Monday, February 4, 2019

‘Money Flowing Like a River from Russian Regions to Occupied Crimea,’ Zubarevich Says

Paul Goble

            Staunton, February 4 – Many non-Russian republics like Chechnya and Ingushetia get more than 70 percent of their budgets from Moscow, Natalya Zubarevich says; but the largest monetary flows are going not to them but to Crimea and Sevastopol, “more than 100 billion rubles (1.6 billion US dollars)” last year alone.

            The regional specialist at the Moscow Independent Institute of Social Policy says that even all the republics of the North Caucasus taken together received only half as much. Each person in Crimea received almost five times as much in federal subsidies as Russians in the country as a whole (

                One can truly say, Zubarevich continues, that federal money is flowing to the peninsula “like a river,” something Russians may not have opposed when they were still affected by the “Crime is ours” euphoria but that is increasingly unsupportable five years on when they decidedly are not. 

            Moscow has been spending these enormous sums in Crimea, she says, “in order to show how happy life is in the Russian Federation.” But while it may have some success on the peninsula, that success is perhaps overwhelmed by the fact that all this spending is being financed by “other subjects of the Russian Federation.”

            Zubarevich says that she cannot call this policy just and she cannot say that other regions think it is either. “But other federal authorities are not interested in the opinion of the subjects: they take decisions on their own” without reference to what others think or feel. And these other regions not only are getting less but now can see that they are as well.

            Except for a few months before the presidential elections last year, Moscow has not increased transfer payments to all the others and it is unlikely to do so or even, given its current policy mix, be able to do next year.  Crimea meanwhile is developing in a way that is neither sustainable nor desirable.

                Almost all the development on the peninsula, she says, is the result of government money, about 85 percent of investments come from the budget because there is little interest among private entrepreneurs in investing there. As a result, in Crimea, “state capitalism with certain feudal aspects” is being established. 

            That should be a warning sign to Moscow, Zubarevich says, especially given the Chechen precedent.  One can “feed” a region for a long time on rich food, “but to shift it to a healthy diet already is very difficult.”

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