Two years after Russia’s takeover, no Crimean spring

Girls in traditional Russian garb welcome the return of missile cruiser "Moskva" back to Sevastopol from Syria. Photo: Dpt of information support of Black Sea Fleet

Girls in traditional Russian garb welcome the return of missile cruiser "Moskva" back to Sevastopol from Syria. Photo: Dpt of information support of Black Sea Fleet 

2016/03/16 • Analysis & Opinion, Crimea, Ukraine

They’re calling it the “Crimean Spring.” These are the several celebratory events that are being held in occupied Crimea and in Russia from March 15 to March 18. The celebrations are to commemorate what most of the world recognizes as a criminal referendum which took place in Crimea on 16th of March, 2014. The referendum, conducted virtually at gunpoint as Russia’s armed troops were visible at every polling station, were announced the following day. That is the day that Russian occupation officially began. We take a look at Crimea today, two years into occupation, to see what it is Crimea and Russia have to celebrate.

Prospective from the outside

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Black Sea Fleet Flagship on its way to Syria

In many ways, Crimea is much like Abkhazia, North Ossetia, Transnistria, and occupied regions of Donbas. All of these regions became the victims of the Russian aggression. On the other hand, Crimea stands apart from those regions because of the one key element – The Black Sea Fleet. The naval base in Sevastopol was founded in 1783 when the Russian Empire seized the peninsula and the city. The main task of the base within the Soviet Union was to exhibit Soviet muscle in the Mediterranean. After Ukraine gained independence in 1991, the majority of naval forces remained in the hands of Russia. In 1997, it was agreed that the fleet of the Russian Federation would stay in Sevastopol until 2017. In 2010, then-president Victor Yanukovych signed a notoriously deceitful agreement, according to which the navy would remain on the Ukrainian peninsula until 2042. As soon as Crimea had been illegally annexed, the Russian Federation denounced these agreements and started to expand its force potential in the peninsula.

Only a year and a half after Crimea’s annexation, Russia became involved in another conflict – Syria. By becoming an active party to the Syrian conflict, Russia managed to connect two regional conflicts in the Mediterranean and the Black Sea into one front line from Tunisia to Donbas in East Ukraine, state the experts from Maidan of Foreign Affairs in its first annual report “The Situation In Annexed Crimea And The Strategy On De-occupation.”

According to these experts, in September-October 2015, realizing the complexity of supplying the Russian base in Syria by sea, the Russian Federation bought at least 8 civilian dry-cargo ships, including them as military vessels under the Black Sea Fleet’s brigades of auxiliary ships. To protect the base in Syria, Russia transferred a brigade of marines from the Black Sea Fleet from Sevastopol.

In October 2015, Ukrainian intelligence learned that bodies of 26 Russian marines had arrived at Sevastopol from Crimea. In November 16, 2015, a new submarine of the Black Sea Fleet of the Russian Federation Rostov-on-Don conducted a missile attack on Syrian territory from the Mediterranean. 

Due to the inability of the Russian command to ensure normal sanitary conditions, numerous cases of infectious diseases of Armed Forces personnel on the territory of Syria have been observed,” states the Ukrainian intelligence report on the situation in Syria.

In 2016, new reports appeared of Russian ships from the Black Sea Fleet arriving in Syria.

In this context, the risk of reactivation of conflicts in the South Caucasus (Georgia, Nagorno-Karabakh) significantly increased in order to block new projects in the transport of energy to Europe from the Caspian Sea and Turkmenistan through the territory of Turkey by Russia, state the experts from Maidan of Foreign Affairs.

Peaceful life

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The prices for food in Crimea became significantly higher. Photo: RFE/RL

Crimea is clearly a critical strategic military asset for Russia. However, Russia seems to have left behind the ordinary people of the peninsula while pursuing its military goals.  According to Russian media reports, the level of inflation in Crimea is the highest among all the regions of the Russian Federation. In 2015, inflation reached 26.4% compared to the 12.9% inflation of the whole of Russia. Vitaliy Nakhlupin, “Vice Prime Minister” of the installed government of Crimea, explains that the process of aligning the weak economy with stronger economy caused the inflationary cycle. “We were lucky from the point of view of wage growth levels. However, this increase in wages provoked an increase in prices. It was the [natural] alignment.”

