The Impacts of Unilateral Economic Sanctions

ABSTRACT

The term unilateral economic sanctions is defined as “economic measures taken by one State imposing it on another State, examples of such measures include trade sanctions.” Economic sanctions are criticised for failing to accomplish their goal and for having destructive effects that cause poverty, human rights violations, healthcare inefficiency, and deprivation of essential living standards. These subjects and their definitions will be thoroughly covered in this article, along with their connections to the effects of unilateral economic sanctions and their political and economic effects on the countries they are imposed against.

The approaches that have been used are the qualitative and analytical methods. The article gathered data regarding the impacts of unilateral economic sanctions on different levels, such as the effects on human rights and the economy, and international trade and diplomacy.

The effects of the imposed unilateral economic sanctions have shown that they were a failure and had a disastrous impact on a variety of areas, including human rights, the right to adequate healthcare and education, and the decline in the economy that increased unemployment rates.

1 INTRODUCTION

Unilateral economic sanctions are defined as “economic measures taken by one State to impose a change in the policy of another State.”² Economic sanctions are condemned for not achieving their intended outcome and for negatively impacting society, leading to poverty, human rights violations, ineffective healthcare, and the loss of basic living conditions.

The article will seek to demonstrate the consequences of the unilateral economic sanctions imposed on the sanctioned state which constitute human rights violations.

2 LITERATURE REVIEW

The author will mainly focus on utilising primary sources, such as statutes, rules, regulations, international treaties, etc. Moreover, the article will resort to secondary sources, for instance, legal books related to international trade, economics, commercial, and corporate law, legal scholars, legal articles, and research papers.

Iryna Bogdanova discussed the legality of unilateral economic sanctions under public international law and explained the legality of coercive economic measures imposed by individual states, also known as unilateral economic sanctions under public international law³ . This study primarily focuses on which elements of public international law might be violated by the states that impose unilateral economic sanctions. Additionally, this work addresses the extent in which public international law constrains powerful states from overusing economic coercion.

The author focused mainly on debating the lawfulness of unilateral economic sanctions and how they cause human rights violations. In brief, unilateral economic sanctions will likely harm and violate Human Rights.

Anthony Arnove mentioned the example of Iraq in his book “Iraq Under Siege,” where he tackled the level of breach caused in the healthcare system in Iraq and the economic state, which caused people to forgo education because they cannot afford it or they chose to work instead to raise their families’ wages. All these examples fall under the scope of human rights.⁴

Another article discussed the oil reserves in Venezuela that are used throughout the world. Venezuela imported practically all the food, medicine, medical equipment, and other supplies it needed for energy production and electricity generation using its foreign exchange reserves. Therefore, if Venezuela were prohibited from selling its oil reserves, Venezuela would also be prohibited from importing such vital and life-sustaining supplies. As a result, Venezuela lost nearly $6 billion in oil revenue that was utilized by the government to import necessities for its people.⁵

In this paper, different cases reflecting on each element (human rights, economy, and international trade) will be discussed, including, but not limited to, the sanctions on Iraq by UNSC that prevented medical aid for birth defects resulting from uranium depletion in Fallujah; affected health sector; affected economy (annual income fell from $2,450 per capita to $250 in ten years). Also, Syria has been under U.S. sanctions since 1979 and, therefore, other countries were unable to send aid and help following the earthquake in Syria. We will analyse and illustrate these consequences in the upcoming parts of the article.

We are going also to discuss the aspects that are being harmed: human rights, economy, and international trade (diplomacy). These topics will be covered intricately, defined, and their relation to the unilateral economic sanctions’ consequences highlighted, demonstrating the economic and political repercussions on the sanctioned states’ societies.

3 IMPACTS AND CONSEQUENCES OF IMPOSING “UNILATERAL ECONOMIC SANCTIONS” ON DISPUTING STATES

The Office of the United Nations High Commissioner for Human Rights’ website defines unilateral coercive measures as the “economic measures taken by one State to compel a change in the policy of another State.”⁶ Examples of these measures include trade sanctions, defined as commercial and financial penalties applied by one or more countries against a targeted self-governing state.

The Universal Declaration of Human Rights (UDHR)⁷ illustrates that there are 30 basic human rights that every human being should enjoy.

In this part of the article, we will tackle the impacts and consequences of imposing “unilateral economic sanctions” on the disputing states, including several case studies that reflect the accurate results of unilateral economic sanctions, then determine the extent of their effectiveness in establishing political change between the disputing states.

3.1 Еffect of unilateral economic sanctions on human rights

Economic sanctions are criticised for failing to accomplish their goal and for having destructive effects that cause poverty, human rights violations, healthcare inefficiency, and deprivation of essential living standards.⁸ In this section, we will cover the human rights piece by highlighting its connection to the impact of unilateral economic sanctions. Human rights is a broad term as it is an umbrella that covers multiple elements falling under its scope. For instance, economic, social, and cultural rights, including the right to an adequate standard of living, are placed under this category. Additionally, so do civil and political rights, such as the prohibition of slavery and forced labour. All these elements fall under the umbrella of human rights that harmed by the enforcement of unilateral economic sanctions.

