Article by: Olena Makarenko
Three years after the illegal annexation of Crimea, the topic about the peninsula’s status turned into a political ping-pong. Politicians at different levels are arguing which step should be taken next, whether sanctions against Russia should be lifted, and whether Crimea should be “traded” in exchange for Russia leaving Donbas alone. In reality the peninsula is abandoned both by Russia and Ukraine. And people living there are suffering the most, no matter whether they supported Russia or not.
The start of the occupation was accompanied by Russian promises and celebrations in Crimea and across the whole Russia, celebrating the “return of the peninsula back home.” However, after three years Crimeans lost what they had before but haven’t become full-fledged Russians. One thing they did receive in full, though, is a world of illusions promoted by the Kremlin’s propaganda machine.
However, over these three years, the Ukrainian government hasn’t done its best to turn Crimea back. The Ukrainian society still hasn’t seen a coherent strategy to de-occupy the peninsula. Let’s see where Crimea stands after these 3 years.
Russia’s broken promises
Crimeans will receive high salaries. Despite the expectations of Crimean residents who believed in the ideas of the “Russian world,” ordinary citizens live in poverty. Average wages there are lower than the Russian average. According to official Russian statistics, they amount to RUB 26,000 ($450) against RUB 36,000 ($623) across the whole of Russia. However, experts say that official statistics are inflated. Crimea Statistics place the average wages at $328. The lowest wages are in services sector – around RUB 9,000 ($155). An average school teacher receives RUB 13,000 ($225). Junior medical staff receives RUB 20,000 ($346) and a doctor – up to RUB 40,000 ($692).
According to Crimea Statistics, in 2016 living wages there amounted to RUB 9,500 ($164) and RUB 10,000 ($181) for the population able to work. But this index doesn’t take into account living expenses. The “Doner index” of the Open Data Day analytical organization ranked all the salaries of Russian regions against living expenses and found that the average salary is most often enough to cover food and rent.
Military men and civil servants receive the highest wages – around RUB 80,000 ($1385). The civil servants usually come from Russia and often are switched. The military sector was a priority for Russia since the beginning of the occupation.
Crimea will be full of tourists. Tourism is considered to be the main source of economic growth in Russia’s strategy on the social and economic development of Crimea by 2030 year. In 2016, Russian media informed that Crimea expected a record number of tourists last summer. The so-called Crimean authorities boasted that a record 5 million tourists visited the peninsula in the summer of 2016. However, this number first of all isn’t a record – Crimea received its largest amount of tourists, 6 million, in 2012, when the European Football Championship was conducted in Ukraine. Second, according to the experts, the number voiced over by the collaborative authorities do not correspond to reality.
“After the annexation in 2014 the number of tourists fell by 2.5 mn – quite a large amount, as the largest share of tourists were Ukrainians. In 2015, Crimea hosted 1.5 mn tourists, from which about 200,000 Ukrainian citizens and 1.3 mn were citizens of the Russian Federation, the country which occupied our peninsula. In 2016, the level of 1.5 mn was maintained,” said Oleksandr Liyev, Head of the Association of Hospitality Industry of Ukraine. According to him, his organization is the only one which counts the tourists coming to Crimea, taking into account the official amounts of passenger traffic and insider data from 100 travels destinations in Crimea.
Although the international sanctions against Russia do not concern the tourist industry directly, it does bear the consequences because of the sanctions in other areas – banking, transport, real estate etc.
Billions will be invested in Crimea. Russia does invest billions of rubles in Crimea but even now it can’t reach Ukraine’s level of investments before the occupation. In 2013, UAH 15.5 bn ($1.9 bn at the exchange rate of that time) was invested in Crimea. According to RFE/RL’s Crimean Service, after the occupation the amount of investments was RUB 26.5 bn ($697 at the exchange rate of that time). In 2015 the amount was higher RUB 47.6 bn ($784 mn, according to that time currency rate), but still much lower than the level of Ukrainian investments before.
In 2013, the largest share of money was invested into the industry sector (50.1%) and construction (28%). Under the occupation, the investment index dropped drastically. The nature of investments has also changed. Before the illegal annexation the majority of them were private (61.4%). Now the share of private investments to Crimea is only 22.7%.
The number of international investments has also reduced dramatically:
In 2013 it amounted to $176 mn.
In 2014 – $26.2 mn.
In 2015 – $31 mn.
The results of 2016 have not been received yet. Only the so-called Prime Minister of Crimea Sergey Aksenov boosted that $2.5 bn were invested in Crimea last year. However, according to Crimean Statistics, after 9 months of 2016 Crimea received only $324 mn.
Crimea will be food and energy independent. Before the occupation, Crimea consumed 900-1200 MW of electricity. 150-200 out of them were generated in Crimea, the rest was received from Ukraine. In 2015, Ukraine started a product and energy blockade of Crimea. It resulted in turning an activist protest into the state policy.
Despite the fact that the peninsula experiences power shortages, Russian media continue to repeat that “the blockade even helped Crimea to become energy and products independent.” The occupying authorities informe that the peninsula receives 900 MW, which should be sufficient to provide Crimea with electricity, especially now when production facilities and the majority of health resorts are not working. However, multiple chaotic power outages of ordinary house estates have become a rule, meaning that the actual power availability is way below the declared level. Ordinary citizens are the primary victims of power outages. The military units and civil servants are probably the last ones that will suffer, but the amount of their energy consumption is not something which will be announced publicly in Crimea.
