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Economic Sanctions: (EAC Report)

My Lords, this has been a super-topical debate. I know that we always say these things are timely, but this one is right on the nail, given the horrific events developing in Burma, which we have not seen the end of yet. We must all be extremely grateful to my noble friend Lord Wakeham, his team and his committee for producing this report and for promoting the debate. My only comment on the Government response, which is also available to us, is the same as everyone else’s; namely, that it is a rather limp affair, consisting of a long list of paragraphs all of which begin with the point that the Government do not share the view of the committee on this, that or anything else. That does not take us very far. It is one of those reports that has obviously been written by a word processor. The obvious conclusion from this debate, and from any rumination on the whole sanctions scene, has to be that sanctions are a very mixed success. The noble Lord, Lord Brennan, and other noble Lords made a point that is made in the centre of the report. Sanctions, if they work, do not work in isolation from the whole menu of policies and pressures, from the diplomatic—as the noble Lord, Lord Hannay, said—to the openly forceful, and from the soft-power range of activities, right up to the range of hard-power activities which can be deployed in either a fully military or a semi-military form. Those conclusions emerge from this debate and, probably, any debate on sanctions. Whether they are good or bad, the UK is involved in a whole range of sanction regimes—our own, the EU range and UN sanctions activities. Right across this range there have been obvious failures where nothing has happened. There have been successes, in some sense, although the noble Lord, Lord Skidelsky, is right to remind us that it is extremely hard to measure what success really means. There have been weaknesses and strengths. Certainly, if the aim is merely to register disapproval, these are quite strong registers and messages. The key issue is whether sanctions hit regimes or people, or do they inevitably hit both, as my noble friend Lord Lawson argued? If the aim is to change behaviour or to make policy changes at governmental level, do they make the situation better or worse? The report strongly suggests that they make things worse. I shall turn to Burma in more detail in a moment. One cannot get answers to any of these things except by looking at examples, which the report does in a very interesting way. It looks at what went on in Iraq. One has to conclude that economic UN sanctions had an impact, but not of course in helping democracy or bringing benefit to the people in any way; however, there is evidence which the committee has that the then rulers of Iraq—Saddam Hussein and others—were influenced by the impact of and wanted to use the fact of the sanctions. That probably led to the scrapping of the programme of weapons of mass destruction in the early 1990s, which of course was missed spectacularly by our intelligence services and those of America and many others. Burma is in all our minds. We are reminded that a whole range of economic sanctions has been in place for years, including the UK’s range of sanctions, which are more extensive than many others in Europe; namely, trade and investment sanctions, and heavy warnings and discouragements from the Government about getting involved in Burma at all. Have sanctions helped? The report is blunt and says that they have not. They have hurt ordinary people and made zero impact on progress to democratisation, which is very much the view so eloquently put by the noble Lord, Lord Ramsbotham, and I sympathise. It is evident that all the cries of disassociation and disengagement stay away. Sanctions are much argued about, particularly on the so-called ““compassionate left”” of politics, but have had the opposite results and merely caused enormous suffering among a people who are longing for more contact, not less. Whether the sanctions work or not, at the centre of this is the truth—the inconvenient truth, if we can use that rather dreary phrase—that nothing in this region will work without China, India and Japan, and probably without Russia, on board and several other cutting-edge Asian countries. There are signs that China is being a little more helpful at the UN, which is welcome. But the reality is that economic sanctions cannot work on a partial western-only basis. For more than a decade some of us have tried to bring home to policy-makers in the Foreign and Commonwealth Office, think-tanks and elsewhere, which can think only in terms of Brussels and Washington, that the foreign policy community now must embrace the rising Asian powers. Perhaps that should be the ““risen”” Asian powers because they have already arrived. The Atlantic community is no longer the centre of the globe. We get bogged down in the regional politics of Europe at our peril. The report looks at Iran where sanctions have not had the slightest effect in limiting Iranian ambitions in the nuclear direction. I know that this raises the much broader question of what is to be done about Iran and how it is to be contained. We have to reconcile ourselves to the fact that it is obviously the future regional power in the area and has already caused an enormous amount of trouble and further destabilisation rather than further settlement of the Middle East. The report analyses other forms of sanctions in a very interesting way, which is very useful; namely, targeted sanctions, the famous travel sanctions, and financial and commodity sanctions. The conclusion is that targeted sanctions must hit their targets. Obviously, when we see dignitaries from Zimbabwe—or, indeed, Burma—travelling around, we have to ask whether these sanctions in any way are hitting their targets. Financial sanctions are very interesting and one is torn between views. With totally globalised and integrated financial systems and banking systems, does this make the operation of very precise sanctions against particular areas of an economy of a rogue nation more or less easy to put in place? My instinct is that with modern technology there are new and refined ways of making precision impact through financial and banking sanctions. But again we have to return to the bigger point made by my noble friend Lord Lawson. None of this will be of the slightest use unless the Asians take the lead, not merely that they co-operate. The western banking system, just like the western political system, or the Washington theory of hegemony, is no longer valid. It is the full co-operation of the rising Asian powers that is needed. As the noble Lord, Lord Newby, has just remarked, commodity sanctions work if there is a controlled and tightly policed and monitored system. We have had difficulties with conflict diamonds in that respect. One could argue for another form of sanction—I am not sure that it is mentioned in the report; namely, the suspension or withdrawal of aid programmes, which Japan is now considering. It is rather curious that Japan is now one of the major aid donor countries in the world. Its original post-war aid programme began in Burma as it sought to make reparations there, but it is now reviewing these programmes in order to put pressure on the regime. I do not know whether it will work, but it is thinking about that. Missing, surprisingly, from this otherwise excellent report is any reference to cyber-sanctions, which may be the most important part of the future of the sanctions system. Anyone who has studied Russian cyber-attacks on Estonia recently will have seen how immensely powerful these can be. This seems to be an important new area in Iran, which some people are looking at, but it does not seem to have reached policy-making at all. This may also be true for Burma. One of the first things that the junta did as the situation got rough the other day was to cut off internet links—or try to do so—but they may well find that it has cut off lifelines to its own regime as well. The reality, which is not widely discussed but is there, is that all Governments rely increasingly on network computer technologies and on mobile telephone networks and are therefore increasingly vulnerable to cyber-attacks. I hope that that has not escaped the minds of policy-makers, even of this Government. Those who say that there is no area between sanctions or military force are out of date. There is an area opening up now between conventional economic sanctions and the use of force, which could have devastating effect, paralyse Governments, cause suffering inevitably to populations but, above all, disable or undermine the efforts of governments to continue imposing strict and centralise regimes. Those are the thoughts that I have to add to the report and debate and I hope that they can be taken into account when the Minister replies. The conclusion of all of us generally is that sanctions are never the complete answer. They work differently in different circumstances and have to be supported by a whole range of other activities, which is the approach that we have to take. This debate and the report have helped us to focus on those issues more clearly.