3.1.1 Poverty

This subsection examines the consequences that unilateral economic sanctions have on poverty, as well as topics that are strongly associated with poverty. Poverty is described as insufficient income to cover basic expenses like housing, clothing, and food.⁹ The poverty rate tends to increase in sanctioned countries as a lack of access to resources and an increase in exploitation of a particular class of people causes poverty. This exploitation typically occurs through wealth accumulation by corrupt entities, whether foreign or domestic.¹⁰ Unilateral economic sanctions tend to restrict those already exploited by the corrupt entities from accessing resources that could provide them with a better standard of living as defined by the United Nations Development Program. ¹¹ This lack of access happens when all necessary aid supplies or resources to sanctioned countries are shut down and they are isolated economically. The purpose of unilateral economic sanctions is to utilise this economic isolation to enforce the country’s political agenda, imposing them on the sanctioned state. However, on the contrary, unilateral economic sanctions have dire consequences. Unilateral economic sanctions lead to a notable decrease in GDP per capita, a clear indicator of deteriorating economic conditions in a country after sanctions are imposed.¹² Additionally, the severity of sanctions is directly proportional to the severity of the increase in sanctioned countries’ poverty rates.¹³ These examples will be further discussed in a later subsection, specifically regarding cases studied with testing of the effectiveness of unilateral economic sanctions. The examples in Iraq, Iran, Sudan, Syria, and Venezuela, etc., show that unilateral economic sanctions are inefficient and ineffective in delivering on their purpose. However, their consequences are reflected in the lives of sanctioned countries’ citizens.

Unilateral economic sanctions deprive these citizens of access to their basic human needs, such as nutrition, shelter, healthcare, and, above all, their need for financial gain required to achieve a decent standard of living.¹⁴ On the contrary, unilateral economic sanctions tend to increase poverty rates in sanctioned states instead of accomplishing regime change.

This increase in poverty rates occurs because corrupt regimes tend to exploit their citizens in times of economic prosperity while remaining active members of the international community. Thus, when sanctions are imposed, these regimes typically find an alternative to foreign income by further exploiting their citizens.¹⁵

Moreover, due to the deteriorating economic conditions of sanctioned countries, sanctions decrease job opportunities for the working class. Business owners in sanctioned economies tend to compensate for their losses by minimising their workforce. Therefore, many working- class citizens in sanctioned economies need a stable household income.¹⁶

The elements mentioned are direct consequences of unilateral economic sanctions on sanctioned states’ citizens. The article attempted to show the correlation between unilateral economic sanctions and the economic conditions that could lead to a collective rise in poverty rates in sanctioned countries. The causation is due to citizens of sanctioned countries being unable to achieve the minimum standard of living due to their exploitation by corrupt governments, or the lack of economic and financial circulation in sanctioned states, all of which are directly linked to unilateral economic sanctions.

Therefore, unilateral economic sanctions can be ineffective, as shown by several examples, through their interconnected effects on sanctioned countries. In most cases, they do not deliver properly on their purpose of changing corrupt regimes or imposing a political change in a country. Instead, they weaken the countries’ economies, which later reflects in the socioeconomic state of citizens and how they are led into poverty. On the other hand, the socioeconomic state of citizens could also result from corrupt regimes exploiting them to survive and compensating for the foreign income they suddenly lack due to being sanctioned.

3.1.2 Еconomic inequality

This part illustrates how income inequality is harmed and damaged by the imposition of unilateral economic sanctions as it remains a global issue. Based on studies made by the Organization for Economic Co-operation and Development, global wealth is drastically concentrated in the hands of a few wealthy elites.¹⁷

The income inequality attempts to show the contrast between developing and developed nations. The latter show typical wealth accumulation while the prior tend to be exploited states. This wealth accumulation through exploitation of sanctioned states is seen throughout Iraq, DRC, and Syria. Economic superpowers’ exploitation of nations dates to the presence of colonial powers in the Middle East and Africa, having been a constant historical measure of wealth inequality between nations.¹⁸

Current political and corporate entities have continued the colonial exploitation of the past through the imposition of economic sanctions and the accumulation of wealth obtained from developing countries.¹⁹Unilateral economic sanctions restrict developing countries from trading in their national natural resources and, eventually, the circulation of currencies in their respective economies.²⁰ Instead, sanctioned states’ resources are either extracted through child labour or smuggled, or remain as unused reserves that a sanctioned state cannot sell or utilize due to their lack of an infrastructure, which could allow them to develop these resources further.²¹ As a result, sanctioned states are exploited for their natural resources.²² Consequently, elites in the states imposing sanctions accumulate the wealth gained from the illegally-obtained resources to strengthen their economies and increase their businesses’ wealth.²³

