Responding to Putin's aggression with economic, financial weaponry

ABSENT any serious provocation, Russia has committed staggering acts of aggression against Ukraine and threatened to overthrow the government in Kyiv, leaving the West under US leadership no choice but to show Russian President Vladimir Putin that his government would pay dearly for its deadly gamble.

But US President Joe Biden and his North Atlantic Treaty Organization (NATO) counterparts would not deploy military troops to Ukraine. Washington has made it clear that a war between America and its nuclear peer Russia over Ukraine is out of the question, reflecting the military, economic and political constraints operating on the Biden administration. Instead, the US and its European allies have announced the imposition of economic sanctions against the Russian government, banks and government officials, with more to come in the next weeks. Putin's "aggression in Ukraine will end up costing Russia dearly, economically and strategically", Biden said in outlining the proposed measures, which include sanctions on 90 Russian financial institutions that represent 80 per cent of the country's banking sector.

The economic sanctions are intended to bolster the Western allies' diplomatic leverage over Russia without risking the use of military power. To be sure, the sanctions amount to warfare by economic means and would not be cost-free for those who impose them, with potential economic blowback not just in Europe but also for the entire global economy. And it would happen at a time when the world's economies are already dealing with a two-year-long pandemic, supply chain disruptions, and surging inflation.