What Will Our Sanctions Do?

Oliver Bullough is concerned that America is helping Putin consolidate power:

Since coming to power, Putin has made it his goal to restore the Kremlin’s power: by crushing Chechnya, by cancelling elections, by controlling the media and by squashing over-mighty oligarchs who felt they could challenge him. A natural next step is to enhance his control over the remaining oligarchs’ money by forcing them to repatriate it. John Christensen, executive director of the Tax Justice Network, which campaigns to open up the shoal of tax havens that are all that remains of the British Empire, says that bringing the money home would both increase Russia’s tax take and improve the Russian economy by forcing businessmen to invest productively rather than in London property or U.S. basketball teams.

Jamile Trindle also evaluates the impact of the sanctions:

“The real potential damage to Russia’s economic future is self inflicted,” said Chris Weafer of Moscow-based consultancy Macro-Advisory, in a recent research note.

“The real damage from a prolonged conflict in Ukraine,” Weafer said, “may be to radically slow the inflow of much needed investment capital.” Weafer recently cut his forecast for the Russian economy in 2014 from 1.9 percent to 1 percent growth.

Investors’ cooling interest in Russia could make it more expensive for Russia to borrow money in international markets. Rating firms Standard & Poor’s and Fitch Ratings both downgraded Russia’s outlook from stable to negative, after the U.S. rolled out new sanctions Thursday. The Russian Finance Ministry has said it might delay plans to sell $7 billion in Russian sovereign bonds this year. Russian Finance Minister Anton Siluanov acknowledged Friday that Russia’s borrowing costs are going up.

Packer’s take on the Ukraine crisis:

A successful election in a stable Ukraine is half the battle against Putin’s aggression. The other half is deterrence. It would be naïve to take Putin at his word that Russia has no designs on territory outside Crimea. He needs an atmosphere of continuous crisis and grievance to maintain support at home, to distract his own public from the corruption, stagnation, and repression that are his real record as a leader. Deterrence can be designed to expose Russia’s weakness: non-lethal military aid to Kiev, escalation of sanctions against Putin’s cronies, and the ultimate threat of financially targeting Russia’s energy sector. But no strategy will work if the U.S. and the European Union don’t act together, and America can no longer simply expect Europe to follow its lead. That was a different era.

Lastly, Larison continues to ask why we are sanctioning Russia:

[W]hat is the purpose of the punishment beyond proving that it can be done? If a punitive approach makes Russia more antagonistic and intransigent, as it seems likely to do, how is that a desirable outcome? Another illusion that needs to be dispelled is the belief that punitive measures achieve anything other than increasing tensions and making conflicts in the future more likely.