Unilateral economic sanctions pave the way for elites from states imposing sanctions to accumulate wealth obtained from developing nations which results in a disparity in the levels of wealth between both countries and, thus, the income inequality between them. The correlation between unilateral economic sanctions and income inequality lies in the environments created by the sanctions. Developing nations are robbed of their natural resources and states imposing sanctions accumulate wealth without compensating the sanctioned state. Unilateral economic sanctions create an environment where it is easier for international corporations to accumulate wealth from sanctioned states due to their citizens seeking cheap labour in the face of deteriorating economic conditions, which was the aim of the imposed sanctions. Moreover, the natural resources of sanctioned states tend to either be smuggled across their borders through a black market or are kept as unused reserves that do not provide the sanctioned states with revenue.²⁴ These consequences of unilateral economic sanctions deprive sanctioned states of revenue that could allow them to compete with other economies in the international community. Thus, they remain in a deteriorating economic condition that leaves them incapable of providing their citizens with a standard of living that matches a standard as seen in states that impose sanctions.

Sanctioned states suffer from exploitation and a lack of reparations that provide them with equity to reach the levels of their counterparts²⁵. Unilateral economic sanctions tend to have dire consequences in economies that do not influence a political change in the sanctioned states, but on the contrary, affect a culture of accumulating wealth and leaving a significant disparity in national income, extending to a discrepancy between the sanctioned states and the states imposing sanctions.²⁶

3.1.3 Healthcare

This section of the article will shed light on the damages caused by the unilateral economic sanctions placed on the healthcare system. Additionally, this segment will contend that sanctions should never be inflicted on medicine and medical equipment or on any other good or service that is required quickly, as it would have a direct negative impact on access to healthcare in the sanctioned state since it is a basic and fundamental human right that every single citizen deserves to obtain.²⁷ Furthermore, aside from the right to health, the ethical principle of justice requires access to equitable and affordable healthcare be guaranteed and secured at all times, regardless of who is in need or where the individual comes from.²⁸ Therefore, access to healthcare services is regarded as morally significant and a prerequisite for equality; it is right when it meets individual needs and there are no unfair, avoidable, or remediable health disparities between groups of people.

Several real-life incidents showcase the effect of unilateral economic sanctions on the healthcare system. In Iran, for example, raw materials required to manufacture medicines could not be easily imported from other states worldwide due to the restrictions enforced on the Iranian banking sector²⁹. It led to the unilateral economic sanctions on Iran, exacerbated specifically during the COVID-19 pandemic, demonstrating how public health emergencies can amplify the damages caused by sanctions. Sanctions aimed toward non-health sectors can also indirectly impact access to healthcare if the sanctioned state reduces funds allocated to healthcare in order to continue other activities, including military activities, raising complex questions about responsibility for harm to the sanctioned state’s civilian population and the role of humanitarian exemptions, or aid in conjunction with sanctions³⁰.

Another example that has proven unilateral economic sanctions destroy and damage sanctioned states is the National Survey on Living Conditions. The survey is usually conducted each year by three different Venezuelan universities. This survey has shown that the general mortality rate increased by 31% from 2017 until 2018, and this resulted in over 40,000 more deaths. Additionally, it was calculated that more than 300,000 people were at high health risk due to the deficiency of medicines and general medical treatment. This includes, but is not limited to, approximately 80,000 patients who were diagnosed with HIV and did not receive any antiretroviral treatment since 2017, around 16,000 dialysis and cancer patients, and 4 million people diagnosed with diabetes and hypertension, many of whom cannot obtain insulin or cardiovascular medicine³¹.

Nutritional issues continue to be serious and widespread as there are severe cases of malnutrition, such as kwashiorkor or marasmus, in paediatric wards across the country.³² Based on that account, the Food and Agriculture Organization launched three missions where they visited paediatric hospitals throughout Iraq. During the missions, they consulted doctors, visited wards, examined medical records, and observed the general state of the hospitals, including drug and medicine availability. Indeed, the results showed a need for greater access to medical equipment, medical services/care, and medicine (drugs).³³ Another mission focused primarily on adult malnutrition. The results of the survey administered by the Food and Agriculture Organization in 1997 showed that, in over a thousand adults in Baghdad and Kerbala that had their weight and height measured and their body mass index (BMI) calculated, significant levels of malnutrition were discovered among the Iraqi population, particularly among adults under the age of twenty five who had limited food availability and poor health conditions during their years of growth.³⁴ For instance, 26% of young men were significantly underweight, compared to less than 5% in a normally-fed population.³⁵

Further missions were conducted related to water sanitation. Water is one of the essential sources a country needs for its citizens. However, the fundamental reason for having limited access to water in Iraq is the scarcity of spare parts for machinery and equipment that cannot be purchased without foreign exchange. Furthermore, many items, including chlorine for water purification, require specific sanctions’ committee approval.³⁶ The results of these issues were reflected in the mortality rates data in Iraq, issued by UNICEF between 1960 and 1998, showing values for under five years of age and infant mortality rates (deaths per thousand live births) in Iraq.³⁷ The data clearly show that mortality rates fell steadily from 1960 to 1990 but then increased after 1990 due to the sanctions’ effects throughout society.³⁸ For south-central Iraq, under-five mortality rates more than quadrupled, from 56 to 131 between 1994 and 1999, but in the autonomous northern area, it increased from 80 to 90 before falling to 72 between 1994 and 1999.³⁹ According to UNICEF, between 1991 and 1998, there may have been 500,000 more deaths of children under five than what is currently known.⁴⁰ In brief, the strict embargo on Iraq has significantly impacted food availability, nutrition, and health, particularly for young people.

