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Mainstream, VOL LVII No 23 New Delhi May 25, 2019

Wider Implications of Sanctions

Sunday 26 May 2019, by Bharat Dogra

Sanctions imposed by the USA on oil exports from Iran and Venezuela have implications far beyond the more obvious and immediate ones.

One short-term and obvious implication is that economic problems of Iran and Venezuela will increase. This can also have political implications within these countries, particularly in Venezuela where people are suffering from very severe economic problems and there is a huge political crisis as well, including the US-backed efforts to overthrow the existing elected government.

Another short-term implication is that some other oil exporters, most notably the USA and Saudi Arabia, will earn much more from their oil exports.

From the point of view of oil importing developing and poorest countries, the sanctions will reduce their options and increase their economic difficulties.

However from the point of view of those concerned more deeply with world peace and committed to it, there are some wider medium and longer-term implications which are even more worrying.

These sanctions are obviously very unjust to the countries concerned and also very arbitrary.

If the USA persists in such arbitrary use of sanctions to inflict economic harm on those regimes it perceives to be unfriendly and to reap unfair rewards for itself and its cronies, then acceptance of its leadership of the world economy will also be harmed. Alongside, acceptance of the American dollar as the world currency is likely to be questioned more and more. This will be accentuated by the likely tendency of countries facing sanctions (or threatened with sanctions), or forced to buy more expensive oil, to trade oil and gas in other currencies.

At this point, the main question will be whether the currency crisis can be resolved in a peaceful way. This is a question that has to be faced at some point anyway, but the possibilities of its peaceful resolution in conditions of stability will be reduced by arbitrary actions like sanctions and the bitterness created by this.

The author is a freelance journalist who has been involved with social movements and initiatives.

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