Indeed, salaries increased in terms of the conversion from hryvnyas to rubles, first and foremost, for state employees. However, high inflation has eaten all the incomes of Crimea citizens, says the expert of Maidan of Foreign Affairs, Crimean Yuriy Smeliyanskiy:

If we look at the pre-occupation period to today, we can say that the purchasing power of the currency in Crimea has fallen in 8-10 times.”

He cites three main causes of the continuing rise in prices on the peninsula. First, Russia itself is a country that is dependent on imports. It cannot survive without supplies from abroad. Second, the correlation between dollar, ruble and a barrel of oil continues to push prices upward. When the US government decided to start a policy of strengthening its national currency, the price of the dollar started to rise. Therefore, the price of oil and the ruble will continue to fall. Third, without an industrial water supply, Crimea cannot adequately provide its agricultural needs. Thus agriculture has become dependent on weather conditions.

The expert emphasizes that military retirees, pensioners from the intelligence services, government officials and those who serve in the occupation army have higher purchasing power, because occupation authorities have encouraged their services. Because Russia needs Crimea only as a military base, little else stands to be developed there.

Business and Commercial Enterprises

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Famous Nikita Botanical Gardens now nationalized under Russian occupation

After the occupation, Russia hurriedly “nationalized” businesses on the peninsula. According to the official data, around 400 Ukrainian companies have been “nationalized.” Among them 200 health centers, all ports, airports, water and power facilities, railways, wineries, elevators, agricultural enterprises. Also national treasures such as Nikita Botanical Gardens, the famous children’s center “Artek,” a large mining company Chernomorneftegaz, and the shipyard “More” have also been expropriated.

In total, the number of government-seized enterprises and organizations in Crimea is more than 4,000, state experts. After the annexation, many people were forced to simply abandon their businesses. First, because many businesses were oriented at a Ukrainian consumer base in Ukrainian Crimea. Second, reregistration is a lengthy process, requiring a lot of time and energy. Some tried to sell their businesses, but were unable to find buyers. However, many businesses were just stolen.

According to Zerkalo Nedeli journalists, “nationalized” assets were allocated to agencies, clans and certain people (in Russia). Trade union sanatoriums, state cottages, conservancy areas, wine concern Massandra, champagne factory Noviy Svet and other entities are listed at the site of Russian President’s Administrative Office. All the stolen assets operated in a marauding way. Any investment funds are not allocated for development.

Technically the method of direct expropriation is not formally applied towards private enterprises, but another mechanism is used – raider takeovers and changes in management staff involving “Crimean self-defense” forces. Before “nationalization,” officials spread false information about bankruptcy of a company or accuse it of something untoward. This practice is applied mostly to businessmen who support the idea of the territorial integrity of Ukraine and oppose Russian occupation. In addition, small and medium-sized businesses in Crimea are systematically destroyed too as self-employed people are considered a “risk” by occupation authorities.

The fact of the matter is that there is no such notion as “nationalization” in the Constitution of the Russian Federation. There it states that “the expropriation of property for state needs can be conducted only with prior and fair compensation.” There is a similar provision in the current Protocol to the European Convention on Human Rights, ratified by Russia. And the Civil Code of the Russian Federation states that in the case of adoption of a law terminating the right of ownership, the losses suffered by the owner as a result of such act – including the value of the property – shall be reimbursed by the state, and all disputes are to be settled in a court of law.

However, Russia has not adopted any law on nationalization. Its implementation was based primarily on the decision of the State Council of the Autonomous Republic of Crimea “On the independence of the Crimea”, adopted on 17 March 2014.

The acts of the Crimean parliament did not mention the word “nationalization” of the property of private individuals. To transfer these assets to the state it was enough to add them to the list of the republican property in the appendix to the decree of the State Council on April 30, 2014.  There, the State Council Acts does not even describe the reasons for such transfers. If the former owners want to try to return the “nationalized” assets, they must appeal to the State Council all decisions through all the levels of the Russian justice system, including the Constitutional Court. And then, and only then, they can appeal to the European Court of Human Rights, whose decisions the Russian Federation has declared it is no longer obligated to follow.

Ukrainian officials state that so far the occupation “authorities” of Crimea assigned Ukrainian property in the amount of about 50 bn UAH (USD 1.8 bn).