The negative impact of unilateral economic sanctions on the healthcare sector is most clearly seen through a rise in mortality rates, specifically of children, in sanctioned states. The embargoes placed on states deprive them of medication and medical equipment, hindering the necessary protocols that must be taken to treat patients and ultimately decreasing the life expectancy in the sanctioned country.⁴¹ Furthermore, sanctioned states’ already deteriorating economic conditions do not allow them to allocate their resources to the healthcare system or invest in expanding the sector to provide treatment and care to patients.⁴² Instead, sanctioned states, which tend to be governed by tyrannical regimes, accumulate their limited resources and allocate fractions of the nation’s GDP to sectors that provide healthcare to citizens or other services internationally deemed to be human rights.⁴³ Most notably, between 1990 and 2003, Iraq’s government only allocated 2.8% of its GDP to the healthcare sector.⁴⁴

In contrast, after the sanctions were lifted in 2009, the rate increased to 8.4% of the country’s GDP⁴⁵. Iraq’s example proves that unilateral economic sanctions are a means of soft warfare against states to restrict their economies.⁴⁶ Still, the repercussions are always inflicted upon citizens by harming vital sectors, such as healthcare, thus having similar consequences to warfare by increasing mortality rates and decreasing life expectancy.⁴⁷

The United Nations Office of The High Commissioner for Human Rights released its recommendations by a Special Rapporteur on unilateral coercive measures, outlining several recommendations to banks and other financial service providers, requesting that they make certain exemptions during embargoes to ensure the delivery of human rights in a sanctioned state, yet maintaining a certain degree of political and economic leverage against a sanctioned state when necessary. The fourth recommendation encourages financial service providers to ease the free flow of payments on necessary goods and services to maintain the basic needs of a sanctioned population and ensure the respect of their human rights⁴⁸. This recommendation supports the correlation between unilateral economic sanctions and their negative impact on the healthcare sector in sanctioned states. Moreover, it supports the causal link between the two as it has established a guideline to prevent future violations of human rights during the imposition of sanctions, as well as to ensure the sanctioned population’s access to goods and services necessary to support basic human life, such as medication, medical equipment, and a healthcare system that can deliver and utilize them.

We would like to show the correlation between unilateral economic sanctions and the healthcare system, and how they lead to inequitable and unaffordable healthcare in sanctioned countries. Unilateral economic sanctions can be ineffective and damaging by preventing sanctioned countries from accessing the resources to maintain the efficiency of their healthcare system, thus seeing the decrease in life expectancy and the increase in mortality rates. Theoretically, and in most cases that happen around the world, they do not achieve their main objectives but, rather, deprive the citizens of their fundamental right: access to healthcare.

3.1.4 Access to education

Unilateral economic sanctions harm and affect the educational system in a sanctioned state. The Iraq case is important to understand as it shows the harmful impacts of unilateral economic sanctions enforced on such states. The crash of the Iraqi economy, as a consequence of the sanctions, has caused a high unemployment rate in addition to hyperinflation and devaluation of the local currency. Therefore, in many cases when children drop out of school to support their families financially, and often seen with increasing price rates and the shortage of adequate jobs, families tend to resort to the extreme when earning an income.⁴⁹ However, in April 1999, a sponsor was granted by the American Friends Service Committee (AFSC) with a mission to examine the consequences and impacts of sanctions on Iraq’s educational system. Based on the observations and assessments, it has been concluded that the sanctions have seriously jeopardised Iraq’s ability to provide fully subsidised, high- quality education to all children. Moreover, due to the war with Iran, Iraq’s educational system began to deteriorate in the 1980s.

Additionally, the 1991 Gulf War and the ensuing sanctions accelerated this decline and precipitated the current crisis. Nevertheless, after almost thirteen years of sanctions, the aspiration to learn remains within the spirits of the Iraqi citizens.⁵⁰ Additional assessments and observations have been done, and the results prove that the Iraqi teachers, who were once highly-respected and well-paid professionals, now earn $3 per month on average. In the past, the salary was approximately $450.⁵¹ Furthermore, teachers received benefits and cash advances to help them buy land. Nowadays, teachers must either change professions or work a second job to supplement their income.⁵²

