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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden) -- Ignore unavailable to you. Want to Upgrade?

To: Razorbak who wrote (1496)	2/21/2000 6:50:00 AM
From: Tomas	Read Replies (1) \| Respond to of 2742

Sanctions no answer for Sudan - The Globe & Mail, February 21 DEXTER SAMIDA and MARTIN ZELDER Foreign Affairs Minister Lloyd Axworthy's recent statement that the U.S. government's imposition of sanctions on Talisman Energy Inc.'s oil project in Sudan "changes nothing" was correct in more ways than one. It was right in the sense that these sanctions would change nothing in terms of Canadian foreign policy. But it was also right in a different context: The economic evidence on sanctions suggests they probably will change nothing in Sudan. This is not to say that the situation in Sudan is anything other than horrifying. Sudanese government forces are accused of terrorizing and enslaving Christians and animists in southern communities that resist conversion to Islam. Some groups claim that one-fifth of the Sudanese population has been displaced by civil war. Furthermore, the United Nations Commission on Human Rights alleges that the government has firebombed and forcibly moved people from oil-rich regions to prevent sabotage. Those in developed nations cannot help but be dismayed by these reports, and our strongest inclination is to look for some way to help. Sanctions punishing foreign governments for their misbehaviour seem like the obvious solution. But are they? No. Thorough economic analysis concludes that sanctions are typically unsuccessful, eliciting favourable changes in, at most, one-third of the circumstances in which they are applied. The South African experience, while typically hailed as an example of the benefits of sanctions, is an instructive example. The Institute for International Economics, a Washington-based group that has extensively studied sanctions, concluded that the South African experience was "unsuccessful." Sanctions were able to only marginally reduce the country's GDP and did not stop repression. A recent study of South Africa by Yale University economist Phillip Levy further concludes that, rather than through public or private sanctions, apartheid was vanquished by three factors: growing intolerance of labour-market distortions institutionalized under apartheid, domestic political activism, and the fall of communism. If sanctions are not the answer to Sudanese repression, what is? The answer is the elimination of sanctions, along with other barriers to free economic activity. Harvard University economist Robert Barro found that improvements in a country's standard of living -- including increasing the level of economic activity -- substantially increase the likelihood that political freedoms will grow. Consequently, expanded investment and work opportunities for the Sudanese people are to be encouraged, not sanctioned. Prof. Barro's research is part of a larger area of study that finds that restrictions on economic activity, whether imposed domestically or by some foreign potentate, have profound adverse effects. Our research, which examines 23 types of restrictions on economic activity, finds that the countries with the least restrictions are not only the wealthiest nations, but also grow the fastest. Conversely, those countries with the most extensive restrictions are not only the world's poorest, but are even becoming poorer over time, i.e., experiencing negative growth! Because research indicates that democracy becomes more likely as standards of living improve, the humane policy for the long-run welfare of the Sudanese people is to encourage economic activity in Sudan. Those who support sanctions are recommending, instead, that we squelch such activity. With tragic irony, a desire to help the Sudanese people has been transmuted into a policy that may well harm them. The case for trade sanctions is much weaker than its advocates would suggest. If the purpose of these restrictions is to better the life of those in repressive regimes, all the good intentions in the world cannot replace careful analysis. On balance, the evidence suggests that government sanctions do very little to obviate or ease human-rights violations, and may slow the coming of democracy. Sanctions, therefore, should be the exception and not the rule. ___________________ Dexter Samida and Martin Zelder are researchers at The Fraser Institute, a Vancouver-based economic research organization.