without undertaking measures that are likely to further alienate world opinion; possibly, Israel cannot reimpose it at all. In this way the blockade of Gaza has conformed with historical experience.

I say this without considering the morality of the opposing sides and their actions. Israel has the right to defend its citizens against their enemies. But the blockade of Gaza has ceased to be a means to that end.


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I am a professor in the Department of Economics at the University of Warwick. I am also a research associate of Warwick’s Centre on Competitive Advantage in the Global Economy, and of the Centre for Russian, European, and Eurasian Studies at the University of Birmingham. My research is on Russian and international economic history; I am interested in economic aspects of bureaucracy, dictatorship, defence, and warfare. My most recent book is One Day We Will Live Without Fear: Everyday Lives Under the Soviet Police State (Hoover Institution Press, 2016).



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