Unilateral economic sanctions also deprive people of accessing online information databases, which could hinder research in universities and institutions seeking to develop technology, civil society, and education. In addition, the sanctions deny individuals opportunities for personal development through access to resources that could lead to collective progress by access to information of companies and universities. An example of this deprivation would be the United States’ sanctions on Sudan. The U.S. sanctions on Sudan triggered a severe cycle that led to the children dropping out of schools due to sanctions, leading to high unemployment rates and worsened financial status. On a larger scale, U.S. sanctions led to universities, schools, and companies suffering from a lack of access to information due to sanctions closing the resources, such as the Massive Open Online Courses (MOOC), provided by websites like Coursera that deliver classes from top universities, thus leading to a lack of personal growth in Sudan as well as a collective lack of any access to resources that provide information used for research by universities and companies. The consequences of this lack of access to information resources are reflected in Sudanese universities publishing little to no research, and the worsening educational infrastructure as the sanctions continue. Moreover, it affects citizens individually by preventing access to personal development resources and abandoning their education due to their economic conditions.⁵³

The imposed unilateral economic sanctions impact the education system. High unemployment rates, hyperinflation, and devaluation of local currency drive this effect on education. It has been proven that enforced unilateral economic sanctions are ineffective and cause more damage to the sanctioned states, specifically, and among other areas, in the education sector. Unilateral economic sanctions affect sanctioned states’ education institutions on a collective scale and citizens on an individual scale.

3.2 Effect of unilateral economic sanctions on economies

This section tackles the features of the economy by emphasising and correlating them to the impacts of unilateral economic sanctions. The economy is defined as the system of interrelated production and consumption activities that ultimately determine the allocation of resources within a group. The need for goods and services in society is being fulfilled by production and consumption.⁵⁴ The economy has an essential role and impact on both domestic and international levels as it affects governments, households, families, businesses, and the world’s resources.⁵⁵ States imposing unilateral economic sanctions harm and damage the economy of the sanctioned country and other countries worldwide. This will be further discussed in the upcoming parts of the article.

3.2.1 Еconomic growth and gdp

Unilateral economic sanctions can cause abrupt declines in economic growth and the GDP of the sanctioned country. Economic growth is defined as the increase in a society’s production and consumption of financial products and services in quantity and quality.⁵⁶ Whereas gross domestic product (GDP) is the standard measurement of the value added produced by the production of products and services in a country over a specific period.⁵⁷ Both elements support the flow by maintaining a stable economy in the country. However, when unilateral economic sanctions are inflicted, they cause a decrease in economic growth and in the GDP, leading to an economic crisis. Sanctions may negatively impact the economic performance of the target state that is being sanctioned through several means. The most prominent of these are a decline in exports and imports, the subsequent loss of negotiating leverage on global markets, and the contraction of international capital flows, or the cessation of foreign direct investment, foreign aid, and financial awards⁵⁸ . These negative impacts could still happen even without formal trade embargoes or international aid and financial flow stoppage. Often, political regimes are demonised symbolically with economic penalties⁵⁹. The associated reputational damage may isolate the target nation within the international community and discourage aid and investments from by donors.

In Africa, the U.S. imposed economic sanctions on Sudan in 1993. Sudan’s economy has undergone several deteriorations for thirty years due to sanctions, a civil war, and a tyrannical regime. Most notably, the U.S. sanctions constricted Sudan from social, political, or financial development. The constraint caused by sanctions is reflected in the country’s GDP and economic state. Sudan’s GDP contracted by 0.6% within less than a year, meaning a negative GDP led the country into recession, and a fiscal deficit of 4.4%. These are indicators of an economy going through a recession, and economic sanctions that imposed international and domestic borrowing constraints on Sudan have deprived the country of competing in the international market with its North African neighbours⁶⁰.

Moreover, unilateral economic sanctions on Sudan caused inflation rates to rise to 36%. The highest acceptance rate is 3%. This caused the country to lose 76% of its revenue sources. Thus, a deficit in Sudan’s revenues, in addition to a contraction in its GDP and GDP per capita, pushed the country into a recession, an occurrence that is directly linked to the sanctions imposed on Sudan since there was an absence of an international investment climate that could foster the growth of the sanctioned economy. Granted, the recession was also due to Sudan’s misallocation of resources⁶¹. However, more stimulation was required in the private economic sectors through foreign direct investments to promote long-term economic growth⁶².

Economic penalties imposed on states through unilateral economic sanctions have dramatically affected the overall GDP and GDP per capita. Individuals are affected by the deterioration of economic conditions on different scales, and the working class suffers the direct consequences. A lack of international capital flows and foreign direct investments deprives states of stabilizing their GDP and, thus, deprives individuals of access to the wealth generated by capital flows and foreign investments. This deprivation has been shown in many examples, such as in Venezuela where unilateral economic sanctions have deprived the state from partaking in international trade and generating revenues, despite having the world’s largest oil reserves. Consequences of this reflected on the state’s GDP and GDP per capita as individuals suffered from an inability to engage in commercial transactions due to the Venezuelan Bolivar losing its value in the international market, considering its direct link to the state’s oil reserves (which the GDP was reliant on). The Venezuelan government’s revenue from oil export receives almost every vital foreign exchange to import products necessary for healthcare and energy.⁶³

