By Vestnik Kavkaza
In the last two weeks many Russian experts have said that Crimea has every chance to turn from a sponsored region to a donor-region, as industry and trade are developed on the peninsula.
However, one of the main problems of the peninsula is the dependence of Crimea on electricity and water supply from Ukraine. According to Premier Dmitry Medvedev, the issue should be settled through international talks: “As for electric power, there are options for linking Crimea to the electric power system of Russia through the Kerch Strait or construction of an electric power facility on the peninsula. The position should be assessed quickly, and there is potential for this. Moreover, gas production in the region should be boosted. Gazprom has an initiative in the sphere.”
According to the analyst of Investcafe, Mikhail Kuzmin, turning Crimea into a show window will demand huge investments. The main factor is the legal status of Crimea. Will those who want to organize business go there? Kuzmin also wonders how one of the leading industries of Crimea, tourism, will develop: “Probably Russians will go there, but whether it will be wide-scale, whether it will be safe, depends on the development of the political situation today. If military tension grows, nobody will go there. Even today there are views that the Crimean tourist season is scuttled, as Ukrainians won’t go there; foreigners who have never been active tourists in Crimea won’t go there either. Only Russians are left; and apparently some people will support Crimea and we will see development.”
Partially, the issue is already settled – Russian structures and state companies will send their employees to spend vacations in Crimea. The Vice Premier for Crimea, Dmitry Kozak, confirmed: “There is such an address to Russian business, those who work in the northern regions and those who distribute resort hotel vouchers in Russia, so that they would reorient their business to Crimea. It is one of key sectors of the republic’s economy, and we want them to buy trip tickets for their employees not to Turkey or Cyprus, but to Crimea. A certain plan, a road map in support of the resort complex of the Republic of Crimea in the transition period to April 5th.”
Today, granting the status of special economic zone to Crimea is being discussed. Enterprises of the peninsula will get benefits till January 1st, 2015. However, professor of the chair of the stock market and investment market of NRU-HSE, Alexander Abramov, reminds that “the economy of Crimea is small – $4 billion is its gross regional product, even though 6 million tourists visit the peninsula annually. If every tourist spends $1 thousand, it will be $6 billion. That is more than the gross regional product. Russia has the money and desire to make a show window. But there is a risk for Russia, not in investment safety, but in its own effectiveness. We will have to show that in Russia people don’t steal, that Russia is able to implement the projects with Crimean residents effectively, inexpensively and without violating the interests of the local population.”
