Western sanctions against Russia have become large-scale. They have not been weakened since Putin launched a full-scale war against Ukraine two months ago.. The main reserves of the Central Bank of Russia are frozen. The country's oligarchs are trying to hide their wealth in offshore. Western capital cannot actually be invested in Russia, and manufacturers of high-tech components have practically stopped their export. Most Russian banks are now (or will soon be) disconnected from the Swift financial messaging network. More than 400 Western companies left the Russian Federation. Russian coal under embargo and pressure mounts to extend oil and gas ban.

Yale University professor Nicholas Madler, in an essay for the Wall Steet Journal, recalls that in Warsaw, US President Joe Biden said that " Initially, many expected that such devastating economic pressure would force the Kremlin to abandon the invasion.. Some even hoped that the sanctions would spark internal unrest that would undermine Putin's regime.. While Russia's growth prospects are dire now, the end result of the sanctions has proved as difficult to predict as the war itself..

For decades, Western elites have viewed sanctions as an easy substitute for military conflict.. After the end of the Cold War, many expected countries to become more peaceful as they connected to the global capitalist order.. Economic sanctions offered a convenient way to contain rogue states at low cost and acceptable risk.. As a result, the use of sanctions increased dramatically between the 1990s and 2010s.. On occasion, the US still resorted to bringing in troops, but Washington punished most autocratic regimes, from North Korea to Sudan and Belarus to Cuba, by placing them in economic quarantine and forgetting about them..

Russia's invasion of Ukraine showed the shortcomings of this approach. The Russian Federation is not a kingdom of hermits, but a G20 economy. For two decades after the end of the USSR, it sought to integrate into world markets. The West imposed sanctions after Russia's occupation of Crimea in 2014, but they did little to reduce Russian military power. The threat of sanctions in the months leading up to the outbreak of war also failed to prevent Putin's February 24th invasion..

Historically, sanctions have worked better against small states than large ones.. In the 1920s, the threat of sanctions quickly and effectively deterred states such as Yugoslavia and Greece from undesirable actions.. But with larger powers such as fascist Italy or imperialist Japan, economic pressure tended to be a weapon of attrition rather than containment.. It will almost always take a major economy months, if not more, to really feel the effects of sanctions.. If the goal is to quickly undermine the combat power of Russia, a resource-rich, hostile nuclear power with a large army, then sanctions have limited application..

European leaders belatedly admit that economic pressure alone cannot end a war of this magnitude.. Luxembourg Foreign Minister Jean Asselborn said last week that European leaders had to choose between " He added: \? " Indeed, the sanctions only add to the fierce resistance offered by the Ukrainian army, which is equipped with an increasing amount of NATO military equipment..

The US and Europe have shown remarkable unity in adopting the current sanctions regime. President Ronald Reagan's efforts to impose sanctions on the USSR, Libya, and Nicaragua in the 1980s were more controversial, met with resistance from German Chancellors and British Prime Minister Margaret Thatcher.. European leaders successfully pushed the Reagan administration to lift sanctions that would have prevented European firms from building gas pipelines from Siberia. The relevance of this longstanding pipeline dispute to the recent Nord Stream 2 saga has not gone unnoticed by US Secretary of State Anthony Blinken, who once wrote a book about this forgotten Atlantic Alliance crisis..

Maintaining sanctions on a country the size of Russia will require the US to manage not only its NATO allies, but non-Western ones as well.. A total of 37 advanced economies are coordinating a campaign to isolate Russia. This group controls about 55% of global GDP. But most of the international community remains outside this coalition..

Many countries in Latin America, Africa and Asia are reluctant to join the sanctions in part because they depend on Russian goods and raw materials.. Most emerging economies cannot afford to stop buying Russian wheat, corn, oil, copper, nickel, aluminum and nuclear technology without alternative sources of supply. If the West wants to convince or force more than half of the population of the global South to abandon trade with Russia, it will have to help them absorb the shock of abandoning Russian goods, otherwise they will face global inflation, debt crises and regional recessions in the future..

When the time comes for peace talks, sanctions will be a useful tool. A negotiated settlement may seem far-fetched now, but history shows that warring parties' military goals can change over time, especially in protracted conflicts.. In the case of real negotiations, the phased lifting of sanctions may be linked to the withdrawal of Russian troops from Ukrainian territory..

We don't know what victory in this economic war will look like..

Western negotiators could similarly use frozen assets. To date, the US, British, EU and Swiss governments have frozen about $400 billion of Russian central bank assets and at least $240 billion of private fortunes.. Thus, the West received a significant gain, but it also suffered serious financial losses due to sanctions.. At the end of 2020, the volume of foreign direct investment in Russia amounted to $446 billion. Much of this money was lost as Western firms left the country.. Another $120 billion in portfolio investment has become irrecoverable or is at risk of default. Putin can nationalize the remaining assets of Western companies, similar to how the Bolsheviks in 1918 decided to cancel all debt and property rights of Western investors.

The expropriations of the 2020s, like the expropriations of the 1910s, will define the West's relationship with Moscow for years to come.. But if, in the future, political changes in Moscow lead to rapprochement, the Western powers will have to not only rebuild Ukraine, but also help rebuild the Russian economy, devastated by sanctions.. The interwar reproaches that followed the Russian Revolution and the Treaty of Versailles are a reminder that justice for the victims of aggression must be combined with generous provisions that mend international relations and promote economic stability..

Economic sanctions against Russia have opened up a new battlefield: foreign exchange markets, strategic technologies, corporate supply chains and foreign assets.

But the technical ingenuity of the new generation of sanctions fails to answer important policy and strategy questions.. We do not know what victory in this economic war will look like and whether it can lead to a stable and lasting geopolitical solution.. Can a nuclear power whose economy and institutions have been destroyed by sanctions move towards democracy without outside help Sanctions alone do not provide the answer.. To do this, the West will need positive economic measures and far-sighted diplomacy..