3.2.2 Increase in inflation rate and currency devaluation

Unilateral economic sanctions impact the inflation rates and simultaneously attempt to find direct causation. The sanctions are directly linked to increasing inflation rates and losing a currency’s value. Such a correlation is seen to have further consequences on food security. It becomes a penalty imposed on civilians, as is the case of the Caesar Act’s effect on inflation in Syria. ⁶⁴ Sanctions also show an impact on already deteriorating economies, that could otherwise recover from inflation, by leading them into a state of hyperinflation, as was the case in Venezuela following the sanctions imposed by the U.S. in August 2017.⁶⁵ Unilateral economic sanctions inevitably lead to rising inflation rates, considering the result occurs regardless of a state’s economic condition before the sanctions. However, the consequences seem more severe when implemented in states suffering from an unstable economy due to warfare or inflation rates preceding the sanctions. The rationale behind sanctions leading to an increase in inflation rates refers to the process of states imposing an ‘Inflation Tax’ to fill in the gaps left by an increase in spending while revenues remain the same; thus, states impose the inflation tax by printing money as revenue raised by governments to its deficit.⁶⁶ The government of the former Republic of Yugoslavia used the inflation tax mechanism following sanctions and has been repeatedly replicated by other governments suffering from inflation due to unilateral economic sanctions.

In Yugoslavia’s example, the inflation tax was a method by which the state sorted out its deficit between the state’s access to liquidated assets (cash currency) which was not covered, and the provision of cashless loans, such as bonds, that were received by both the public and corporate sectors at permanently higher rates in order to preserve its revenues’ real purchase power and maintain a balance through their decrease due to growing prices. The state then collects the margin between the money’s value during the time of its allocation in the public and private sectors and the decreased value of the same money applied later (during payment for goods and services), therefore, the revenue of the state equals the inflation which occurred between the two points. The inflation tax successfully controls inflation rates in more stable economies. However, in larger scales and unstable economies, an inflation tax could lead the economy to hyperinflation. Yugoslavia’s implementation of the inflation tax was in a hyperinflation setting while the country was undergoing extreme economic and political shifts, as well as an armed conflict that led to the imposition of economic sanctions on the former Republic of Yugoslavia⁶⁷. The consequences of an inflation tax while the country was being sanctioned under severe conditions caused the inflation rate to rise to an extreme due to people reducing their actual holdings of liquidated assets and money, in turn, the monetary base becomes increasingly costly to hold. Eventually, the actual monetary base falls to extreme measures, and, simultaneously, so do the inflation tax revenues accumulated by the government to parallel levels. In 1993, the Yugoslav government reached a staggering monthly inflation rate of 4667%, thus reaching an extreme case of hyperinflation due to its sanctioned economy during unprecedented conditions⁶⁸.

These examples reflect a clear correlation and causation between unilateral economic sanctions and an increase in inflation rates due to trade restrictions inducing inflation. In contrast, trade openness decreases it⁶⁹. A state restricted from freely trading with other countries will be met with a lack of capital flow that results in higher spending than revenue, which leads to currencies losing their value and, eventually, sanctions will lead these states to resort to printing money through imposing an inflation tax to recover from inflation. However, if sanctions continue to be imposed, states’ economies tend to suffer higher rates of inflation because the money printed is not circulated or utilized in international markets and, therefore, lose the value they once held. Consequently, a host economy’s inflation rates are fuelled by unilateral economic sanctions until they reach hyperinflation. It is more difficult to recover from hyperinflation as it can have dire consequences on a country’s GDP and GDP per capita.

Unilateral economic sanctions show a negative impact on inflation rates in host economies. The consequences of sanctions can be seen in the changes inflation rates go through in a host economy and how they reflect on public financial policies taken by host economies. For example, inflation taxes are imposed to recover from sanctions and rising inflation rates to fill the deficit between spending and revenue. Still, such a tax can only succeed if the state can trade freely to compensate for such a deficit, so sanctions hinder the countries from reaching a point of recovery and could lead them into hyperinflation.

3.2.3 Effect on agriculture, rural areas, raw materials, and resources

We are going to observe the consequences of unilateral economic sanctions on a sanctioned state’s resources, including agriculture, raw materials, and energy sources such as oil. Unilateral economic sanctions generally prevent a sanctioned state from trading its resources because a trade embargo is meant to cut economic ties between a sanctioned state and the international market. In precedence, unilateral economic sanctions are a reason a state’s GDP is highly affected. They possess a massive reserve of resources yet need to obtain profit or revenue from selling them to other states. Certain countries rely heavily on their agricultural output for international trade, whilst others rely on natural resources, such as oil and natural gas.

In most cases, developing countries only possess a few alternatives to their trade resources and a state’s income is strictly reliant on one resource. Unilateral economic sanctions constrain a sanctioned state from trading in its limited variety of resources. As a result, they restrict the state from gaining any revenue that could aid in its economic development. Thus, the consequences of unilateral economic sanctions are later reflected in a state’s GDP decreasing due to a deficit in revenue from a lack of engagement in international trade.

