Financial sanctions and future of globalization

Abstract

The dynamics of financial sanctions over the past decades is considered. The outstripping growth of the role of financial and other "smart" sanctions is explained by their painfulness for target states, organizations and citizens, the asymmetry of the impact and the possibility of minimizing damage to third parties. It is shown that although the heyday of financial sanctions coincides with the period of the rollback of globalization, in many respects they are generated precisely by the process of globalization and the growth of network interactions. The assumption of the mutually reinforcing influence of deglobalization and sanctions is considered in view of the fact that the network effects of international financial institutions increase over time. Nevertheless, as a result of financial sanctions, the active processes of replacing traditional international payment and settlement mechanisms with alternative ones and the US dollar — with other reserve currencies (primarily the Chinese yuan) have not yet started. Historical experience confirms the conclusion that despite the negative effects of financial sanctions, in the modern world they may not contradict to the continuation of globalization.