Israel's fury is disproportionate to the substance

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It’s not quite a golden rule, more a rule of thumb; but sometimes it appears that the degree of fury surrounding an issue bears an inverse relationship to the importance of the substance. Israel’s fury at the long-overdue statement by the UK government that sanctions will be imposed on imports from illegal Israeli settlements in the West Bank is clear and visceral. The UK’s condemnation of the illegality is welcome nevertheless; the attempt to conflate disapproval of illegality with antisemitism is nonsensical but just about par for the course. But what is the substance involved?

The amount of trade between the UK and Israeli West Bank settlements is hard to calculate, but certainly tiny. It’s not as if the ‘country of origin’ of settlement-grown dates is going to be emblazoned on the packaging as ‘illegal settlements in the West Bank’. There are rules, of course, banning such goods from being labelled as ‘product of Israel’, (although it seems to be a fairly widespread practice) and perhaps, as this report from the BBC suggests, the ban will act as something of a deterrent to that, although the co-operation of the Israeli authorities is something that maybe we shouldn’t rely on too heavily. Labelling them as having been produced in ‘Palestine’ is another route currently being used, and is accurate in geographical terms at least. One assumes that the intention of the UK government is not to target Palestinian-produced produce, but, again, that’s easier to say than implement.

Al Jazeera (not always the most reliable source, but this piece seems balanced and reasonably well-researched) estimates that total UK trade with settlements amounts to around £40 million annually, but the bulk of that is exports to the settlements (which are not covered by the ban), leaving a maximum of around £6 million annually in imports, a total which may well include goods produced by Palestinians as well as those produced by Israelis. Obviously, other countries imposing a similar ban (whilst facing the same problems of correctly identifying the affected goods) will increase the extent of the economic impact, but it still looks like pretty marginal sums.

It could be argued, not unreasonably, that it’s more of a symbolic gesture than an immediately effective one. No less welcome for that, but hardly an explanation for the ferocity of the response it has provoked. I suspect that the response is aimed less at undoing the sanctions being imposed now and more at mobilising opinion against any ratcheting up of sanctions in the future, when the current sanctions will, inevitably, have proved themselves to be of minimal effectiveness. How willing the UK Government is to go further in the face of that fury is the real test.

Imposing sanctions in baby steps

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The UK and EU are seriously discussing further packages of sanctions against Russia over the invasion of Ukraine, and trying to pressurise Trump into implementing further US sanctions as well. There does seem to be a feeling that the US Congress might be willing to impose further sanctions, although there is considerable doubt as to whether Trump will support it. Sir Starmer is doing his best to sound tough as he talks about ‘ramping up’ (one of his favourite phrases) economic sanctions against Putin and Russia. But hold on a minute. Over three years into a disastrous war in which hundreds of thousands have died, and there are still more sanctions which haven’t been applied yet? When he says ‘we will apply more sanctions unless you…’, what I hear is ‘we haven’t yet done everything we could’.

How effective sanctions have been – indeed, how effective they can ever be – is a question which people who can’t think of anything else to do don’t really want to discuss. The reasons for that are entirely understandable: if countries are unwilling to move to direct military aid of Ukraine, and if sanctions don’t force Russia to back down, then all that is left is a negotiation which will inevitably make concessions to Russia. It represents neither fairness nor justice, but if all that we can think of are sanctions, then we should seriously have been applying them to the maximum already. Tough talk without tough action simply condemns more Ukrainians to fight and die.

But here is the truth that they can’t or won’t admit: sanctions aren’t forcing Russia into backing down and probably never will. Telling members of the Russian regime that they can’t come to London (one form of sanctions which has been applied) isn’t actually the sort of punishment which makes them quake in their boots, and they are still obtaining most of the goods they require by other routes. There are three main reasons why sanctions are probably doomed to failure.

The first is that Russia is big. It has an abundance of natural resources, and is able to produce much of what it needs; maybe not in the cheapest or most efficient way, maybe not always to the same standards, but a big country will always be more resilient in the face of sanctions than a smaller one.