Sudan, known as Africa’s breadbasket, was a significant exporter of agricultural goods. For example, Sudan was a major exporter of sugar in the region, the third biggest producer in Africa, until the imposition of sanctions in 1997. Studies show that Sudan’s production fell from 365,395 tons in 2009 to 271,077 tons in 2014, a 25% decline in production due to the sanctions affecting the country’s trade in sugar. This decline in production rate also occurred because farmers needed help to purchase farming equipment since the 1997 sanctions were imposed. Between 2012 and 2014, Guneid farms, a major Sudanese producer of sugar, saw its production rate fall by 20% due to the sanctions restricting farmers from purchasing new equipment to run an efficient farming process. As a result, the sanctions affected 80,000 Sudanese families in the area surrounding Guneid who relied extensively on farming as a source of income⁷⁰.

Sudan also had oil reserves, one cause behind the civil war with the south. It could industrialise its reserves and engage in foreign exchange to increase its revenue through oil reserves that were extracted from oil fields in South Sudan. The North African country’s industrial production rose from 7% in 1956, when Sudan gained independence from the British Empire, to 24% until the 1990s. Only after the sanctions were imposed on Sudan in 1997 did the country’s production fall to a rate of 16-17%⁷¹. Following the south gaining independence from Sudan in 2012, South Sudan emerged as a new state, and (North) Sudan lost the foreign exchange and revenue of 350,000 barrels of oil per day from the South Sudanese border. More specifically, Sudan lost 10% of its GDP, 75% of its foreign exchange, and 50% of its budget revenues. This impact on the Sudanese economy primarily came from the economic sanctions imposed on the state. Its industrial and agricultural production rates were already affected by the sanctions and the lack of any foreign exchange, but losing a third of its land only accelerated Sudan’s fall to an extreme recession by losing a considerable portion of its resources. The unilateral economic sanctions imposed by the U.S. on Sudan had dire consequences as they prevented the country from profiting from its resources and hindered its rate of industrial and agricultural production, thus constricting the country’s economy and harming its GDP and GDP per capita⁷².

In another example, Venezuela possessed the world’s largest oil reserves. Venezuela relied on the foreign exchange of their reserves to import almost all medicine, food, medical equipment, and equipment needed for electricity generation and energy. Therefore, a restriction on trading Venezuela’s oil reserves would naturally become a restriction on Venezuela importing such essential and life-saving goods. In 2017, the U.S. imposed sanctions on Venezuela, restricting the country from trading in its oil reserve. The sanctions briefly adversely impacted oil production; however, in August 2017, an executive order from the U.S., introduced by the Trump Administration to pressure the Venezuelan government, led Venezuelan oil production to crash, falling to rates below three times the production rates of the previous twenty months. As a result, Venezuela lost over $6 billion in oil revenue that the state used to import essential goods for its citizens.

This section has covered the consequences of unilateral economic sanctions on a country’s agricultural and industrial production, as the sanctions harm citizens by either depriving a state of engaging in foreign exchange and hindering the production process, which could lead to citizens losing their jobs, or by harming a country’s revenue used for the importation of essential and life-saving goods. This impact that unilateral economic sanctions hold to restrict states from international trade and impose a constraint on their economies ultimately leads to the consequences on a civilian level and essentially infringing their human rights⁷³.

3.3 Effect of unilateral economic sanctions on international trade and diplomacy

International trade and diplomacy are intertwined with the impacts and consequences caused by the enforcement of unilateral economic sanctions. They tend to have dire consequences on international trade and a state’s foreign trade, specifically. Thus, the article will attempt to identify how unilateral economic sanctions halt a globalised mission of international trade while simultaneously hindering a sanctioned state’s ability to trade in its resources and goods with foreign partners, therefore, having severe effects on its economy, GDP, GDP per capita, currency, and revenue generated from traded national resources. The political aspect, or legal concept, tackles the relations between states, for instance, as seen in international trade and diplomacy. Unilateral economic sanctions directly influence a sanctioned state’s relations with other countries through blacklisting and secluding its economy, making it an isolated state with a reserve of resources that it cannot trade in because of sanctions affecting the country’s international status in the market and, at times, threatening to impose sanctions on the sanctioned state’s trade partners as well, such as the case in Syria, which the article will elaborate on further. Additionally, the article will research a correlation between unilateral economic sanctions and the severing of diplomatic ties between a sanctioned state and its trade partners.

