Pyramid Purpose Construction and Characteristics
Furthermore, it can also raise the credit costs. It can be in the form of asset freezes, travel ban, capital restraints, trade restrictions and arms embargo. Therefore, these are likely to deter the economic growth of the country or state involved. It can also have a general impact on the overall world economy. Thus, how effective are economic sanctions? What role do economic sanctions play in the global trade especially on arms trade? Economic sanctions have challenges that have left researchers questioning their effectiveness. Furthermore, it even prevented hard currency outflow as commodities are generally priced and valued in dollars, and since Moscow took a market-based playbook from IMF (International Monetary Fund). Moreover, the central bank of Russia lowered interest rates thereby giving companies in Russia a room to recover from the devastating economy.
According to Chang, today, Russia is even capable of producing more oil than it produced before it underwent economic sanction. Furthermore, what has made other countries such as North Korea and Iraq to continue surviving despite economic sanctions? The global economy is deeper hence given sanctions rests on the firms and banks concerns. Most firms and banks that North Korea is dealing have little or exposure to the United States. When countries such as Iran and North Korea survive economic sanction, it means it is not only ineffective but also threating world peace. This is because these countries realize that they can still survive despite economic sanctions imposed on them. They, therefore, tend to boost their military prowess by continuous missile tests and nuclear tests on international waters.
Besides, it boosts illegal arms trade with terrorist groups such as ISIS and Al-Qaida who disturbing world peace. Furthermore, terrorism increase world anxiety with frequent threats of attacks. However, there are some OPEC (Organization of the Petroleum Exporting Countries) members who lose as there is an increase in oil-flow in the world market but the impact is much less as compared to when an economic sanction is imposed. Besides, there is a decline in the world price of oil by almost 13% due increase in total amount of oil in the global market. This means there is a greater impact of economic sanctions not only to the countries involved but also to the overall global economic market. According to Hufbauer, et al.
, at times when economic sanctions are imposed on some countries and later lifted, those countries may avoid importing from the country(s) who imposed sanctions on them thereby providing other countries a competitive advantage in the markets. , the 1995 United States sanctions resulted in a reduction in exports to about 26 target countries leading to a variation of $15 billion to $19 billion. Thus, it could mean over 200,000 jobs reduction in case there could be no other markets offsetting an increase in exports. Thus, these suggest that when sanctions are imposed then there is a relatively high cost of an economy in the United States which also surpass the overall global economy as the US is a superpower and the global market prices are generally in terms of dollars.
One of the most recent events and the anticipated economic crisis is the United States and Canada circumstance. Canada turned to WTO since US threaten NAFTA (Bown). Furthermore, according to Lighthizer, the flood of imports from China and other countries would negatively impact billions of dollars in Canadian exports to the United States, including nearly $9 billion in exports of steel and aluminum products and more than $2. 5 billion in exports of wood and paper products. ”, (qtd in Bown). These create economic anxiety on the real and actual impacts as the Canadian counterparts also claims the United States has broken the Anti-Dumping agreement, the General Agreement on Trade and Tariffs, the Agreement on Countervailing Measures and Subsidies, and the Understanding of Procedures and Rules Governing Disputes Settlement of WTO.
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