The devastating human, economic costs of Crimea’s annexation

People in the Peninsula say they are subject to poor social services, dirty water and spiralling prices.

People walk past a graffiti depicting Russian President Vladimir Putin seen on a residential building in Simferopol, Crimea, August 19, 2015. The sign on the graffiti reads, "Ours" [File: Pavel Rebrov/Reuters]

Larisa Vasilyeva claims Crimea’s annexation killed her brother.

But Igor Vasilyev did not die during the Black Sea peninsula’s 2014 takeover from Ukraine.

At 67, he was also too old to fight for pro-Russian separatists in southeastern Ukraine who were so inspired by Crimea’s “return to the homeland” that they took up arms against the central government.

For years, Vasilyev struggled with a chronic heart condition.

Before the Kremlin channeled billions of dollars to restore Crimea’s infrastructure and “optimised” healthcare by cutting costs, his village district outside the Urals Mountains city of Chelyabinsk had four ambulances, and one always came to his rescue.

But on November 13, 2015, the only remaining ambulance was late, his sister said.

“It … arrived three and a half hours later. To issue a death certificate,” said Vasilyeva, 71, who refused to identify the name of her village.

Crimea’s annexation skyrocketed President Vladimir Putin’s approval ratings to 88 percent.

The Black Sea peninsula’s sandy beaches, cypress groves and wines make it seem to some like a vacation paradise, given that most of Russia’s coastline faces the Arctic and Northern Pacific.

But if one looks at Crimea seven years after the annexation through the lens of financial analytics, the peninsula that has no land border with Russia appears entirely different.

It is a Pyrrhic victory that inflicted a devastating toll – triggering Western sanctions, hobbling Russia’s economic growth, noticeably affecting the livelihoods of average Russians and even contributing to a crisis in the once-famous space industry.

The Kremlin spent tens of billions of dollars on infrastructure projects in Crimea such as the $3.7bn, 19 kilometre-long bridge linking the peninsula to mainland Russia.

It splashed lavishly on new highways and hospitals, power plants, transmission lines and subsidies for Crimea’s rapidly swelling population of more than 2.5 million.

Western sanctions imposed on Moscow after the annexation cost Russian corporations more than 100 billion, or about 4.2 percent of Russia’s gross domestic product (GDP), according to a study by Daniel Ahn and Rodney Ludema, former top economists at the US Department of State.

Putin’s efforts to shield the corporations, most of which are controlled by his former colleagues and neighbours, add up the losses to 8 percent of the GDP, said the study published in November in the European Economic Review.

“Eight percent is not anything to sneeze at. It is a big number,” Ahn told reporters in December.

Other analysts, however, dispute the number.

“Direct losses are minuscule,” Ukrainian analyst Aleksey Kushch told Al Jazeera. He said the sanctions resulted in the loss of just one percent of Russia’s GDP.

However, Russia’s bilateral trade with Ukraine tanked from its peak of almost $50bn in 2011, and annual losses amount to at least $20bn, he said.

The second-most populous ex-Soviet republic with a population of 43 million, Ukraine was Russia’s major trade partner and a source of labour migrants, food products, steel and hi-tech products.

Dozens of Ukrainian factories and research facilities that worked for Russia’s military-industrial complex and space industry severed their ties overnight, inflating the cost of new arms and spaceships.

But Western sanctions over the annexation, which included a ban on advanced technological exports, crippled Russia’s already troubled space industry, an expert said.

“They seriously slowed the development of Russia’s space programme,” Pavel Luzin, a Russia-based analyst for the Jamestown Foundation, a think tank in Washington, DC, told Al Jazeera.

Beef over water

Many in Crimea supported the annexation because of Moscow’s promises to increase their salaries and pensions, build better roads and boost tourism.

But these days, soaring prices, corruption and spiralling pressure on any form of dissent make them wonder why they voted for “joining” Russia in the March 2014 “referendum” that has not been recognised in Ukraine or internationally.

“To make people less agitated, [Moscow] has to spend colossal amounts to solve their problems,” Nikolay Poritsky, Crimea’s former minister of housing and communal services under Ukraine, told Al Jazeera.

Life under Russia became complicated.

A butcher who lives outside Simferopol, Crimea’s administrative capital, said that after the annexation, he lost access to Ukrainian meat products, and it took him months to find a reliable supplier in southern Russia.

After the first purchase, the supplier tried to sell him low-quality frozen beef.

“He said, ‘You live far and may not come back again, and I have to feed my family,’” the butcher, who spoke on condition of anonymity, told Al Jazeera.

He now only opens his shop once a week to sell chicken – because the demand is too low.

There is another looming catastrophe awaiting those in Crimea, at home.

Crimea is mostly known because of its southern coast, a subtropical, postcard-perfect sliver of verdant land filled with hotels, resorts and former residencies of top Communist leaders and Russian czars.

Most of the peninsula is, however, arid steppe and mountains.

The Soviet-built North Crimean Canal supplied 85 percent of water from the mighty Dnieper River making irrigated agriculture and population growth possible.

Ukraine shut down the canal in 2014, nearly obliterating agriculture in Crimea and forcing de-facto authorities to ration water supply in urban centres.

These days, Simferopol, the second-largest city on the Crimean Peninsula, gets water for three hours a day on weekdays and for five hours on weekends. Apartment building residents rush to fill their baths.

The water pumped from nearly-depleted reservoirs and polluted wells is sometimes dirty.

“I filled a bath once, and the water was the colour of brandy,” Edem Kurtveliyev, a medical doctor who lives in a nine-story apartment building in southern Simferopol, told Al Jazeera.

De-facto authorities announced multi-million projects to pump water from aquifers, but admit that the sole long-term solution to the water crisis is construction of pricey desalination plants.

“Desalination is the only way out,” Crimea’s pro-Russian head Sergey Aksyonov told the RIA Novosti news agency in December.

Four months later, he compared Ukraine’s refusal to reopen the canal to “state terrorism” and “genocide”.

Source: Al Jazeera