Russia and Ukraine used to be siblings, but now they aren’t even friends anymore. After the takeover of Crimea in 2014, the Russian economy shrunk by nearly 10%, Natasha Doff reported for Bloomberg.
Russians are paying the price
Territorial conflicts divide neighbours, even when we are talking about countries. According to Bloomberg’s columnist, it is the ordinary Russians that are paying the price for the takeover of the Crimean peninsula in 2014.
The 10% loss of the GDP (USD 150 billion) had been caused by both the drop in prices of oil in the world markets (4% of the decline in the economy of Russia may be attributed to this factor), while 6% of the shrinkage is due to the economic sanctions by the U.S. and the European Union, Doff reports.
Ukrainian government considers Crimea a ‘temporarily occupied territory’, while Russia’s position is that they took over what was rightfully theirs historically and legitimately.
Five years into the new era where Crimea is a part of the Russian Federation, and there is little happiness about it in the continental part of the country, where people are starting to question the giant investment into reviving the recently acquired region and the costs to the economy that are obvious.
Real incomes of Russians have been dropping for the last 6 years, according to MK.ru. While earnings in rubles grow, locals are able to purchase less goods and services than 5 years ago.
The USA and the European Union haven’t recognized the accession treaty in regard to Crimea.
Foreign investment is dwindling.
If anyone is better off, it’s residents of Crimea. Their incomes were on the level of 15,700 RUB (USD 230) in 2015, now it’s 22,200 RUB (USD 343). In the whole of Russia, monthly income is 32,600 RUB on average, or around USD 459, according to today’s exchange rate.
For the fifths anniversary of Russia’s taking over Crimea, a public opinion survey asked Russian residents whether the event brought more good or harm. In December 2014, 67% of locals were positive about the change, while in March 2019 only 39% of respondents agreed that “it did more good than harm”.