Impact of Economic sanctions on poverty and economic growth

Question

What is the impact of sanctions on poverty and economic growth? Consider global evidence and then focus down on Sudan.

Summary

Key Findings

  • Economic sanctions lead to an increase in the poverty gap and deprived sections of the population feel the most impact.
  • For the most part sanctions fail to achieve their aims and elites manage to negotiate the adverse effects to a far greater level than poorer citizens.
  • Sanctions have a damaging effect on income inequality and impact ordinary people more than the sanctioned country’s leaders.
  • Sanctions tend to harm rural and non-industrialised areas more, as resources are refocused in power and production centres.
  • Economic sanctions have a negative impact on the cost of reconstruction and economic growth following the lifting of the sanction(s) or regime change.
  • Sanctioned regimes often attempt to magnify the sanctions’ negative effect on the economy to prevent the population from revolting.
  • Between 1976 and 2012 UN sanctions led to a 25.5 percent aggregate decline in GDP per capita of the sanctioned countries.
  • The negative impact that sanctions have on economic growth affect women, minority communities and other marginalised groups to a greater extent.
  • Sanctions have a significant negative impact on the living standards and humanitarian situation of the population in the sanctioned state.
  • Sanctions in Sudan have not led to the regime changing its actions and approach.
  • Poverty is used as a tool in Sudan to control the population and blame is placed on those who enact the sanctions.
  • Sanctions in Sudan have impacted the aid process leading to less aid getting through which exacerbates poverty.
  • Although oil exporting has led to economic growth in Sudan, overall economic development is low and there is a disparity in the distribution of wealth from oil.
  • Poverty as well as lack of services and opportunities are still significant issues in Sudan and women feel the impact to a greater extent.
  • In Sudan the cycle of economic hardship, misrule and conflicts, which are partly a result of the sanctions, manifest to defeat the core purpose of the sanctions.

Enquirer:

Suggested citation

O’Driscoll, D. (2017). Impact of Economic sanctions on poverty and economic growth. K4D Helpdesk Report. Brighton, UK: Institute of Development Studies.