Tourism and Public Image

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Coastal residents can no longer earn a living from seaside tourism

Before Crimea’s annexation, the images that would pop into Ukrainians’ minds when they thought of Crimea were summer, sea and mountains. However, it is hard to say in real numbers how much the peninsula was dependent on tourism. Just after the occupation, Boris Nemtsov, the Russian opposition politician killed near the Kremlin in February 2015, used to say that tourism made up 40% of Crimean economy, but that “[Russian] propagandists, resigned themselves to the failure of the [post-occupation] tourist season, started to lie that Crimea’s tourism wasn’t significant.”

The truth is that tourism in Crimea never used to be a priority direction for development for the officials. According to information from Ukrainian media before the occupation, around 80% of the tourist industry in the peninsula was working in the shadows. Of the 6 million tourists who used to regularly visit Crimea before 2014, only 1.5 million stayed in the sector which was working legally. Others chose private households. So Crimea’s treasury did not receive significant revenues from tourism.

Illegal business activities used to be one of the main problems on the peninsula under Ukraine. Crimean entrepreneurs who used to work legally would often report to the Ministry of Revenues representatives that such “pseudo-entrepreneurs” were working under the protection of law enforcement forces, deputies of all levels and officials, and no one can do anything about them.

While such “pseudo-entrepreneurs” were trying to get a bigger share of the pie during the summer so they could have a rest in the other months, the Crimean treasury was making up the rest in excises taxes.

After the illegal annexation, neither the legal nor illegal tourism sector of Crimea could earn money. According to Oleksandr Liev, former Minister of Tourism of Crimea, before 2014, 67,4% of tourists were Ukrainians. Occupation, in fact forced Crimean tourism to lose the majority of its tourists. Moreover, the majority of Russian tourists who came to the peninsula after the annexation were state employees and poor people, who were vacationing on the money of Russian taxpayers. Of course, Russian rallied with positive messages that Crimea had a great tourism season. However, according to Liev, 100,000 families who used to earn money from tourism, were left with nothing.

For Crimea’s tourism season of summer 2016, there are also positive predictions in Russia. For example, Russian media Ria Crimea states that rates of booking accommodation facilities today are much higher than they were last year at this time. The“Ministry of Resorts and Tourism of Crimea” expected that 4.9 million of tourists will come to Crimea in the coming season. It is fair to say, that there is one benefit for the peninsula from a tourism point of view. Egypt and Turkey, two favorite destinations of Russians, are closed for them this year due to political reasons. That might attract some Russians to Crimea. However, even Russian tourist operators say that no more than 30% of Russians who used to chose Turkey or Egypt will end up coming to Crimea.

Even Russian tourist operators admit that the high prices and inflation on the peninsula will become a significant barrier for tourists.

Dependence on Ukraine

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Crimea under power blackout

The energy blockade in Crimea revealed that Russia cannot provide Crimea with electricity in required amounts.

Russian and Western experts noted that since the annexation of Crimea by Russia, maintenance costs of the occupied peninsula for Russia are around USD 3 billion. So after two years it has become clear that Ukrainians meant when they predicted that Crimea would be a subsidized region.

Before the occupation, around 80% of  the peninsula’s fresh water needs were fulfilled by the North Crimean Channel and around 80% of needs in electricity were fulfilled by Zaporizha and Kakhovka electricity stations (Ukraine). Also, Crimea was financially independent only for 34%, the other costs were subsidized by the state budget of Ukraine.

By joining forces, state and Ukrainian activists have made the price for occupation even higher. In 2014, Ukrainian authorities stopped the flow of water from the Dnipro River to the North Crimean Channel, which also provided water for off-channel reservoirs of the peninsula. Currently, farmers and ordinary people feel an acute need in fresh water, but the so-called authorities of Crimea are regularly suspending the water supply. And actually there is no other choice, because the reservoirs are always empty and remain dependent on weather conditions.

Also the peninsula is still reaping the fruits of the energy blockade which were started in October 2015. Since the 1st of January, 2016 Ukraine has not provided any electricity to Crimea. All the technical problems with power lines were solved. However, in the new year the old contract for supplying energy was over. In the new one, according to the international legislation, Ukraine stated that Crimea is temporarily occupied by Russia. Russia refused to sign such a contract. In the end, for several months in a row, Crimea lives under conditions of regular energy shortages. Despite the fact that Russia managed to fractionally launch the Kuban energy bridge, the residents of Crimea are still suffering from rolling blackouts. While Russian propaganda creating myths to explain the situation and states it will soon solve the problem by launching another line of the energy bridge, locals continue to experience energy deficits on transport services, dark city streets, elevators, and so on.

