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Economic Sanctions: (EAC Report)

My Lords, this report and debate are very welcome. The impact of economic sanctions is an important and highly topical subject. As the report points out, since the end of the Cold War, the international community as a whole, acting under the charter of the United Nations, has had increasing recourse to what was, until that time, a virtually unused instrument in the diplomatic tool box. Before and since then, unilateral sanctions lacking that legitimacy have been tried on a number of occasions. We have a considerable case history and plenty of lessons to be learnt, if only we are capable of learning them and willing to do so. I thank the noble Lord, Lord Wakeham, and his colleagues on our Economic Affairs Committee for this valuable and perceptive piece of work. If I have a general complaint, it is that the report tends to underestimate—perhaps understandably, given that its terms of reference related to the economic impact of sanctions—the potential political effect of sanctions, however modest their economic impact is, and largely to overlook the important consideration that economic sanctions are almost the only rung in the ladder between mere diplomatic action and the use of force. Surely after the experience of recent years we must recognise that the use of force must remain a last resort—perhaps a later resort than it has been in recent years. Looked at in that light, it would be folly to abandon this tool or simply to accept as a given the imperfections and weaknesses revealed by its operation to date. The international community needs to have more effective sanctions—not none or ineffective ones—at its disposal if the world is to move closer to being rid of the scourge of war. Nor would the Herculean efforts that countries make to avoid being put under any economic sanctions at all, let alone draconian ones, seem to bear out entirely the view that the noble Lord, Lord Wakeham, has just expressed that light sanctions packages are as ineffective as their critics would make out. Burma is a case in point, with the regime appearing to do all that it can to persuade Aung San Suu Kyi to give up her support for sanctions. Why on Earth should General Than Shwe do that if he thinks that they are totally irrelevant? In my view, the report deals fairly with the issue of comprehensive economic sanctions, of which Iraq and Serbia remain so far the sole examples. It identifies the paradox that totalitarian or authoritarian regimes are best able to spare their elites from the impact of such sanctions, to ensure the maximum humanitarian collateral damage and to manipulate domestic and international public opinion to their advantage, and yet it is against totalitarian or authoritarian regimes that they are most likely to have to be used. That paradox cannot be ducked, nor can the fact that attempts to palliate the humanitarian effects of comprehensive economic sanctions will never be fully successful. It is tempting, therefore, to conclude, as some witnesses to this inquiry did, that the instrument of comprehensive economic sanctions should never be used again—tempting but, I suggest, wrong. I sympathise with the Government’s caution over discarding completely even such a blunt weapon as this. Can we envisage no situations in which comprehensive economic sanctions would be justified and might quite simply have to be used? I am thinking, for example, of the invasion and conquest of one country by another in defiance of Security Council resolutions or the threat of the use of nuclear weapons against a non-nuclear state. I could go on. I am sure that comprehensive economic sanctions should be used, if at all, more sparingly than in the past and with greater emphasis on the humanitarian side effects. To abandon totally their potential deterrent effect would be, I argue, unwise. The future clearly lies with more effectively targeted and better implemented limited sanctions. It was a pity that the report did not give a fuller analysis of one of the early cases of such targeted sanctions which actually worked—those imposed on Libya’s civil aviation and oil industries as a result of the Pan Am and UTA outrages. The sectors were clearly chosen with care and the action was proportionate; it impacted more on the elites than on the general population and it did bring about, or helped to bring about, policy change. Other cases of targeted sanctions have worked less well, as, one has to admit, have arms embargoes, which have proved notably porous. What is surely essential now is to focus hard on steps to improve the operation of such targeted sanctions. I look forward to hearing from the Minister, when he replies to this debate, just what the Government are doing to achieve that. One area of implementation that clearly requires urgent attention is the strengthening of the UN Secretariat’s capacity to analyse, identify and help to implement targeted sanctions. Each target country is different and requires in-depth analysis of its weak points. Each target country presents different problems of implementation. But currently there is virtually no capacity to provide an objective analysis of such matters before action is taken and when it is being implemented. Things are left to a tug of war between those on the Security Council who want tougher sanctions and those who