The second is that they are not being universally applied. There are still plenty of countries (including, of course, China) willing and able to supply Russia with the goods it needs. That actually reflects a deeper problem, which remains unaddressed: not all countries see the Russia-Ukraine conflict in the same simple terms as the EU / UK, namely an unprovoked invasion of one country by another. That’s not to say that they’re right in coming to a different interpretation, but whether they’re right or wrong is irrelevant to the ground fact that they are continuing to both buy and supply goods which are subject to sanctions by others. Many of us might regret that the world does not have an effective means of disciplining a rogue state, but regret doesn’t change the facts.

The third reason is that sanctions hurt the economies of those applying them, so companies are finding ways around sanctions. As trade with Russia has dropped, demand from countries aligned with Russia for the same goods has miraculously increased. Some of those countries are landlocked and the goods can only reach them by traversing Russia. The idea that they all get to their planned destination, or even that they all stay there when they arrive, is for the birds. Western companies are supplying sanctioned goods to Russia and pretending not to know, and their governments are pretending not to notice. And the capitalists make their sales and take their profits.

That sanctions will not, and probably cannot, achieve their aim is a dismal conclusion to draw, but if it’s what we are going to depend on, then implementing them in packages over a period of years and turning a blind eye to alternative supply routes doesn’t cut it. Sir Starmer’s projected strength is actually a cover for weakness.

How serious are we?

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To date, the EU has managed to sanction 680 individuals associated with the Putin regime, whereas the UK has managed to reach the grand total of 8. This is, according to the UK government an example of the way in which post-Brexit UK is ‘leading the world’. I wouldn’t like to speculate about the result if we weren’t world-leading. Unsurprisingly, the UK’s foot-dragging is leading to a certain amount of frustration in other European capitals who cannot understand why the UK, uniquely, is so willing to give the individuals enough advance notice to move their assets out before they get frozen. They obviously don’t understand Conservative Party funding. One Home Office minister, Damian Hinds, told the BBC that “it was not a competition”, a statement which would sound a great deal more sincere if his boss wasn’t always trying to present whatever the UK does as world-leading, a description which sounds more than a little competitive to me. (And, as an aside, I find myself wondering about the wisdom of allowing Russian billionaires to sell their assets to Chinese billionaires, as some of them are reportedly trying to do, as though that might not merely be storing up new problems for the future. For Ukraine, see Taiwan.)

Whether sanctioning individuals will be effective or not is another question; it sounds to me a bit like the old “we must do something – this is something” rather than a seriously thought-out attempt to influence events. A wider and more far-reaching trade embargo is more likely to have an impact, but is being weakened by the determination of some countries to continue paying hard foreign currency to Putin’s Russia for oil and gas (even if they’ve stopped trying to get exemptions for Gucci handbags). It’s easy enough to understand why a country like Germany (which gets around 49% of its gas imports from Russia) will be more reluctant to end the trade than the UK, which gets only a few percent of its total gas supply from that source. But if Europe, collectively, wanted to make a difference (and it’s a pity that the UK no longer even has a seat at the table, let alone that it takes an entirely selfish attitude), there are surely methods of sharing the pain. The ‘default’ scenario is that, if the gas is cut off, Germany loses almost half of its total supply, whilst the UK loses only around 4% of its supply. Without crunching the numbers in detail, and pulling a figure out of the air as an example, would the world be a better or a worse place if the countries of Europe agreed, in the short term at least, to share what gas is available from non-Russian sources so that everyone gets, say 80% (or whatever the percentage is when the numbers are fully analysed) of what they need? It would be painful for all, but the pain would at least be shared, and it might be a lot easier to get buy-in to shutting down the supplies on that basis.

I don’t doubt that some would argue that ‘we’ shouldn’t have to lose out because other European countries have allowed themselves to become dependent on an unstable trading partner (although I seem to remember them telling us in another context that ‘pooling and sharing’ is a good thing), but if that argument trumps the need to oppose blatant imperialism, then we might as well hand victory to Putin now and open negotiations about which other bits of Europe he wants. Supporting people through a period of high prices and scarcity would be expensive, but the pandemic surely proved that the availability of money really isn’t a problem in an emergency. And I note that no-one seems to be asking where we are finding the funds to ship vast amounts of armaments to Ukraine: as ever, the government can find money for things that they want to fund.

