Definition of Embargo, Types, and Case Examples

Definition of Embargo, Types, and Case Examples

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In short, the definition of an embargo is a prohibition issued by the government in a country to import or export certain goods or products to other countries.

This term is common and familiar used in the world of economics, especially in trade and politics. For more on the meaning of embargo and its types, read this article to the end, okay!

Definition of Embargo

The definition of embargo is a prohibition imposed by the government of a country, to export or import certain goods or products to other countries in the framework of policies related to economics, politics, and other policies.

Therefore, the term embargo can be concluded as an order given by a country, which aims to limit trade and exchange with certain countries.

The term embargo is generally used in international politics and commerce. An embargo is declared in the form of a policy by the government in a country against other countries in order to isolate the country concerned.

This will cause the government of an isolated country to be in a fairly difficult internal situation. This difficult internal situation occurred because of the influence of the embargo which caused the economy of the opposing country to suffer.

The policy, will also limit all trade with a country or aim to reduce the exchange of certain goods.

In general, embargoes are used as a political punishment for violations of a policy or agreement.

In general, embargo policies are enforced to force a country to submit to and comply with countries that prohibit exports and imports.

In other words, an embargo is a weapon that can paralyze a country’s economy.

If the embargo is enforced for a long period of time, then of course the people in it will experience the impact of the embargo.

People’s welfare will also decline and can have an impact on other sectors in a country.

In addition, embargoes are also treated as a result of unfavorable political and economic relations between nations.

For example, a military embargo is intended to prevent the exchange of military goods from occurring with a country.

Indonesia itself had received an embargo from the United States. The US embargo was in the form of a ban on exports and imports of military weapons procurement from 1999 to 2005, due to human rights violations committed by ABRI in East Timor.

America has often made trade embargo decisions and other economic sanctions because of the mandate from the United Nations.

An example is after the attacks on September 11 in 2001, the United States imposed an embargo on trading commodities to several countries in the Middle East which were accused of being the cause of the attack.

The embargo does not only apply to all goods and commodities that are exported or imported from the borders of a country.

Often times, embargoes only apply to certain goods, such as oil and military equipment.

 

Purpose of the Embargo

As previously explained, a country is forced to impose an embargo on another country with the aim of making it difficult for the target country to obtain various kinds of commodities, and especially goods that are the country’s needs.

The implementation of this embargo policy was triggered by a conflict of interest that occurred between the two conflicting countries, where the country that carried out the embargo hoped that the policy would be able to force other countries to voluntarily sit down together and resolve the issues that were going on between the two.

The United States, is one of the countries that often implements embargo policies on countries that are considered problematic by them. Both with superpowers and countries globally.

North Korea, Cuba, to Iran and Indonesia are examples of countries that had been hit by the economic sanctions embargo from the United States.

Even so, the United States was also affected by this embargo regulation. America is suffering from a shortage as well as an increase in fuel prices, because members of the Organization of the Petroleum Exporting Countries (OPEC) carry out an oil embargo on America.

Embargoes are carried out by certain countries such as America, because they are considered a tool to influence.

This embargo is quite often used by several countries that have trade agreements between countries, especially exports and imports.

Because many countries depend on global trade, embargoes are also considered a powerful tool that can affect a country.

 

Types of Embargo

In general, embargoes are divided into two types. Here’s the explanation.

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1. Economic Embargo

The first type of embargo is an economic embargo. Prohibition or stopping of commodity traffic from one country to another that has interests or is experiencing conflict.

Including export and import activities between countries, such as trade embargoes on the defense system or defense equipment and oil.

In short, the economic embargo is the prohibition of all forms of economic activities. Both export and import activities in countries that are currently receiving sanctions from the embargo.

Considering the need for certain raw materials, this economic embargo will have an impact on shocks for a production company.

So the production of certain goods, of course, will require raw materials imported from other countries at much more expensive prices and different levels of quality.

The policy of this embargo, of course, will have a negative impact. Especially if the country concerned has a level of dependence on raw materials that must be imported or commodities from a country that is ready to import.

This will bring considerable losses to countries experiencing embargo sanctions.

The policy of the embargo will also have an impact on economic conditions in a country, namely making the affected economy unstable.

Huge losses and a fairly severe impact of the economic embargo was massive layoffs.

In addition, the two countries, both those that impose embargoes and are subject to embargo sanctions, can also be involved in a cold war.

Because of that, many countries have finally implemented negotiations and even involved the WTO and the United Nations in order to be able to implement the steps they feel are the best in implementing the embargo action.

This is done in the interest of peace between the two countries and the lives of the people in those countries.

In addition, the embargo policy also has a certain period of time and has previously been adjusted to the decision of the country of the embargo giver.

However, it must first contain an agreement between the two countries, if the previous embargo policy is to be lifted.

In order to be able to lift the embargo policy, of course it will not be easy to do.

