The New Geopolitics of Energy
Since Russia annexed Crimea in March 2014, the Ukrainian peninsula has become something akin to a “black box,” with little verifiable data on conditions available to counterbalance the official Russian narrative that all is well in the Kremlin’s newest territorial holding. Now, however, a new study has provided perhaps the most detailed look to date on the true state of political and economic play on the peninsula. Published by the Ukrainian Institute for the Future, a new but well-connected think tank based in Kiev, the report—entitled “Crimea: Three Years of Occupation”—draws on data from local sources and the analysis of seasoned specialists to paint a damning picture of the human and economic costs of Russian rule, and to make a compelling case that the Kremlin’s Crimean project is a threat to Crimeans themselves, as well as to everyone else.
Russia’s control of Crimea, the report notes, represents a massive social engineering initiative. Under Moscow’s administration, Crimea has seen the imposition of a raft of draconian new laws governing everything from military conscription to alcohol consumption, a surge in human rights abuses, and the “systemic persecution” of the region’s indigenous Tatar population (whose governing body, the mejlis, has been formally banned as a “terrorist organization.”) The goal of this effort is twofold: to subjugate the region’s native population and to tether it more closely to Moscow.
The results are striking. To date, some 10 percent of Crimea’s total population (over two million in 2014) has fled. These people have been replaced through an influx of Russians—mostly civil servants, military personnel, or retirees—who have been given significant economic perks by the Russian government for resettling there. And this population shift is still a work in progress. As the study notes, Russia’s official plans for the area envisions an increase in the Crimean population by another one million Russians in the next five years.
To date, some 10 percent of Crimea’s total population has fled.
Economic conditions on the peninsula, meanwhile, have deteriorated markedly under Russian rule. Agriculture, once the mainstay of the local economy, has collapsed, with production of staples such as rice, soy, and corn now “almost fully destroyed,” and a surge in the once largely self-sufficient region’s need to import commodities like milk, meat, and eggs. (In just one example, Crimean meat production fell by an estimated 84 percent over the course of 2016.) The region’s banking sector, meanwhile, has cratered, ravaged by Western sanctions and an exodus of Ukrainian financial institutions that has led to an increasingly cash-intensive economy.
What has grown, however, is the size of the state. Crimea’s annexation in 2014 was followed by an infusion of Kremlin funding intended to bring conditions in the territory (such as infrastructure and pensions) up to par with those of Russia’s other regions. According to Ukraine’s Razumkov Centre, Russia now foots the bill for approximately three-quarters of Crimea’s budgetary expenditures—accounting for a whopping $1.4 billion in 2016. (By contrast, the Kremlin has progressively tightened its fiscal belt in relation to Russia’s other federal subjects—resulting in increasingly dire economic conditions in those places.) All this has come at a high cost; Moscow has been forced to cancel a string of high-profile projects in other regions in order to pay for its Crimean adventure. None of this appears to have prompted Russian officials to rethink their policies, however.
For the Kremlin, control of Crimea is also a distinctly military project. The Crimean city of Sevastopol has long served as the home port for Russia’s Black Sea Fleet (via a long-term lease from the Ukrainian government), and the region is vital to Russia’s ability to project naval might. Moscow’s annexation of the territory has been followed by a major, systematic expansion of Russia’s military presence there—and, by extension, in the Black Sea region.
Since the annexation, the study notes, Russia has reinforced its existing fleet of ships in the Black Sea with the deployment of at least six new vessels, as well as new land-based missile battalions. At the same time, it has doubled the number of naval personnel it has stationed in Sevastopol (from 12,500 in 2014 to over 25,000 today). In other words, “the annexation of Crimea allowed [Russian President Vladimir] Putin not only to ‘save’ its Black Sea Navy, but to transform it into a threat… for the whole region.”
Russia has attempted to portray its annexation of the peninsula in historic terms, as a reclamation of lost lands and a culmination of its destiny. The data, however, suggest that Crimea has become a tremendous economic millstone for the Kremlin—one that the Russia, still languishing under the weight of multilateral sanctions and low world oil prices, can ill afford. As Taras Beresovets, the study’s editor, puts it, “Crimea is a time bomb for Russia”—one that could, sooner or later, threaten its society and put its “neo-imperial project” in jeopardy by depleting the country’s already-taxed national resources.
For the former Soviet republics, meanwhile, Crimea’s situation should serve as a cautionary tale. The Russian government has consistently pushed an expansionist narrative throughout the territory of the former Soviet Union, seeking to entice ethnic “compatriots” (a term it uses very loosely) in countries such as Kazakhstan and Moldova to rejoin the Russian Federation. Crimea shows what it looks like to be part of the new Russia—and provides yet another reminder of why, having fought so hard to gain their independence from Moscow a quarter century ago, those nations should want nothing of the sort.