The question remains: how serious are we, really, about stopping Putin, and what are we prepared to sacrifice to achieve that?

Can sanctions really work?

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Some reports have suggested that the sanctions being imposed on Russia for its invasion of Ukraine are having a major impact on the Russian economy already, with interest rates rising, and banks running out of cash. It is comforting to believe that the sanctions taken to date are having a dramatic effect, but there is a danger of seeing what we want to see. The initial impact may be more a result of the suddenness than of any real underlying impact – and they certainly are nowhere near leading to any rethink by Putin. Some estimates – and it’s difficult to estimate accurately – suggest that the impact overall will be a hit of something like 4-6% to Russian GDP. That’s significant, but hardly crippling. As a comparison, the best estimates of the impact of Brexit on the UK are that it will reduce GDP by around 4%. That’s bad news – especially for those on lowest incomes, who will (as always) bear the brunt – but no-one is suggesting that it’s akin to the sort of economic collapse which would ‘force’ the UK to go begging to Brussels for readmission, to the Single Market if not to the Union itself. And a government which cares even less about the fate of ordinary people than the Johnson government, which is where Russia finds itself, is hardly going to lose much sleep over even the worst case 6% drop in GDP.

In any event, Russia has plenty of chance to mitigate the effects of at least some of the sanctions. The UK has kindly given the oligarchs sufficient advance notice for them to be liquidating their assets and moving them out of the UK, and those who keep their assets hidden behind nominee and shell companies in the UK’s myriad of tax havens have been given even more time to prepare by the snail’s pace progress of legislation to deal with those tax havens. Add to that those states in the world which are prepared to try and find ways around the sanctions, and the apparent determination of some European countries to continue buying – and paying for – supplies of Russian hydrocarbons, and the reports of the damage being done to the Russian economy look hopelessly over-optimistic.

Accepting the argument that military intervention leading to direct armed conflict with Russia is too dangerous to contemplate, we are left with nothing better than sanctions. But whilst sanctions could be strengthened considerably (moving rapidly towards a complete trade embargo) and action could be taken faster (preventing the movement of assets), sanctions have never proved to be an effective mechanism, and certainly not in a short time frame. More extreme sanctions, such as a complete trade embargo would hurt more. There would be a cost to ourselves as well as to ordinary Russians, of course – although nothing remotely comparable to the price currently being paid by the Ukrainian people. The biggest problem we face is international disunity as individual states try to protect their own peoples and interests. And the underlying cause of that comes down to the fact that we have a competitive world order rather than a collaborative one – it's driven, in effect, by an ideology which encourages selfishness. All of the problems likely to be faced by individual states as a result of more resolute international action against Russia could be resolved – or at least mitigated – by a willingness to share the pain equally rather than protect individual interests. Without that, we’re probably doomed to a long term war of resistance and attrition from which the biggest losers are the Ukrainian people and the only winners are the suppliers of armaments.

Dividing rather than uniting

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At the time of the Brexit referendum, the Brexiteers tried to sell us two wholly contradictory messages about the EU. The first was that ‘Brussels’ was over-ruling national governments, and the second was that the EU was inherently slow and inefficient at taking decisions, because they needed to co-ordinate and balance the interests of 28 member states with differing needs. They could never have been right on both, and the situation in Ukraine has shown that it was the second of those which carried the greater truth.

The question of dependence on Russian gas and oil is a case in point. It is certainly frustrating that, despite what are supposed to be crippling sanctions, so many European countries are still taking – and paying for – Russian oil and gas, thereby helping to fund Putin’s war. It is easy, though, for the UK government to demand that others stop the flow immediately when the UK itself has almost no dependency on Russian hydrocarbons. Demanding that Germany, Italy etc. damage their economies whilst remaining aloof looks like the typical selfishness which we have come to expect post-Brexit. Where is the offer to share, short term at least, the UK’s supplies so that the pain is spread more evenly?