3.4 Determining the effectiveness of lawful unilateral economic sanctions

The purpose of unilateral economic sanctions varies depending on each case. Unilateral economic sanctions could be enforced to place a trade embargo on a state due to its political allegiance, agenda, or economic decisions, or to enforce a regime change when faced with dictatorial governments. By studying the effects of unilateral economic sanctions, we find that countries are affected in severe ways that harm their infrastructure and economy due to isolation from the international community, marginalisation, and economic constraints. The article has displayed materialised consequences of unilateral economic sanctions, such as declines in GDP, GDP per capita, inflation, and lack of access to healthcare, education, and other resources deemed to be a human right. Moreover, unilateral economic sanctions affect countries diplomatically within their foreign trade. This is because unilateral economic sanctions ultimately place a trade embargo on a country, thus secluding it from other nations. The paper has shown how Venezuela’s oil reserve lost almost its entire value due to the state being incapable of trading its oil with trade partners after the sanctions were imposed, as well as how the Sudanese infrastructure continued deteriorating after the sanctions were imposed, thus affecting the country’s agricultural and industrial production. Unilateral economic sanctions’ consequences seem more dire when they affect a population’s access to human rights, such as education and healthcare, where foreign diplomacy is necessary to secure a decent life for the population, and when ensuring they are provided with the minimum standard of living. Sanctioned states are deprived of such standards when the sanctions imposed on them remove their relations with other countries, thus severing their economic and diplomatic ties with all states and completely isolating the country from foreign aid or trade to provide citizens with any form of improvement in the sanctioned state’s economic conditions. The Caesar Act imposed on Syria by the Trump Administration is a prime example of a state’s isolation. The sanctions were not only imposed on Syria and the Syrian regime, but on any trade partners that had relations with Syria, meaning the sanctions would also be imposed on Syria’s trade partners, individuals and entities, for any trade or form of diplomatic relations maintained with Syria. The Caesar Act’s consequences are further reflected in the lack of foreign aid received by Syria even in times of natural disasters⁷⁴. This year, Syria suffered an earthquake that destroyed significant cities and it was necessary to supply Syria with foreign aid to save the victims’ lives. However, following the earthquake, a question arose whether the Caesar Act should be lifted to supply Syria with humanitarian aid, even if it meant dealing with the Assad regime⁷⁵. The mere questioning of whether humanitarian aid should be sent to a country to combat a dictatorial regime has been criticised as a sign of the ineffectiveness of unilateral economic sanctions. Syria is a prime example. After twelve years of an internal armed conflict, with foreign intervention, the Assad regime remains in power, yet the people suffer from natural disasters, dictatorial oppression, and deteriorating economic conditions caused by the sanctions constraining the country’s economy. This state of the civilian population within a completely politically- isolated state, while the dictatorial regime continues to enjoy the privileges of healthcare and accumulating wealth, reflects the ineffectiveness of unilateral economic sanctions and proves that the consequences are rarely inflicted upon the regime that should be subject to change, but the already oppressed population by an exploitative regime suffers.

4 CONCLUSIONS

Unilateral economic sanctions harm the civilian population of a sanctioned state severely and fail to achieve their goals and are ineffective when imposed on target states. Access to essential resources is a fundamental human right; any deprivation of these rights could be life-threatening. Unilateral economic sanctions lead to human rights’ violations without fulfilling their political goals, and, instead, they punish civilians for the actions of corrupt governments. Unilateral economic sanctions also have dire consequences on a target country’s GDP, which is later reflected by the civilian population and the target state’s revenues from international trade. Finally, unilateral economic sanctions isolate a target state from the international community and deprive it of engaging in international trade, thus, ruining a target state’s diplomatic relations.

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Authors information

Fatima Abdulatef Halawani

Legal Researcher, Prince Sultan University, College of Law, Riyadh, Saudi Arabia fatma.halawani@gmail.com https://orcid.org/0009-0002-2683-1649

Corresponding author, responsible for writing and research.

Disclaimer: The author declares that her opinion and views expressed in this manuscript are free of any impact of any organisations.

Translation: The content of this article was translated with the participation of third parties under the authors’ responsibility.

Guest Editors of the Special Issue: Dr. Mohammed Albakjaji, Prince Sultan University, and Dr. Maya Khater, Al

Additional information

This article was prepared as part of the scientific project ‘Justice in the context of sustainable development’ Project No. 22BF042-01 (2022-2024).

About this article

Submitted on 09 Apr 2023 / Revised 1st 20 Apr 2023 / Revised 2nd 5 May 2023 /

Approved 09 May 2023 / Published online: 25 May 2023 / Last published: 17 Jun 2023

1. Introduction – 2. Literature Review. – 3. Impacts and Consequences of Imposing “Unilateral Economic Sanctions” on Disputing States. – 3.1 Effect of Unilateral Economic Sanctions on Human Rights. – 3.1.1 Poverty. – 3.1.2 Economic inequality. – 3.1.3 Healthcare. – 3.1.4 Access to Education. – 3.2 Effect of Unilateral Economic Sanctions on Economies. – 3.2.1 Economic Growth and GDP. – 3.2.2 Increase in inflation rate and currency devaluation. – 3.2.3 Effect on Agriculture, Rural Areas, Raw Materials and Resources. – 3.3 Effect of Unilateral Economic Sanctions on International Trade and Diplomacy. – 3.4 Determining the Effectiveness of Lawful Unilateral Economic Sanctions. – 4. Conclusions.