U.S. Sanctions Economic Term Paper

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(Hufbauer, 1997)

To supplement family incomes, children in sanctioned countries often leave school to seek employment, increasing school drop-out rates. Meanwhile women burdened with greatly increased household responsibilities face increasing difficulties in providing care for themselves and their families. Women's reproductive health and pre-natal care also suffers from the general decline in health services due to sanctions ill-effects. In Iraq, the proportion of babies born with low-birth-weight more than quadrupled (to 22%) between 1990 and 1995. In Haiti contraceptives, not considered essential drugs until 1993, were in short supply during the sanctioned period. (Hufbauer, 1997)

In summary, sanctions can seriously compromise the survival of all civilians, particularly children. Despite humanitarian exemptions, recent examples from Haiti, Iraq and Yugoslavia demonstrate the damaging effects of sanctions. If these negative effects are to be moderated, then greater efforts are required to protect innocent and vulnerable civilians from sanctions ill-effects. One step in this effort is to improve assessment and monitoring of the humanitarian impact of sanctions on vulnerable civilian groups. A more confident and reliable assessment mechanism may help policymakers fine-tune sanctions, making them less harmful to innocent civilians.

Costs of Economic Sanctions to the United States

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While the benefits of economic sanctions are elusive, the costs often are not. Trade sanctions deprive the United States of the gains from trade and frequently penalize exporting firms that are among the most sophisticated and productive in the U.S. economy. As American sanctions have expanded and proliferated over the past 20 years, they have also led to increasing tensions between the United States and its allies and trading partners around the world.

Term Paper on U.S. Sanctions Economic Sanctions Are Assignment

In a recent study, it was found that economic sanctions cost the United States $15 billion to $19 billion in forgone merchandise exports to 26 target countries in 1995. Lower exports of $15 billion to $19 billion would mean a reduction of more than 200,000 jobs in the relatively higher-wage export sector and a consequent loss of nearly $1 billion in export sector wage premiums. Though the estimates were calculated using trade in the base year of 1995, similar costs accrue each year that similar sanctions remain in place.

These effects could be overstated to the extent that exporters are able to redirect their goods to other markets. (Rennack, 1998)

Many American businessmen claim that the effects of even limited unilateral U.S. sanctions go well beyond targeted sectors and that the effects linger long after they are lifted because U.S. firms come to be regarded as "unreliable suppliers." Sanctioned countries may avoid buying from U.S. exporters even when sanctions are not in place, thus giving firms in other countries a competitive advantage in those markets. Exports lost today may also mean lower exports after sanctions are lifted because U.S. firms will not be able to supply replacement parts or related technologies. Foreign firms may also design U.S. intermediate goods and technology out of their final products for fear of one day being caught up in a U.S. sanction episode. (ENGAGE, 2002)

In a $7 trillion economy these costs may not be huge but they are tangible. Moreover, they are concentrated on sectors and firms involved in international trade and investment that are often the most sophisticated and competitive in the American economy. A rapidly changing global economy means that unilateral economic sanctions are decreasingly useful yet increasingly costly. If sanctions are to have any chance at all of producing favorable outcomes, they must be multilateral, they must be carefully formulated, and they must be vigorously enforced. (ENGAGE, 2002)

Effect of Sanctions on Iraq

Although food is available, sanctions have caused skyrocketing inflation and plunging wages. Skyrocketing inflation and plunging wages make it impossible for most people to buy on the free market, relying instead on the limited food rations the government provides at subsidized prices. As a result of sanctions, the economy has declined by an estimated 40%; Iraq's rate of inflation runs in the triple digits.

