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The most workable option for the Ukraine crisis is for negotiations to be given the chance to succeed. Image Credit: AFP

After World War II, sanctions against any country was largely linked to the economic strength of the US, which emerged from that war without suffering widespread destruction unlike the situation in Europe.

Cuba is one nation that has been most affected by sanctions, which have lasted for 60 years. Other examples include those imposed on North Korea, Iraq, and, more recently, on Iran and Venezuela. Now, it is the turn of Russia to feel the sanctions blast, after its move into Ukraine. This raises a question: Have past sanctions imposed on the likes of Cuba and others worked or failed? Will sanctions work with a commodity-rich country like Russia?

In the past two decades, the US has seen another great economic power emerge in the form of China. Apart from the change in the global economic balance of power, there are other factors that have to be taken into account. Russia today controls 11 per cent of oil and 21 per cent of gas production in the world. It also supplies western Europe with 40 per cent of its natural gas needs, in addition to being one of the largest exporters of wheat and minerals. Russia also has the second-largest gold reserves in the world, which has quadrupled since 2010.

Stand up to sanctions

Does a country that owns all this vast wealth need the world more than the world needs it? This fact what will determine the extent to which the boycott imposed on it will succeed. The proceeds coming from continuing oil exports in dollars still flow to Russia despite the expulsion of some of its banks from the SWIFT inter-bank system. It means that the world cannot completely do without Russia's resources.

Rather than emotional considerations, what is needed are pragmatic approaches. Action requires support for ongoing negotiations to end the conflict. For the West, the crisis certainly has dimensions that go beyond Ukraine. Russia has alternatives not available to many countries that were previously boycotted. This is why many other nations have not made any move on sanctions.

In any case, the whole world is paying a heavy price, and not just Russia or the West. The conflict will cost the global economy $400 billion this year. At the individual and nation level, everyone must tighten their belts ahead of a significant rise in prices and rate of inflation that will affect all.