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Economic Sanctions: (EAC Report)

rose to move, That this House takes note of the report of the Economic Affairs Committee, The Impact of Economic Sanctions (2nd Report, HL Paper 96). The noble Lord said: My Lords, although the committee’s report on sanctions was published in the summer, the terrible situation in Burma today and the calls from various quarters for tougher sanctions, mean that our debate is very timely. First, I thank my colleagues on the Economic Affairs Committee for their painstaking work on our report. As usual, the report is evidence-based and entirely non-party political, and has been agreed by all members of the committee. I also thank our specialist adviser for this inquiry, Dr Eric Herring, as well as our Clerk and his small team. I have to say at the outset that I find the Government’s response to our report very disappointing. The Secretary of State concedes one important point on exit strategies, to which I shall revert in a moment. But elsewhere in the response, along with a few points where there is room for honest difference of interpretation and judgment, I find a mass of fudge, evasion, and bald assertion, without either substantiation or even any real attempt to engage with the criticism. A few examples of issues raised in the report—not least Burma—will show what I mean. The committee recognised that sanctions, when combined with the use of other foreign policy instruments can, on occasion, contribute to the achievement of objectives. However, we also heard a great deal of evidence that sanctions were often ineffective or, worse, counterproductive. Burma may well be an example of counterproductive sanctions. We stressed the likely severe human cost of comprehensive sanctions, as in Iraq, and argued that the application of such sanctions is not compatible with the Government’s own principle that sanctions should, "““hit the regime rather than the people””." The Government’s response on this point is simply that severe suffering is not inevitable, that humanitarian exemptions can help to reduce the suffering in some degree, and that anyway it is the target Government who are to blame. None of those points seriously addresses the argument in the report, which demonstrates the very high likelihood that comprehensive sanctions on a ruthless Government will indeed lead to great suffering among the people, as in Iraq. The Government do not address the point that such sanctions are not compatible with their own principle of not hitting the people. It appears, unfortunately, that the Government are ready to discard that important principle when it is convenient to do so. Moreover, the Government reject our recommendation that some public account should be given of the United Nations’ assessments of the humanitarian impact of sanctions. No reason is given. Presumably one reason is to avoid embarrassing public criticism. I hope that the Government will think again on this. Without giving succour to target regimes, some public accountability in this area is essential. The committee heard evidence that sanctions are, "““often imposed in an ad hoc fashion in a rush””." There is little sense of how the objectives are to be achieved or of how sanctions will help. The conditions that the targets of sanctions need to meet to have them lifted—the exit strategy—are often too poorly worked out. The Government’s response is that since the 1999 Whitehall review, sanctions have had clearly stated objectives including an exit strategy. The progress in the development of clear objectives is welcome. However, our report stressed also the importance of having realistic objectives as well as a strategy for achieving them. On both counts, serious doubts remain. On exit strategies, the Government concede that those for EU sanctions, "““have not always been as explicitly stated as we would like””." But we found little evidence that the exit strategies existed at all. In any case, some sanctions still in place originate from before the 1999 review. For example, sanctions have been in place against Burma for more than 10 years with no discernible impact in terms of progress towards democracy and respect for human rights. Indeed, in some ways, the situation has deteriorated. Meanwhile, little seems to be known about how hard the sanctions are hitting the Burmese people. The Government maintain that the sanctions are targeted against the military regime with little humanitarian impact. Important measures such as the strong discouragement of trade and tourism are said to be not formal sanctions. This entirely misses the point. The effect is the same—to hurt the Burmese people. We were fortunate to be able to take evidence from the Minister of State in the Foreign Office. Dr Kim Howells said he felt ““deeply uneasy”” about the sanctions on Burma, which, he said, were ““not working very well””. These comments contrast sharply with the Government’s complacent response now. They describe current policy towards Burma, including the sanctions, as ““appropriate””. Dr Howells also called for, "““a much more vigorous international debate””," about how Burmese sanctions can be made more effective. Such a debate would almost certainly be served by a proper inquiry into the sanctions, as has been suggested by the committee. I very much regret that the Government have rejected the committee’s proposal. The Government argue that the sanctions on Burma are already subject to internal EU review each year. But these EU reviews are not made public and it is entirely unclear what, if anything, they are achieving. Perhaps the Minister will enlighten us later. Since the Government’s response to the committee’s report, the world has witnessed the brutal military crackdown against protesters across Burma. This has led the Prime Minister and others to call for renewed sanctions. The need for effective actions against an appalling regime and to help Burma move towards democracy is evident. But, as our report shows, sanctions against Burma have been an utter failure. Indeed, they may quite possibly have been worse than a failure. In attempting to put pressure on the regime, they may have made it even more recalcitrant. Of course, there is an evident political dimension and, indeed, a moral one to the situation in Burma, as elsewhere. The regime is so repugnant, and the plight of the people so dreadful that every political and moral instinct calls for urgent and effective action that reflects our outrage. But there lies the dilemma. Sanctions may appear a strong response, but do they work? All the evidence on Burma says no. It is evident that a serious examination of the effectiveness of the sanctions, and of other possible measures, is needed before new sanctions are introduced, however politically attractive these may appear. However, I recognise the difficulties in finding a productive way forward. The last thing the long-suffering people of Burma need is measures that make an awful situation even worse. The Minister stressed in the House earlier this week the recent change in the position of Asia, which had previously, ““turned a blind eye””, as he vividly put it. He saw this as significant. But I hope he will forgive me if I remain sceptical. The underlying geopolitical and economic realities behind the regional interest in Burma and the consequent ““blind eye”” remain unchanged. Turning to North Korea and Iran, our report argued that reliance on sanctions as the main means of resolving the current disputes was a recipe for failure. The Government claim that sanctions on North Korea are a success. But the alternative view put forward in our report seems to me far more plausible: that the key factor in achieving the agreement in February this year was the change in the Bush Administration’s position in recognising that a policy of reliance essentially on coercion would not work and that incentives were needed. On Iran, our report argued that the key strength of the EU’s proposed framework agreement was its emphasis on incentives rather than sanctions and its key weakness was the lack of US support. The Government say that US support is ““implicit””. But full support remains lacking and the situation clearly remains extremely difficult, not to say dangerous, as the French Foreign Minister was pointing out in the strongest terms only last month. Finally, I am sorry that the Government are not ready to introduce regular parliamentary review of sanctions, as we proposed. However, I welcome the Government’s commitment to expand their annual Written Ministerial Statement to Parliament to include the objectives for each sanctions regime. These Statements should also address the question of how far each sanctions regime is achieving its objectives, what changes in policy, if any, are required, and the exit strategy. I hope that the Minister will confirm that this ground will be covered in the annual Statements.