Correction

26. Februar 2024

In the Heri­ta­ge Foun­da­ti­on Eco­no­mic Free­dom pos­ting, I allu­ded to the pro­mi­se of hig­her pen­si­ons in Cri­mea under the rus­si­an occup­a­ti­on, which was part­ly why Ukrai­nes eas­tern demo­gra­phic (which is also older) voted for uphol­ding eco­no­mic ties with russia.

Turns out, in rea­li­ty the­re are huge caveats with this “view”:

Socio-economic deve­lo­p­ment

Befo­re the annex­a­ti­on, Rus­sia has pro­mi­sed Cri­me­ans an incre­a­se in wages and pen­si­ons. In 2015, the average wage in Cri­mea incre­a­sed by 68 euros (up to 330 euros) com­pa­red to pre­vious Ukrai­ni­an wages. Over the next peri­od, the average ear­nings of Cri­me­ans incre­a­sed to 452 euros, but they have decli­ned to 423 euros sin­ce 2020. The modal wage (recei­ved by the vast majo­ri­ty of the working popu­la­ti­on) is about 300 euros. Almost 18% of Cri­me­ans recei­ve a wage of less than 172 euros.

The situa­ti­on with pen­si­ons is simi­lar: the average pen­si­on was slow­ly gro­wing during the occup­a­ti­on peri­od and reached 166 euros in 2021. Howe­ver, this figu­re does not cor­re­spond to the real situa­ti­on due to the signi­fi­cant num­ber of reti­red mili­ta­ry who have actively sett­led on the pen­in­su­la after the annex­a­ti­on and have a signi­fi­cant­ly hig­her pen­si­on. So, the real pen­si­on coverage for most Cri­me­an pen­sio­ners is not more than 130 euros.

Along with the tran­si­ti­on to Rus­si­an wages and pen­si­ons, Cri­mea app­lies Rus­si­an pri­ces for goods and ser­vices that are signi­fi­cant­ly hig­her than the Ukrai­ni­an ones. Accord­in­gly, pri­ces incre­a­sed by 43% (for pro­ducts – by 53%) in 2014, and by ano­t­her 28% (by 23% for pro­ducts) in 2015. In the fol­lowing years, infla­ti­on rates slo­wed to 5-7% per year, but in 2021, food infla­ti­on was 11% in the Auto­no­mous Repu­blic of Cri­mea and 14% in Sevastopol.

Rus­sia has inves­ted signi­fi­cant funds in Cri­mea (more than 17 bil­li­on euros during the occup­a­ti­on peri­od), but most of this money was spent on large-scale infra­st­ruc­tu­re pro­jects (“Cri­me­an Bridge”, Tau­ri­da high­way bet­ween Kerch and Sevas­to­pol) and the mili­ta­ry industry.

src: click (Uni­ver­si­ty of Tur­ku, Fin­land (2022))

see also:

From Rus­sia with love

While the Cri­me­an eco­no­my has done well on a sur­face level sin­ce its annex­a­ti­on, the regi­on has recei­ved more than a litt­le bit of help. Huge sub­si­dies from Moscow have been a main­stay sin­ce 2014, fluc­tua­ting bet­ween $1bn and $2.7bn per annum (see Fig 1). The­se figu­res are not necessa­ri­ly put­ting a signi­fi­cant strain on Russia’s eco­no­my, which is the world’s 12th-largest by nomi­nal GDP, but they do appe­ar to be con­tri­bu­ting to a slow­down (see Fig 2).

Just a few mon­ths after Cri­mea for­mal­ly rejoi­ned the Rus­si­an Fede­ra­ti­on, Moscow laun­ched a pro­gram­me cal­led the Socio­eco­no­mic Deve­lo­p­ment in the Repu­blic of Cri­mea and the City of Sevas­to­pol. The initia­ti­ve has a bud­get of RUB 669.6bn ($10.06bn), 95.9 per­cent of which comes direct­ly from Russia’s federal budget.

src: click









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