Why Economic Sanctions Lead to Poverty
According to the U.S. State Department, the U.S. currently has trade barriers and financial restrictions, or economic sanctions, of various types against eleven countries, including Iran, Cuba, North Korea and Russia.
Some of the sanctions target only individuals as in Zimbabwe’s case. Russian sanctions, on the other hand, target a range of industries, most notably defense, oil and energy.
U.N. economic sanctions against Iraq from 1991 to 2003 illustrate the impact of sanctions on the populace. Not only were financial transactions, overseas flights and exports banned, but imports were limited strictly to food and medicine. Gross domestic product (GDP) plunged from $38 billion in 1989 to $10.6 billion in 1996 in Iraq. Per capita GDP plunged to around $500 per person from 1991 to 1996, a decline of over 75 percent from the prior period.
Gross domestic product (GDP) plunged from $38 billion in 1989 to $10.6 billion in 1996 in Iraq. Per capita GDP plunged to around $500 per person from 1991 to 1996, a decline of over 75 percent from the prior period.
For Iraqi people, these statistics had consequences on their health and livelihood. The United Nations Children’s Fund (UNICEF) found that mortality doubled in children aged 5 and below. People consumed 32 percent fewer calories a day. Half of Iraq’s water treatment facilities ceased functioning, and 59 percent of people lacked access to clean water as a result. Over a quarter of Iraqi health centers closed and three-quarters of hospital equipment broke down.
People consumed 32 percent fewer calories a day. Half of Iraq’s water treatment facilities ceased functioning, and 59 percent of people lacked access to clean water as a result. Over a quarter of Iraqi health centers closed and three-quarters of hospital equipment broke down.
As salaries declined, many social problems arose. Iraqi citizens had to sell their belongings for food and many had to sell their homes. Crime and divorce rates skyrocketed. Many single mothers were forced into prostitution.
While exact figures are hard to find, a United Nations field office said, “The country has experienced a shift from relative affluence to massive poverty.” Likewise, debate surrounds the exact number of deaths caused by sanctions but estimates somewhere in the hundreds of thousands.
Less severe sanctions also hurt. The World Bank reports that Iranian per capita GDP fell from over $7,800 in 2011 before sanctions, to under $5,450 in 2014. The Moscow Times said an additional 2.3 million Russians became impoverished through the first nine months of 2015. Sanctions hurt, and yet, the people do not rebel. Leaders stay in power and policies rarely change.
University of Oregon professor James C. Davies “J-Curve” theory of revolutions explains why sanctions often fail to induce revolution. According to this theory, people revolt when reality fails to meet expectations for the future following a period of rising prosperity. An example of this theory in practice can be found in South Korea. Following decades of prosperity, people demanded more political power and freedom in the 1980s and successfully rebelled.
Economic sanctions are powerful in their effect on society, often causing significant problems for citizens within the countries being sanctioned.
– Dennis Sawyers
Sources: Central Intelligence Agency, Global Policy Forum, The Moscow Times, The Nation, U.S. Department of State, World Bank
Picture: Google Images, Wikipedia