When Russia invaded Ukraine in late February, 2022, Western nations adopted an unusual strategy of united opposition through economic sanctions against Russia.
The exclusion from trade and financial transactions with Western countries has caused some damage to the Russian economy, but not to the level initially anticipated. There are no signs of the Russian economy collapsing, and hopes that "economic sanctions could severely damage the Russian economy and end the fighting in a short period of time" are fading.
On April 8, the Central Bank of Russia announced that it would lower its policy rate to 17%, which it raised from 9.5% to 20% at the end of February, and would also ease restrictions on capital transactions.
The ruble's exchange rate against the dollar plunged immediately after the invasion of Ukraine, but has returned to its pre-invasion level since late March, reportedly because the deterioration of financial stability risks has ceased and the need to defend the currency has decreased. Although the ruble may fall again, Russia, which has maintained a current account surplus for the past decade or more, is increasingly seen as likely to have escaped a currency crisis.
Since the sanctions imposed by Western countries are not expected to be lifted unless the Putin regime changes, the situation is becoming one of a prolonged "economic war" between Russia and the West after the crisis has been resolved.
The economy has long been used as a weapon of war. Economic sanctions do not have the killing power of bombs and other weapons, but they can have a devastating impact on the enemy in the long run. Now that economic globalization has greatly increased, this nonviolent means of attack has become unprecedented in its power.
The world has become a web of networks of goods, money, and information, but the knots are not always uniform. The more interdependence grows, the more a country that has become a central hub is able to subordinate other countries by threatening to cut off supply.
Despite its dwindling share of the global economy, the U.S. boasts overwhelming power in the financial sector. Connection to the U.S. financial network is essential for cross-country economic activities, and the U.S. dollar accounts for approximately 60% of the world's foreign currency reserves due to its credibility as a reserve currency.
Under these circumstances, the unprecedented measures (weapons of mass destruction in the financial sector) of exclusion of Russian banks from SWIFT (Society for Worldwide Interbank Communications) and freezing of foreign currency reserves (U.S. dollars) were decisively implemented. The use of the U.S. position as a hub of international finance as a weapon has caused a major collapse in the structure of money interdependence, and there are fears that the globalized economy may be divided into smaller blocs in the future as a result.
Despite the escalation to an unprecedented level of economic sanctions against Russia initiated by Western countries, the legitimacy of these sanctions is rarely discussed. But is this really the right course of action?
As the state of the conflict drags on, the voices in the West accusing Russia of war crimes in Ukraine are only growing louder.
International humanitarian law mandates two principles to the warring parties: first, the use of force should be limited to the objective of destroying the military power of the opponent. Western media have reported daily that Russian forces are carrying out illegal attacks on Ukrainian schools, hospitals, and other civilian targets.
The second is that "the weapons that can be used are limited. Not only are nuclear and biological and chemical weapons prohibited, but also bombs with low hit accuracy and weapons with excessive killing power (e.g., cluster bombs), which are said to be in use by the Russian military, are prohibited.
In contrast, economic warfare (economic sanctions) is a very new phenomenon and therefore has no rules at all. The economic sanctions against Russia are broadly classified as (1) an energy import ban, (2) a high-tech product embargo, (3) asset freezes, (4) financial sanctions, and (5) suspension of new investment (The Nikkei, April 8, 2022), but there is no official list of economic "weapons", as there is with military weapons.
There is a strong sense that sanctions are being continually imposed out of a sheer "hatred of Russia" without consideration of the direct or indirect damaging effects that these sanctions may cause.
According to the Russian government, the number of sanctions imposed by Western countries has already exceeded 6,000, and sanctions are being endlessly strengthened. Former President Dmitry Medvedev, deputy chairman of the Russian Security Council, said on April 8, "The sanctions imposed by the Western powers are illegal and can be regarded as an act of aggression. It is a kind of hybrid war," and asserted that "illegal sanctions on an unprecedented scale are pushing international relations to an impasse and causing the collapse of international organizations, including the United Nations.
While we cannot support Russia's claims as they stand, the people who are most disadvantaged by the sanctions are the ordinary citizens of Russia and many people in developing countries who are being forced into hardship due to soaring energy and grain prices.
The philosopher Immanuel Kant argued in his book For Eternal Peace that "bloodshed can be prevented by increasing commercial transactions among nations and establishing a relationship in which both sides suffer losses if they fight," but it is no exaggeration to say that Western nations have begun to use "interdependence, which is supposed to prevent fighting," as a "weapon of mass destruction" in the opposite direction.
Economic sanctions do not mean that anything is permissible. As in a conventional war, we should hasten the establishment of rules to ensure that unrelated civilians are not adversely affected.