Today the Russian government will discuss the possibility of giving 13.1 billion rubles to Crimea and Sevastopol from the Russian budget. The law on the federal budget for 2014-2016 presupposes the possibility of giving 343.9 billion rubles to provide support for the economy, small and medium-sized business, employment, monotowns or social needs. It is proposed to use these funds to give 10.7 billion rubles to Crimea and 2.4 billion rubles to Sevastopol to balance the budgets of these subjects of the Russian Federation.
Alexei Skopin, professor of regional economy and economic geography at the Higher School of Economics, discussed the problems that Moscow will encounter in Crimea. "Ukraine did not treat Crimea like a pearl that should be attended to and gives back high taxes but as a territory that can leave the country at any moment, so there was no sense in investing in it. Moreover, there are many military facilities in Crimea, because from the geopolitical point of view it is an exceptionally convenient place for military bases. The infrastructure of those bases is in bad condition. Their military ability is marginal, as we see in the attitude of the Ukrainian authorities toward Crimea."
The reconstruction of these facilities will require huge investments. Answering a question as to whether those facilities are necessary, Skopin said: "Certainly they are, because Russia is strengthening its positions in the south. Russia does not allow it in Syria, because Syria is on the Mediterranean while Crimea is on the Black Sea."
Crimea has not only geopolitical but also economic potential. "We can introduce advanced technologies. There are obviously great opportunities in agriculture in those spheres that have been missing in the Russian agriculture so far. If we add Crimea to the regions of Krasnodar, Rostov-on-Don and Stavropol, we will provide vegetables, fruit and other southern agricultural products. As for industry, there are great conditions for ship-building. But the industry has to be reanimated. Space building started in Crimea, there are unique air fields for small aviation. In addition, there are wonderful conditions for tourism. This potential will play only with mass investments under certain conditions. At the moment there is very little money and every financial step is weighed. The investment conditions should be very clear from the very beginning. Why did the status of economic zone not bear fruit everywhere in Russia? Because it was defined by federal law, but at regional level there were decisions that investors did not understand. How can one act in these specific economic zones? This status is needed. But, on the other hand, it is needed in a form that investors understand the rules of the game and can calculate for at least 5-10 years."
Vestnik Kavkaza