Furthermore, sanctions have cut living standards to half their pre-war level. The cost of living has increased drastically for Iraq. To keep inflation in check, the Iraqi government has periodically cracked down on merchants-- accused of fueling inflation by overcharging products. Increasingly as worrisome to price control is the plunging value of the Iraqi dinar. On the black market, it has plunged far below its official rate of U.S. $l = Iraqi Dinar 0.60. The price of the dollar on the black market is well over 1000 dinars and continues to rise. (Clark, 1996)

Although Iraq has sustained much damage from the sanctions, there has been some reconstruction. Much of the reconstruction which has gone on in Iraq has been temporary; Iraq has obtained the parts for its reconstruction by cannibalization of other industrial sectors. Rebuilding has been emphasized in areas visible to outsiders, thus, giving the impression that the sanctions are less deleterious than they truly are. Although civilian factories incurred little damage during the war, sanctions have forced most of the factories to either close or to drastically scale back their production. Sanctions have caused shortages of raw materials and spare parts used in production; as a result, unemployment is widespread. (Rennack, 1998)

Sanctions have reduced Iraq to becoming a poor nation: a nation unable -- with its rather meager funds -- to feed itself let alone take measures to protect Iraq's environment. Currently, in Iraq, water and sanitation services are said to be in a critical state of disrepair. This is because Iraq has a lack of spare parts to repair damages both caused by the Iran-Iraq War and breakdowns of equipment. Such disrepair has led to Iraqi water tables becoming contaminated. Posing as equally detrimental to Iraqi water sources is the dumping of sewage into all major rivers: the source of drinking water. (Wood, 1999)

Additionally, shortages of equipment have forced Iraq's cities into becoming garbage dumps. With a shortage of spare parts to repair garbage trucks, garbage piles up in the cities. These garbage dumps pose as health hazards to the cities' poor, because the poor often forage through them looking for food. The shortage of equipment caused by sanctions has also made Iraq more prone to oil spills. Nonetheless, on the upside, sanctions, in some regards, may have been good for the Iraqi environment. This is because Iraq's exports of oil have been banned. Without a market to sell petrol, Iraq's chances of an oil spill are presumably less likely. Whether the chances of an oil spill has been decreased, when taking into consideration the shortage of equipment, is as of yet to be determined. (Wood, 1999)

Effects of Sanctions on Libya

The United States established economic sanctions against Libya in 1986 charging Libyan involvement in international terrorism. These sanctions prohibit U.S. citizens from buying or selling to Libya; any financial dealings with Libya; entering any contracts benefiting Libya; and travel to Libya. The 1992 U.N. sanctions severed international air links and banned arm sales to Libya. In 1993, tougher sanctions were imposed including the freezing of all Libyan financial assets abroad, closing all foreign offices of the Libyan airline, as well as prohibiting oil refining and pipeline equipment exports to Libya. In August 1996, the U.S. Congress sought to discourage foreign firms from having commercial contacts with Libya by passing the Iran and Libya Sanctions Act. (Libya, 2002)

The effects of sanctions on Libya have been quite staggering. Some 15,750 persons living in the Jamahiriya are suffering from serious medical conditions (cardiovascular disease; fractures of the spinal column and thorax; fractured skulls; chronic eye diseases; detached retinas: serious burns; cancer and malignant tumors) which require emergency treatment. Because of the continuation of economic sanctions, these individuals, who could not be treated in local hospitals and health-care facilities, could not be evacuated by air for treatment in other countries or for necessary medical examinations and surgery in hospitals and specialized health-care facilities with modern equipment. Because they could not obtain treatment, most of these patients died in tragic circumstances. (Libya, 2002)

There have been 1,135 stillbirths and 514 women have died in childbirth in the various hospitals owing to the shortage of medicines, serums and vaccines. Prior to the sanctions, such supplies had been imported regularly by air, with the usual precautions being taken to preserve their efficacy and usability. The Libyan Arab Jamahiriya was able in that way to meet its needs in this area, particularly in emergency situations. (Libya, 2002)

There has also been a rise in the number of road accidents. As Libyans have had to take to the roads linking the major cities in the country, hundreds have been involved in accidents in which they have been killed or suffered permanent disability. There have been some 15,260 victims of road accidents, including 2,560 fatalities. The remaining 12,700 victims are suffering from serious injuries or permanent disabilities. (Libya, 2002)

As economic sanctions continue to be enforced against Libya, particularly the latest American-sponsored Iran and Libya Sanctions Act,… [END OF PREVIEW] . . . READ MORE

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