want weaker ones. That is no way to get results. In 2004, the high-level panel on which I served made the following recommendation: "““The Secretary-General should appoint a senior official with sufficient supporting resources to enable the Secretary-General to supply the Security Council with analysis of the best way to target sanctions and to assist in coordinating their implementation. This official would also assist compliance efforts; identify technical assistance needs and coordinate such assistance; and make recommendations on any adjustments necessary to enhance the effectiveness of sanctions””." Kofi Annan endorsed that proposal. What has become of it? Do the Government support it? If they do, what are they doing to prevent it from being chucked in the dustbin? The report also raises the point of the basic ineffectiveness of unilateral sanctions imposed by one country and the capacity of such sanctions to lead to trade disputes following attempts to extend their impact through extraterritorial jurisdiction. US sanctions against Cuba are a classic case in point. Those sanctions have brought about neither policy change nor regime change in Cuba. They have embroiled the US with its allies and they have weakened the US hand at the UN, with successive humiliatingly massive votes against them each year. It is a great pity that Congress does not seem to have learnt the lesson about the counterproductiveness of such unilateral sanctions. At the other end of the spectrum, it is clear that economic sanctions imposed by a unanimous decision of the Security Council have by far the greatest political impact. Of course there may be—there often is—a price to be paid in the lower economic impact of such measures, given the compromises needed to achieve unanimity. But that trade-off can be worth making. It is a matter of judgment in each individual case. Somewhere in the middle of the effectiveness spectrum are multilateral economic sanctions that do not have the Security Council’s endorsement and therefore do not have worldwide mandatory force. Such sanctions would be, for example, those imposed by the EU and US in concert, acting in circumstances in which the Security Council was deadlocked. I do not agree with the view put to the committee by Mr Jeremy Carver that such sanctions should in all cases be avoided. Such sanctions are certainly more effective and less counterproductive than unilateral sanctions imposed by one country. The most important consideration in this case is to achieve the greatest possible unity between the EU and the US and other like-minded countries and thus to maximise the impact and to avoid damaging trade disputes. Probably the most important conclusion of the report is one of the simplest and the most political. Economic sanctions are no silver bullet. They seldom on their own bring about the policy changes sought. They need to be operated in tandem with a whole range of diplomatic instruments, including incentives for compliance by the targeted country, a clear statement from the outset of what action is required to get sanctions lifted and a willingness to discuss directly with the targeted country the security concerns that may have led it to take the objectionable action that is being sanctioned. Every one of those considerations is relevant as we contemplate the case for strengthening sanctions against Burma. I agree with some of the remarks made by the noble Lord, Lord Wakeham, on that, although it might be worth pausing for a moment, in criticising the existing sanctions, to think of the message that would be sent out if the international community now lifted sanctions immediately after the scenes in the streets of Rangoon that we saw on television. In the light of those compelling considerations, I found the Government’s response to the report’s recommendations on how to handle Iran’s nuclear transgressions pretty unconvincing and limp. The hard fact is that the US is applying this template and these criteria in the case of North Korea and that there are some—admittedly so far incomplete—signs that it is getting somewhere as a result. But in the case of Iran, it is not applying them. US-Iran contacts are so far confined to the problems of Iraq. It is no good saying, as the Government did: "““The need for explicit text on security assurances … had been overtaken by the clear and repeated public statements by the United States that, while not ruling out the possibility of taking military action, it was not considering military action and was committed to a diplomatic solution””." What is needed is not repeated and, I fear, highly ambiguous public statements but direct diplomatic communication. I hope that we will hear from the Government that they will urge this course on the United States as an integral part of any move to strengthen sanctions against Iran. It is absolutely vital that the United States should become a direct participant in a dialogue with the Iranian Government on these issues. I conclude with a reiteration of my thanks to the noble Lord, Lord Wakeham, and his colleagues for providing the occasion and such a sound basis for this debate. The subject of economic sanctions will not fade in importance any time soon. It is important that we understand it better, get to grips with its complexities and fashion a more effective instrument for the international community to use when needed.