Giorgio Caifero writes: Tumbling oil prices are upsetting political equations all over the globe, especially for governments that depend heavily on oil revenue to provide services for their populations.  Governments in the oil-rich Middle East are also being forced to tighten their belts.

The slide in oil prices has hit the Sultanate of Oman. The sultanate’s vulnerability was underscored late last year when Standard & Poor’s cut its outlook for Oman’s sovereign rating from stable to negative.  Last month, the economic and financial committee for the lower house of the Majlis al-Shura (Oman’s legislative body) proposed a ‘fair tax’ on liquefied natural gas exports, estimated to generate $509 million. The Majlis al-Shura has also approved legislation to impose a 2 % tax on goods the Oman’s 1.9 million expatriates send overseas.  The Majlis al-Shura also proposed a 12% levy on telecommunications revenue, which Oman News Agency reports would bring in $80.5 million. Meanwhile Oman Cement and Raysut Cement announced that the Ministry of Oil and Gas would double the priceof natural gas for the two firms.. State spending in health, housing and training will remain the same.

Oman’s unique stability is largely attributed to the state’s high domestic spending, making budget cuts a politically risky solution to the shortfall in oil revenue.  Oman’s ability to increase government services in times of unrest has been a crucial lifeline for the monarchy in the recent past.

Burma’s business development prospects in 2015 are forecast to be mixed as the country grapples with a variety of problems ranging from domestic political uncertainty to outside economic influences beyond its control.

National elections this year will make some foreign investors hesitant to enter Burma until a clear outcome emerges, say analysts, and the unexpected collapse of oil prices in 2014 is likely to put plans to develop 20 offshore oil and gas blocks into slow gear.

Some major infrastructure investment decisions, notably the special economic zone at Dawei on the southeast coast, are anticipated, but not soon.  Economic reform must be a continuing key issue for Burma’s leadership if the country is to follow its neighbors and integrate further with the international community.

Major obstacles to economic expansion in Burma in 2015 are the country’s inadequate banking and finance facilities plus rampant corruption at all levels.

This first quarter of 2015 should see the announcement of more final agreements in production sharing contracts (PSCs) between the state-owned Myanma Oil & Gas Enterprise and the foreign oil companies who won licenses to explore 20 sites in the Bay of Bengal and Andaman Sea for oil and gas.

Terms for investment and potential profit sharing have been complicated by the collapse of international crude oil prices over the last six months.

Major oil companies that won offshore licenses for Burma in March include Shell, Chevron, Total and ConocoPhillips.  The national oil companies (NOCs) of neighbors Malaysia and Thailand, which have projects in Burma, have already announced expenditure cuts.

The continued lack of a deep-water port for Rangoon threatens to undermine manufacturing growth in Burma’s biggest city which is also the main commercial sea gateway into the country.

The Dawei port is located approximately 700 kilometers from Rangoon.  Critics of the Dawei SEZ have said it would primarily benefit Thailand by giving it access to the Indian Ocean as an oil transhipment terminal, and to expand its petrochemical industries, which are stymied in the greater Bangkok region by environmental laws.

Kenneth Rogoff writes: With Western economic sanctions against Russia, Iran, and Cuba in the news, it is a good time to take stock of the debate on just how well such measures work.

As Gary Hufbauer and Jeffrey Schott note in their classic book on the topic, the history of economic sanctions goes back at least to 432 BC, when the Greek statesman and general Pericles issued the so-called “Megarian decree” in response to the abduction of three Aspasian women. In modern times, the United States has employed economic sanctions in pursuit of diverse goals, from the Carter administration’s efforts in the 1970s to promote human rights, to attempts to impede nuclear proliferation in the 1980s.

During the Cold War, the US also employed economic sanctions to destabilize unfriendly governments, especially in Latin America.  Economic sanctions on Serbia in the early 1990s did not deter the invasion of Bosnia.

The old Soviet Union played the sanctions game as well – for example, against China, Albania, and Yugoslavia. It, too, did not have much success, except perhaps in the case of Finland..

Severe US sanctions on Cuba failed to bring the Castro regime to heel; indeed, President Barack Obama’s move to reestablish full diplomatic relations may have more effect.

But sometimes sanctions do work. The strong international consensus to impose sanctions on South Africa in the 1980s eventually helped bring an end to apartheid. Sanctions have helped bring Iran to the bargaining table. And the Russian economy today is in big trouble, though this might be described as a lucky punch, with the real damage being done by an epic collapse in global oil prices.

Some in Russia, where the price collapse has hit government revenues hard, claim that the US and Saudi Arabia are conspiring to bring Russia to its knees. But that gives US strategists far too much credit. A more likely culprit for the steep price decline is a combination of the shale-energy revolution in the US and the sharp slowdown in Chinese growth. China’s slowdown has helped precipitate a broad-based fall in commodity prices that is having a devastating effect on countries like Argentina and Brazil, with which the US authorities presumably have little quarrel.

One of the major reasons economic sanctions have fallen short in the past is that not all countries have complied.  The Kim regime in Noth Korea has clung to power despite being subject to severe economic sanctions, perhaps because China, fearing a united Korea on its border, has not yet been willing to withdraw its support.

North Korea’s alleged attack on Sony Pictures’ computers has been rightly condemned, Sony Pictures had produced a satire poking fun at North Korea’s leader, the “Young General” Kim Jong-un. This was an intolerable affront, to which the elite responded with economic sabotage rather than military action.

Russia, too, has deployed cyber attacks in the service of foreign-policy goals. Indeed, Russia has far more formidable hackers than North Korea.

In a world where nuclear proliferation has rendered global conventional war unthinkable, economic sanctions and sabotage are likely to play a large role in twenty-first-century geopolitics. Rather than preventing conflict, Pericles’s sanctions in ancient Greece ultimately helped to trigger the Peloponnesian War. One can only hope that in this century, wiser heads will prevail, and that economic sanctions lead to bargaining, not violence.