Talking about food independence, propaganda slogans are mixed with the real problems which can not be hidden. For example, recently Nikolay Patrushev, Secretary of the Security Council of Russia stated that food self-sufficiency of the annexed Crimea is insufficient. He added that the agro-industrial complex of the south of neighboring Russia makes a significant contribution to ensuring the country’s food security.
Despite the blockade, some Ukrainian products can be found in Crimea. Despite there being no direct delivery of products to Crimea, suppliers still find ways to trade. Experts say that it’s impossible to monitor how many products are coming to Crimea from Ukraine and that the Ukrainian government has no idea of the numbers.
The construction project of the century. Since the very beginning of the occupation, Russian authorities promised to build the Kerch bridge over the Azov Sea which would connect Crimea to Russia. However, the deadlines were postponed several times. In spring 2016, Russian authorities acknowledged that the construction will be impossible to complete until 2019. In September 2016, it was stopped to to the lack of finances. The same month, the US Treasury Department expanded the sanctions against individuals and legal entities related to the occupation of Crimea and activities in the illegally annexed peninsula. About 100 Russian companies became targets of the sectoral sanctions. Among them there were companies related to the construction.
The competition for construction of the railway approach to the bridge was announced in 2016. Three attempts at it failed because of the lack of competitors – no one wanted to end up in the sanctions list. In the end, the Russian government hired a company with connections to Vladimir Putin.
Corruption in Russia is another reason for the slow progress of the construction.
International delegations. Inviting international delegations is one of the ways with which Russia tries to create the visibility of the international recognition of Crimea. However, these delegations are mostly unofficial and represent far-right forces. Among the official delegations which came to Crimea there were only representatives of Eritrea, Nicaragua and Laos.
Ukraine’s side of the coin
After 3 years of Crimean occupation. Ukraine still does not have a clear vision on how it is going to get the peninsula back.
Crimea for Donbas. In the end of 2016, a new idea appeared in the information field of Ukraine and abroad – to trade Crimea for Donbas. One of the most famous trendsetters was the the publication of the Ukrainian oligarch Viktor Pinchuk in the Wall Street Journal called “Ukraine Must Make Painful Compromises for Peace With Russia.” In it Pinchuk gave pieces of advice about what Ukraine should do, taking into account the new global trends, especially those in US policy. One of them was related to Crimea: “Crimea is Ukraine, but this position should not be an obstacle on the way of returning Donbas.”
Pinchuk is associated with the Ukraine’s ex-president Leonid Kuchma who was under control of Kremlin during his presidency. Now Kuchma is the member of the trilateral contact group on settling the situation in Donbas. Pinchuk himself has business interests in Russia, so his interest in “painful compromises” appears to be quite natural.
Ukrainian society perceived the idea of trading Crimea for Donbas as corresponding to Russian interests.
Officially the idea was perceived negatively also by the Ukrainian government. However, it have no clear suggestions of what to do.
The Ukrainian strategy. Ukrainian politicians claim that a strategy on the de-occupation of Crimea does exist. For instance, an MP from the Narodniy Front party voiced over the key points of this strategy in a political TV show:
“We do not divide Crimea and Donbas, both territories are occupied by the Russian aggressor. By the moment of withdrawing of the troops of the Russian Federation outside Ukraine there can’t be any plans of peaceful settlement,” said the MP.
He made another point about Russia compensating Ukraine for the damage caused by the aggression in Crimea and Donbas.
However, the Ukrainian government constantly falls under criticism for voicing over slogans and having no real strategy.
According to Refat Chubarov, the head of the Mejlis of Crimean Tatars, Ukraine know only the direction of action, but has no strategy:
“We are already late with this strategy. Now we have to as soon as possible to come up with a single formula for the restoration of the territorial integrity of Ukraine in its internationally recognized borders, including the Autonomous Republic of Crimea and the city of Sevastopol.”
Oleksandra Matviychuk, an activist and the coordinator of the Euromaidan SOS initiative, is confident that understanding that Ukraine fights not only for the territory, but for the people who live there should be a foundation for the strategy.
“Ending discriminatory policies towards people [living in occupied Crimea] should be one of the most important components of this strategy. A vivid example of these policies is the government’s decree ‘On the restriction of the supply of certain goods (works, services) from temporarily occupied territory to another territory of Ukraine and/or other territory of Ukraine to temporarily occupied territory,” said the activist.
She clarified that because of this decree, people who come to Ukraine from Crimea can’t take lots of their personal belongings with them. However, another decree lets Ukrainian oligarchs to continue trading with Crimea.
The international sanctions on people and companies related to the Crimean occupation work and now even Russian authorities can’t properly hide their losses because of them. Maintaining the sanctions will prevent Russian aggression from spreading to other parts of the world, as it restricts Russia from continuing its expensive military policy. However, the question of returning the peninsula and its reintegration into Ukraine is mostly Ukraine’s responsibility. Without a Ukrainian strategy, the process of de-occupation might be postponed for a much longer period than the construction of the Kerch bridge by Russia.