Sanctions are economic WMDs and need a lever for control
Advanced economies will be understandably reluctant to place constraints on their own newly discovered powers. But they should recognise that a balkanised global economy would hurt everyone.
War is horrific, no matter how it is waged. Nevertheless, Russia’s unprovoked attack on Ukraine, with its scenes of Ukrainian civilians being murdered or driven from their homes, undoubtedly had to be opposed.
In addition to supplying Ukraine with military weapons, governments around the world have deployed economic weapons against Moscow. Although Russia – an economic midget relative to its military power – may still lash out by expanding the range of weapons it uses and the territories it targets, it is a risk the world had to take.
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Project Syndicate
Raghuram G. Rajan, former governor of the Reserve Bank of India, is Professor of Finance at the University of Chicago Booth School of Business.