It's also notable that, whilst demanding that other countries impose self-damaging sanctions, the UK is continuing to protect, through its network of tax havens and the secretive companies based there, dodgy Russian money, because that suits the interests of the UK finance industries (to say nothing of Tory party funds). And in the light of what is going to become a major refugee crisis on the European mainland, our offshore state chooses to wash its hands of the problem and demand that other countries bear the burden, presumably judging (and, sadly, probably correctly) that the voters to whom they wish to appeal are more interested in keeping foreigners out than in providing refuge to people in their hour of need. That’s two more examples of the essential selfishness underpinning Brexit.

I have my doubts about the effectiveness of sanctions against Russia, but I recognise that they’re the only game in town without risking all out war across the continent. But, to stand any chance at all, they need to be comprehensive; governments, and especially the UK, seem to be spending more time trying to work out what exceptions should be allowed than in making them maximally effective. Boris Johnson is still blustering away about how the UK is ‘leading’ on sanctions, but the reality is that the UK is, as ever, largely pursuing its own interests. And it no longer even has a seat at the table where the most important decisions are being taken (even if the process of taking them is slow and tortuous). Less Global Britain, more the weakest link.

How sanctions work. Apparently.

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According to a ‘diplomatic source’ quoted in this story, one aspect of the UK’s sanctions against Russian oligarchs is to attack their lifestyle:

"They come to Harrods to shop, they stay in our best hotels when they like, they send their children to our best public schools, and that is what's being stopped.

"So that these people are essentially persona non grata in every major western European capital in the world. That really bites."

Leaving aside the distinct possibility that being prevented from undergoing the ‘education’ provided by certain public schools might be doing the children a favour, let’s picture the scene in the Kremlin, as Putin sits at one end of his legendary table and one of his favourite oligarchs enters to sit at the other end.

Oligarch: Zdrastvuytie, Vladimir Vladimirovich

Putin: Zdrastvuytie, Mikhail Sergeyovitch. How can I help you today?

O: It’s these British sanctions – they’re causing me a lot of problems. My wife, Ludmilla, had set her heart on some new soft furnishings from Harrods, and we were going to send Ilya Mikhailovitch to Eton. Even worse, my girlfriend, Natalya, is giving me a lot of grief about not being able to meet up with her friends for tea at the Savoy, and the restrictions on how much money she’s allowed to keep in her account mean she’s down to her last few thousand. We need to do something, Vlad.

P: You want me to nuke Londongrad?

O: No, I don’t want that. Apart from anything else, Natalya is there at the moment, even if I can’t visit her.

P: Just as well – no point nuking the capital which is doing most to help us with our finances. So what do you want me to do?

O: Well, if you could just see your way to calling off the invasion and returning the tanks to their bases, I’m sure that my life could return to normal.

P: Are things really that bad?

O: Oh, yes they are. Trust me on this, Vlad.

P: OK, I’ll get on to it right away. Anything else?

O: No, that’s all. Spasibo. I owe you one.

It seems that there are people who really think this is the way Russia works.

No good solutions

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Had Putin stopped at recognising the independence of the two breakaway republics, and agreeing to their requests for military support to bolster their defences, he might have got away with it, in the sense that the position is at least arguable and most of the west would have thought it a small price to pay. Although the regions concerned undoubtedly voted for Ukrainian independence in 1991, opinions can change and it is at least ambiguous whether they want to be part of Ukraine, part of Russia, or independent of both. Worst of all, no-one seems particularly keen to find out. It would have led to a few paltry sanctions and decades-long negotiations to attempt to come to some sort of longer term agreement. What the people think is – and never was – of any great import in the power games. But he didn’t stop there, and there is little room for doubt about the wish of Ukrainians to be a free and independent state. There must be serious consequences, although there can surely be little doubt that the puniness and futility of the sanctions announced earlier this week will have emboldened Putin significantly.

On the underlying principles, there are some double standards being applied.

·        Putin believes that ‘allowing’ Ukraine (and others) to become independent was a huge mistake which must be reversed. The Ukrainians are really just a different type of Russian, and not a nation at all. Their country should be reunited with the motherland, restoring the ancient boundaries of Russia. Allowing them to decide for themselves what they want is unthinkable.