In fact, in general, there will be negotiations that are quite tough and will take a long time to be able to lift the embargo policy.

2. Information Embargo

The second type of embargo is the cessation of publication or distribution of all news, both news and information within a certain period of time.

In the Press Freedom Law itself, it has been stated that the prohibition of embargoes is a legal provision that must be obeyed.

If a violation occurs, the news company will also receive strict sanctions and fines whose punishment will be determined later.

A simple example of this information embargo is when a company announces the company’s profits in the mass media, then the public relations party of the company will also provide the data and information needed for publicity.

However, there is some information that will explain that there is an embargo.

Where previously the company would officially state that it was led by the leader of the company, then the data and all information provided would be prohibited from being published by the media.

 

Impact of the Embargo

As we knows, that the main purpose of imposing an embargo is to force the target country so that the country can remain subject to the wishes of the country implementing the embargo.

This step is one of the weapons that is considered quite powerful to cripple the economy of the country affected by the embargo.

The unavailability of products and basic needs in a country will certainly make the economy in that country shake.

The existence of this instability, will have an impact on the decline in the level of welfare in the country.

Not only the economic downturn, the embargo sanctions can also have an impact on the cold war and disrupt world peace.

 

How to Overcome the Embargo?

Considering the impact that can harm many parties, the embargo has become an event that is often difficult to avoid.

Countries that have been subject to embargo sanctions, will feel some adverse effects.

However, there are several efforts that can be made by countries that are subject to sanctions to survive the embargo, namely by focusing on surviving by optimizing the resources owned by the country.

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For example, when a country is subject to economic embargo sanctions which then cause imports to that country to be stopped.

So, the way to overcome this situation is to develop products independently according to the needs of the community.

However, maybe the quality and quantity of these products will be different, but by taking these steps, at least they are able to cover people’s needs for these products.

Another effort that can be made by countries that are subject to embargo sanctions is to establish good relations with other countries.

This needs to be done, so that the country is able to survive even though the country is experiencing an embargo.

 

Some Examples of Embargo Cases

For a more complete explanation of this embargo, here are some cases of embargoes that have previously occurred in various countries.

1. Economic Embargo on Iran by the United States

America often imposes sanctions embargoes, including economic embargo sanctions on Iran, namely in the form of prohibiting exports of crude oil to Iran and the sanctions embargo, announced by Barack Obama, who serves as President of the United States.

At that time, Iran also experienced a number of losses such as its potential market for oil exports.

In fact, when the economic embargo sanctions were applied, oil exports from Iran immediately fell to 1.5 million barrels per day.

Thus, Iran can only rely on exports to a few countries in Europe and the Middle East.

Then in 2015, the United States lifted the sanctions embargo on the condition that Iran must be willing to reduce its nuclear weapons production capacity.

By lifting the sanctions of the economic embargo, the export activities of crude oil in Iran again increased to 1 million bpd and Iran became part of the Comprehensive Plan of Action (JCPOA) as a form of Iran’s commitment to the nuclear weapons control program.

Then in 2018, America again imposed an embargo on Iran. The embargo sanctions did not only affect the two countries involved, but also had an impact on the global economy.

2. An arms embargo by the European Union on Guinea

In 2018 the United Nations passed a resolution to impose an arms embargo on the country in South Sudan. The policy was adopted by the United Nations, as a response to the existence of conflicts and ethnic violence that continues to occur in the country.

The resolution, proposed by America. Of the 15 members of the UN Security Council, nine countries supported the embargo policy, including Russia, Ethiopia, China, Equatorial Guinea, Kazakhstan and Bolivia, which abstained.

In addition to implementing an arms embargo, the UN Security Council also passed another resolution in the form of imposing a travel ban and imposing an asset freeze on South Sudan’s deputy defense chief.

South Sudan’s deputy defense chief is considered one of the main actors responsible for the conflict and ethnic violence in his country.

3. Embargo on Cuba

In 2014, the United States also imposed economic sanctions on Cuba and it has cost Cuba 3.9 billion US dollars or approximately more than Rp. 49.9 trillion in the last year in the foreign trade sector.

The total loss due to the embargo from America for 55 years even reached Rp1, 377 T, as stated by the Cuban government ahead of Cuba’s annual report to the United Nations in 2014.

The report is submitted by the Cuban side to the United Nations every year to encourage the lifting of the economic embargo on the country.

Then for decades, Cuba has also received support from many countries, which is then manifested in UN resolutions relating to the urge to lift the embargo.

In 2013, 188 countries also supported the resolution, but only two countries voted against it, namely America and Israel.

It is known that America first imposed an economic embargo on Cuba in 1960 and had begun a full embargo in 1961 after Fidel Castro won his victory in the Cuban uprising in 1959.

According to reports, if Cuba does not get the sanctions of the embargo, Cuba can make a profit of up to 205.8 million US dollars from the sale of rum and cigars.


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Economics Student of Universitas Gadjah Mada, Indonesia.