The author is a former governor of the Reserve Bank of India. He is also a theoretical economist. The two hats, theory and practice, have always made it difficult to categorise him. No matter. He is always compelling in his arguments.

This is a book, in the final analysis, for connoisseurs of the analytical method, not unlike a musician’s solo performance for fellow musicians. You read it for its virtuosity but should be prepared for occasional incomprehension.

There are seven chapters. Five discuss sanctions from different perspectives. The style is a little disjointed and staccato which could be a little discouraging for the lay reader. The overall message is the same, however: sanctions are bad, never mind how much the country imposing the sanctions dislikes the target country.

The idea of writing all this came to him when he was on the board of the Asian Infrastructure Investment Bank (AIIB). The possibility of secondary sanctions loomed before it. One thing led to another and, three years later, this book has resulted.

In what is possibly a mixed metaphor he says “Sanctions are akin to laying a slow-burning siege.” Mixed or not, he is spot on because the intent is to cause harm. Patel demonstrates, if further proof were needed, why sanctions are such a bad idea.

American hegemony 

Researchers have shown, he says, that the success rate of sanctions is 40 per cent. That seems like rather a lot to be called a bad idea, though. That said, although Patel doesn’t say so openly, sanctions are a perfect example of the crudeness of American political minds which are like that of our own khap panchayats.

Patel thinks secondary sanctions have ‘first order effects’ which means the impacts of the first sanctions are higher because they are raised. The feared risks lead to uncertainty and postponement of business decisions.

So why do sanctions continue to be imposed? Because, says Patel, we don’t know enough about what they do to wallets. So voters don’t blame politicians for whatever harm sanctions do to the people in the country imposing the sanctions. The cost-benefits of sanctions are ‘black box’, Patel says.

Patel shows how sanctions, regardless of how pointless they are, have become the preferred weapon. They have led to massive disruptions of, and in, global economic activity, including for the US.

Form groups

So what needs to be done in a world where sanctions are ever expanding? What should the victim countries do?

Patel believes (p 13) that they should form their own group, a la Brics, and take defensive action. He doesn’t seem to mind that this group will be led, willy-nilly, by China which has the economic muscle that’s needed.

Which brings us to the penultimate chapter and possibly the most important chapter. It is on the internationalisation of the Chinese currency, the renminbi. Patel is cautiously sceptical — he calls it cautiously optimistic — about the prospects because centrally directed Chinese policies are not conducive.

His analysis is unbiased and utterly fascinating. He lays out current Chinese practices and finds them wanting on a number of counts. But, right at the end, he says all these can be corrected — provided China heeds market signals the way the US does.

That, however, could be a very long haul because middle ‘C’ in CCP stands for control. Without such control, the Party will become just another toothless tiger.

In conclusion, I have a minor quibble. Back in 2002 I, along with Dr G Balachandran (the strategist not the economic historian) wrote a monograph called Sanctions: Indo-US Perspectives. And guess what? We also said no, they don’t work.

Check the book out on amazon.

Published on December 7, 2025