The practice of economic sanctions has been relatively recent in international relations, though the twentieth century alone is particularly rich in such sanction incidents. The use of such sanctions grew in number from two instances in the 1920s to over 20 in the 1970s. These episodes prompted the adoption of a “new approach” in international affairs by statesmen representing states with a powerful economy. The new approach sought to apply economic pressure not so much on the offending country or parties, but rather on the things that the parties had done in violation of the resolutions adopted by the UN Security Council. This new approach sought to adopt a minimalist approach, and thus the practice of economic sanction was born. Today, the use of such economic measures continues to be strongly practiced.
There are different types of economic sanctions, though they all have the same goal: to decrease the damage that is caused to a country by another country’s actions. For instance, there are trade embargoes (a ban on certain goods coming into a country) and aid embargoes (the providing of certain goods to a country). A common trait in all the types of trade embargoes is the ban on transfer of certain resources or certain goods between two countries. Some examples include petroleum, which is required by all ships sailing to and from a certain country.
The most common instance of economic sanctions are the oil embargoes. There are currently six such instances. The recent escalation of the situation in Iraq and Iran at the present time serves as a case in point. Under the Bush administration, the United States was engaged in a program of economic measures against Iraq, in response to its invasion of Kuwait and the Gulf of Mexico.
When Iraq rejected the ultimatum put forth by the U.S., the United States immediately imposed a freeze on the export of petroleum products. This action caused a severe decline in exports, especially in petroleum products, which had previously accounted for over one-third of the gross domestic product (GDP) of both Iraq and Kuwait. Iraq subsequently, in turn, went on a buying spree of petroleum products. At this point, the United States, through the sanctioning of Iraq’s energy sector, decided to go after the vanek smith. Just to be sure, the United States Treasury Department provided details of the reasons for its decision on the matter.
Vanek Smith is a consultant with respect to alternative measures to counter the effects of inflation, in light of increasing commodity prices, and it is important for him to study the effects of increases in monetary value on the various sectors of the economy. He has also studied the impact of increasing monetary value on various countries. As a result, he has come up with a theoretical analysis of how various monetary changes can affect the production and distribution of income. According to Vanek Smith, the United States is currently undergoing a period of inflation with respect to the goods and services market. The effects of this inflation on various countries will depend on the extent to which various aspects of the economy are affected by this inflation, for instance: increase in the level of monetary value, fall in monetary value, increase in the rate of price level, and increase in aggregate demand, among others.
Economic sanctions are another way of dealing with undesirable inflation. Economic sanctioning is not a new concept. In fact, the United Nations has been in operation since 1920 when it was introduced for the same purpose as the current economic sanctions against Iraq. Economic sanctioning helps a country to achieve its objectives of reducing the rate of inflation or preventing a rise in rates of inflation, and at the same time help that particular country adjust to the impact of these changes.
Economic sanctioning may have different names according to the country or region where it is applied. For instance, in some cases, an organization may be forced to close its doors while in other cases, the decision of individual companies may be subject to review after a certain period of time. Asset freezes and other measures of non-trading are the most common ways of applying economic sanctions. In order to apply this type of economic measure, an international organization has to adopt some rules and guidelines that should be implemented by every member of the organization.
A number of different individuals, including members of the European Union, are attempting to get the European Monitoring and Support for Iran (PMI) and European Union financial sanctions against Iran reimposed. However, a recent article by David Drezner suggests that the Iranian regime may be trying to use financial tools and instruments of influence to strengthen its own economy. For example, he notes that according to some reports in the media, the Iranian Ministry of Industries is considering purchasing armored vehicles from China in an effort to improve the cash flow of the Islamic Republic. He further speculates that this purchase may be part of efforts to increase exports of manufactured goods to the Chinese market in an effort to increase the value of the rial, which is currently suffering from low oil prices. Both Iran and China are major customers for U.S. Treasury debt, so the purchase of armored vehicles may not be such a bad idea.