·        The Ukrainian government believes that Ukraine is a unique nation with its own history and culture, that its Soviet-era-determined boundaries are sacrosanct, and that the breakaway regions in the south-east are populated by people who are just a different sort of Ukrainian and should be reincorporated into Ukraine. Allowing them to decide for themselves what they want is unthinkable.

·        Whilst supporting Ukraine’s right to independence, Johnson also believes that ‘allowing’ Scotland (and Wales) a degree of autonomy was a huge mistake which must be rectified by undermining and rolling back that autonomy. They are just a different sort of Briton, and not a different nation at all. Allowing them to decide for themselves what they want is unthinkable.

All of them accept, of course, the inalienable right of all nations to determine their own future; it’s just that they also want to give themselves the right to decide which groups are or are not nations, and impose that view on others. None of that serves to excuse Putin, or establish some sort of moral equivalence. It is merely to point out that the idea that the right of a nation to enjoy its freedom and independence can or should be constrained by what a larger neighbour is prepared to ‘allow’ isn’t confined to Putin, and for further evidence, consider the way in which the US meddles in the affairs of countries in its own ‘back yard’. There’s more than a whiff of hypocrisy about a PM demanding that the sovereign right of one nation be respected whilst personally denying another the right to even ask itself the question. There is a difference in the level of violence involved, but the mindset is basically the same. And the bit missing in each case is asking what the people want – those with the might and the power will take that decision for them.

For those of us who genuinely believe that the people living in any area have the right to determine their own future, yesterday was a black day, and it’s hard to see a way forward. Becoming involved militarily would be folly, whether that’s troops on the ground or the more limited intervention of trying to impose a no-fly zone as called for by some Tories. Either risks escalation, whether by accident or design, into a conflagration which has the potential to end civilization in Europe and perhaps the world – and it’s hard to interpret Putin’s warning about anyone trying to stop him as anything other than a threat to do just that. Arming insurgents, as promised by Johnson, looks like asking people to fight a long and bloody war in which many more would die – it’s too easy to stand a thousand miles away and urge others to fight. Putin says he does not intend to ‘occupy’ Ukraine. To the extent that anything he says is believable, that might well be his wish; but it’s hard to see how merely installing a puppet government which may struggle to command the loyalty of the police, armed forces, or civil service, never mind the general population, can be made to work without an occupying force to impose its will.

That, inevitably, brings us back to sanctions, as being the only useable weapon in the West’s armoury. To be meaningful, they need to bite, and bite hard; something which is difficult in a country the size of Russia, with so many resources at its disposal. Targeting a few – or even a few thousand – rich Russian individuals or banks whilst continuing most trade links simply won’t cut it but those who are likely to suffer most from more serious sanctions are the ordinary Russian people, who have no say in what Putin does anyway. Johnson’s address to ‘the nation’ yesterday was long on rhetoric but short on detail. There was, in a rare departure in the direction of truth for Johnson, an admission that there is no quick solution. Regime change in Russia looks unlikely to happen soon, and the record of sanctions changing anything is poor. The one thing missing from Johnson’s speech was any admission that serious sanctions will cause us pain here (an omission which was not made by our own Mark Drakeford, who was very clear that effective sanctions will cause us pain as well). It leaves me doubtful, to say the least, as to whether Johnson is serious even now about the severity of the sanctions to be imposed.

Russia’s alliance with China doesn’t help the situation either. As a result of profit-driven cost-cutting and globalisation, China has been gifted (by capitalism) the potential to significantly damage western economies at any time should it choose to support its ally, a point which Covid demonstrated well, almost by accident. And what Russia can’t sell to, or get from, the west, it can probably sell to, or get, from China, which will certainly not support any sanctions imposed.

The truth is that, for all the sloganizing and outrage, there are no good solutions, and no good outcomes. It’s a question of finding the least worst, and whilst Johnson boasts about the UK leading the way on sanctions, the reality is that most of the rest of the world sees the UK as a weak link in the chain, largely due to the UK’s addiction to Russian cash. Whether the west is serious, and prepared to take the pain involved or is merely involved in a game of rhetoric and bluster remains to be seen. Putin is probably assuming the latter, and the history to date suggests that isn’t an entirely irrational assumption.