Sanctions & values-based globalisation

The sanctions imposed on Russia, and stakeholder pressure on firms, suggest that values will increasingly shape global economic relations

The horrifying pictures out of Ukraine this week of war crimes committed by Russian forces have intensified calls for tougher economic sanctions to be imposed, from oil and gas bans to a complete removal of Russian banks from SWIFT.  Moral outrage is intersecting with economic decision-making.

Previous notes have argued that the Russian invasion and the accompanying sanctions will accelerate global economic fragmentation.  The behaviours of Western-aligned governments and firms over the past several weeks show that there is a strong political values motivation to these dynamics, as ties with Russia are cut in response to breaches of international law. 

Sanctions as symbols

Relative to initial expectations, the economic sanctions imposed on Russia have been strong and broad-ranging – although ongoing exports of oil and gas to Europe remain a large hole. 

There are a few motivations for imposing sanctions on Russia: to drive Mr Putin to the negotiating table by imposing economic costs; to i…