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Economic Sanctions : Effectiveness As a Foreign Policy Tool in the Case of the Former Yugoslavia

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Economic Sanctions : Effectiveness As a Foreign Policy Tool in the Case of the Former Yugoslavia Calhoun: The NPS Institutional Archive Theses and Dissertations Thesis Collection 1998-12 Economic sanctions : effectiveness as a foreign policy tool in the case of the former Yugoslavia Johnson, Jeffrey L. Monterey, California. Naval Postgraduate School http://hdl.handle.net/10945/32652 NAVAL POSTGRADUATE SCHOOL Monterey, California THESIS ECONOMIC SANCTIONS: EFFECTIVENESS AS A FOREIGN POLICY TOOL IN THE CASE OF THE FORMER YUGOSLAVIA by Jeffrey L. Johnson December 1998 Thesis Co-Advisors: Robert E. Looney Mary P. Callahan Approved for public release; distribution is unlimited. Form Approved REPORT DOCUMENTATION PAGE OMB No. 0704-0188 Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instruction, searching eXisting data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188) Washington DC 20503. 1. AGENCY USE ONLY (Leave blank) 2. REPORT DATE 3. REPORT TYPE AND DATES COVERED December 1998 Master's Thesis 4. TITLE AND SUBTITLE 5. FUNDING NUMBERS ECONOMIC SANCTIONS: EFFECTIVENESS AS A FOREIGN POLICY TOOL IN THE CASE OF THE FORMER YUGOSLAVIA 6. AUTHOR(S) Johnson, Jeffrey L. 8. PERFORMING ORGANIZATION 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) REPORT NUMBER Naval Postgraduate School Monterey, CA 93943-5000 9. SPONSORING I MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSORING I MONITORING AGENCY REPORT NUMBER 11. SUPPLEMENTARY NOTES The views expressed in this thesis are those of the author and do not reflect the official policy or position of the Department of Defense or the U.S. Government. 12a. DISTRIBUTION I AVAILABILITY STATEMENT 12b. DISTRIBUTION CODE Approved for public release; distribution is unlimited. 13. ABSTRACT (maximum 200 words) Unwilling to use military force, the Western powers, acting through the UN Security Council, relied heavily on economic sanctions against the Federal Republic of Yugoslavia (Serbia and Montenegro) [referred to as FRY (SIM)] to end the war in Bosnia-Herzegovina. The breakup of the former Yugoslavia resulted in wars of secession in Slovenia, Croatia, and finally, Bosnia-Herzegovina. Warring factions divided themselves up along ethnic lines with the Serbians being labeled as the aggressors in the conflict. Economic sanctions were implemented against the FRY (SIM) in May 1992. Economic sanctions were devastating to the FRY (SIM) economy. By 1993, FRY (SIM) President Slobodan Milosevic indicated his support for the Vance-Owen Peace Plan in exchange for the lifting of economic sanctions. The Bosnian- Serbs failed to support the peace plan, resulting in the tightening of sanctions on the FRY (SIM). The intent of the tightened sanctions was to force Milosevic to represent the Bosnian-Serbs in future peace negotiations. This strategy worked as indicated by the signing of the Dayton Peace Accords in 1995, which ended the war in Bosnia-Herzegovina. This work examines the role economic sanctions had in ending that conflict. Recommendations are provided to policy makers regarding the future use of economic sanctions. 14. SUBJECT TERMS 15. NUMBER OF Economic sanctions, embargo, foreign policy, Yugoslavia, Bosnia-Herzegovina, Federal Republic of PAGES Yugoslavia (Serbia and Montenegro), maritime interception. 167 16. PRICE CODE 17. SECURITY CLASSIFICATION OF 18. SECURITY CLASSIFICATION OF 19. SECURITY CLASSIFICATION OF 20. LIMITATION OF REPORT THIS PAGE ABSTRACT ABSTRACT Unclassified Unclassified Unclassified UL NSN 7540-01-280-5500 Standard Form 298 (Rev. 2-89) Prescribed by ANSI Std. 239-18 i ii Approved for public release; distribution is unlimited ECONOMIC SANCTIONS: EFFECTIVENESS AS A FOREIGN POLICY TOOL IN THE CASE OF THE FORMER YUGOSLAVIA Jeffrey L. Johnson Lieutenant, United States Navy B.S., University of Nebraska-Lincoln, 1991 Submitted in partial fulfillment of the requirements for the degree of MASTER OF ARTS IN NATIONAL SECURITY AFFAIRS from the NAVAL POSTGRADUATE SCHOOL De(~mber 1998 Approved by: Frank C. Petho,Chairman Department of National Security Affairs iii iv ABSTRACT Unwilling to use military force, the Western powers, acting through the UN Security Council, relied heavily on economic sanctions against the Federal Republic of Yugoslavia (Serbia and Montenegro) [referred to as FRY (SIM)] to end the war in Bosnia-Herzegovina. The breakup of the former Yugoslavia resulted in wars of secession in Slovenia, Croatia, and finally, Bosnia-Herzegovina. Warring factions divided themselves up along ethnic lines