economy

What is an embargo, what are its consequences and how to deal with it

Table of contents:

What is an embargo, what are its consequences and how to deal with it
What is an embargo, what are its consequences and how to deal with it

Video: The Embargo Act Its Impact 2024, July

Video: The Embargo Act Its Impact 2024, July
Anonim

War can be fought by various means. In fact, it never stops, and that phase of it, in which guns, tanks, missiles and planes are used, is simply its extreme form. The states of the world, and especially the superpowers, are constantly testing each other for strength, trying to comply with their interests, and if possible to squeeze out competitors. One of the methods of a "peace war" is most often the use of economic pressure, denoted by the Spanish word embargo, translated as "ban." What is an embargo, what are its consequences for the conflicting parties, and how are the countries that have been subjected to it most often fighting it? First you need to understand the very essence of this punitive sanction.

Image

Assessment of the effectiveness of the embargo

Before starting a conflict, you should decide on the chances of success, this rule is mandatory for all cases. If you are not completely sure of victory, there is no need to challenge. The same applies to measures of economic impact. Suppose neighbors are offended for some state. It doesn’t matter if their anger is fair, or if they’re just used to the privileges that they suddenly lost. It is possible that the leadership of this country is really pursuing an aggressive policy or simply defending its security, seeing how hostile forces are getting closer and closer to its borders. And the neighboring powers want to “push”, but are not sure that such an embargo will be an effective measure of coercion to the solution they need.

For example, after the Soviet troops entered the Democratic Republic of Afghanistan in 1979, the American company Coca-Cola announced its refusal to supply soft drinks for guests of the Moscow Olympics. The measure, of course, is terrible, but the USSR was not worried.

Wheat embargo

Lemonade, of course, is not the most important thing, but grain is an important product. Despite the abundance of land, including black soil, the Soviet Union has not achieved complete food autonomy in the entire history of its existence. Dependence on the supply of cereals from the United States took place, in 1975 an annual import contract was signed in the amount of about a billion dollars (then it was a lot of money). Of course, after the introduction of troops into the DRA, it was hard to expect that the Americans would not take the opportunity to “strike at a pain point”. The US economy also suffered from such a punitive measure, because the sale of agricultural products is a very important component of the foreign trade balance. However, ambitions turned out to be stronger, and there was still hope that such an embargo in combination with a boycott of the Games would force the USSR to retreat. Again, Coca-Cola …

The blow was strong, but not fatal, import substitution occurred almost instantly, wheat with great pleasure began to sell many countries with developed agricultural industries: Canada, Argentina, Australia and even Spain. Perhaps, if the Western world were more united, we would have to learn how to grow good crops ourselves, and perhaps even dissolve collective farms …

Image

Prohibition of buying or selling?

The meaning of the word embargo can be twofold. A ban on the sale of certain goods of strategic economic or military importance, as a rule, is combined with a restriction on the import of goods produced in a rogue country. There are many examples, and such measures do not always lead to bad consequences, sometimes they cause a completely opposite effect. For example, the ban on the sale of large diameter pipes from Germany at one time (in 1963) forced the Soviet leadership to allocate funds for the development of technology and the production of these products in the Soviet Union.

In 1974, OPEC states, offended by Western democracies for their support for Israel, announced an oil embargo. The importance of hydrocarbons has always been and remains huge for the global economy, prices immediately skyrocketed, ordinary citizens of Europe, the USA and even Japan felt this measure of impact directly on their wallets. However, the Arab embargo also played a positive role. Citizens of rich countries began to get used to saving, developed a number of progressive energy-saving technologies, many of them switched to small cars and took many more measures to reduce the consumption of petroleum products.

Image