Since September 2015 Crimeans also feel the results of the transport blockade initiated by Crimean Tatars and the local Right Sector organization. It limited energy commodity circulation between Ukraine and the peninsula. In January 2016, this blockade was officially formalized when the relevant act was signed into effect by The Cabinet of Ministers.

Moreover, a few days ago the leader of the Crimean Tatars,Mustafa Dzhemilev, stated that Turkey has now joined in the food blockade. According to him, after Russian and Turkish relations deteriorated, sanctions “were practically initiated by the Russian Federation itself”, and so Turkey de facto joined the sanctions against Russia, which affected supplies to annexed Crimea.

The Human Rights Situation

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Refat Chubarov, Сhairman of the representative body of Crimean Tatars at court hearing on Russia’s prohibition of Mejlis Council

As of February 1, 2016, according to The State Emergency Service of Ukraine, almost 22,000 displaced persons came to Ukraine from Crimea and Sevastopol. Among all of Ukraine’s displaced people, Crimeans experience less bias from the locals than people from Luhansk and Donetsk Oblasts. This is because the people who moved to Ukraine from Crimea did so not because of warfares, but because for political reasons. Thus it was their conscious choice to remain a part of Ukraine.

Indeed, to be a Ukrainian on the peninsula became dangerous and almost impossible. For example, during two years of the occupation, all media in Crimea that had been in the Ukrainian language disappeared. Education in Ukrainian in schools is again forbidden, as it was in days of the Russian Empire. The only faculty of Ukrainian language scholars in Crimea was disbanded.  Demonstrations in honor of a symbol of Ukraine, the poet Taras Shevchenko, were also forbidden this year. Recently, the so-called authorities of Crimea have forbidden any public events in Simferopol, and explained it by emergency reasons of technological and nature on the peninsula. However, this prohibition is never mentioned at the events organized by the authorities.

The NGO Crimea SOS has documented more than 200 cases of human rights violations in Crimea, which include kidnappings, illegal detentions, and abuse of Crimean Tatars, activists, journalists and others.

The most recent attack on Crimean Tatars from the Russian Federation and Crimean criminal authorities is an attempt to forbid the Mejlis Of The Crimean Tatar People, a single supreme plenipotentiary representative and executive body of the Crimean Tatar people, between the sessions of Qurultay. The official reason for this prohibition is that Mejlis have been declared an extremist organization. However, in fact, it is not a secret that the body and its representatives are the most active in opposing the occupation.

These two years of occupation have also demonstrated that even maintaining an active pro-Russian position does not help in having a better life in Crimea. Russia has demonstrated by its practices that it is not interested in the life of local residents, unless they are connected to the military sector. The Russian Federation considers the peninsula only as a military base. Today, around 50-60 thousands of military personnel are based in Crimea. According to the stated plans of the Federation, in the near future, around 120,000 more military personnel are planning to be based in Crimea. Ukrainian journalists counted that to provide the military base with its needs life ratio of civilians to the military ratios should be 4: 1. That is, four civilians (a trolleybus driver, a salesman, a kindergarten teacher, etc.) are serving to one military man. To maintain a military group numbering 120,000 requires the presence of 480-500 thousands of civilians. Some of these civilians are members of families of military men. Even if the number of necessary civilian population in Crimea were to double, (in terms of economic optimality), there should be no more than 1 million civilians in Crimea. The rest are not needed. At the beginning of 2014, 2.34 million people used to live in Crimea. According to the Russian population census conducted in 2015, that number has been reduced to 1.97 million. Moreover, compared to the Ukrainian population census, Russian data have shown dramatic changes in the ethnic makeup of people who now live in Crimea: 68% are Russians vs. 58% in 2001, 15.7% are Ukrainians (against 24.5% in 2001) and 10.6% are Crimean Tatars (against 12.1%).

Edited by: Paula Chertok

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  • Quartermaster

    Putin’s Russia is building a debt that will be extracted from the Russian people in the worst possible way. As the Apostle Paul expressed it “God is not mocked. What a man sows, that shall he also reap.” Putin has sown theft, death, and destruction.