with the Serbians being labeled as the aggressors in the conflict. Economic sanctions were implemented against the FRY (SIM) in May 1992. Economic sanctions were devastating to the FRY (SIM) economy. By 1993, FRY (SIM) President Slobodan Milosevic indicated his support for the Vance-Owen Peace Plan in exchange for the lifting of economic sanctions. The Bosnian-Serbs failed to support the peace plan, resulting in the tightening of sanctions on the FRY (SIM). The intent of the tightened sanctions was to force Milosevic to represent the Bosnian-Serbs in future peace negotiations. This strategy worked as indicated by the signing of the Dayton Peace Accords in 1995, which ended the war in Bosnia-Herzegovina. This work examines the role economic sanctions had in ending that conflict. Recommendations . are provided to policy makers regarding the future use of economic sanctions. vi TABLE OF CONTENTS I. INTRODUCTION................................................................................................................................ 1 A. DEFINITIONS .............. ........ ................................................................................................ 2 1: Economic Waifare and Measures Other Than Economic Sanctions 3 2. Economic Sanctions .................. .................... ............................................ ........................ 4 3. Maritime Interdiction and Blockades ................................................................................ 8 4. Embargo ............................................................................................................................ 9 5. Foreign Policy Goals ........................................................................................................ 9 B. SO:rvrn GENERAL PRINCIPLES ......................................................................................... 10 C. PLAN OF THE: TlIESIS ....................................................................................................... 13 n.BACKGROUND .................................................................................................................................. 15 A. HISTORY AND GEO-POLITICAL ISSUES ........................................................................ 15 B. MILITARY OF THE: FOR:rvtER YUGOSLAVIA.................................................................. 18 C. ECONOMY OF THE: FOR:rvtER YUGOSLAVIA ................................................................. 22 1. Socialist Self-Management ........................................................................................ 22 2. Overview of Economic Performance ......................................................................... 25 3. International Trade ................................................................................................... 27 4. Summary .................................................................................................................... 29 D. CHAPTER CONCLUSIONS ................................................................................................. 29 m. ECONOMIC SANCTIONS ............................................................................................................. 31 A. ECONOMIC SANCTIONS - THE:ORETICAL ARGU:rvtENTS ............. :........................... 32 1. Determining Success - The Success Equation .......................................................... 32 a. Policy Result - Extent policy goals were achieved .................................... 34 b. Contribution made by sanctions .................................................................. 34 2. Variables that Influence a Sanctions Episode ........................................................... 35 3. Types of Foreign Policy Objectives ........................................................................... 36 4. HSE's Recommendations ........................................................................................... 36 5. Criticisms of HSE's Study ..........................................................................................41 6. Summary .................................................................................................................... 42 B. UN SANCTIONS ON THE FOR:rvtER YUGOSLAVIA ...................................................... .42 1. UNSCR 713 - The Arms Embargo ............................................................................ 42 2. UNSCR 757 - Economic Sanctions ......................................................................... .43 3. UNSCR 787 - Enforcing the Sanctions ....................................................................
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