Russian Prime Minister Dmitry Medvedev was in Crimea today, promising major economic aid to the newly annexed peninsula, and also courting investment for the region, which will be a “Special Economic Zone” (SEZ).
SEZs in Russia get substantial tax breaks, particularly for investors looking to start up manufacturing facilities. The exclave of Kaliningrad (formerly East Prussia) is also an SEZ, and has seen massive growth in its manufacturing base as a result.
Medvedev announced that enough rubles have been sent to Crimea that it is now the circulating currency, and says that in the months to come tensions and salaries in Crimea will begin to be raised to the standards of the Russian Federation, many times higher than they are now.
In the near term, Crimea is expected to receive billions of dollars worth of annual subsidies from the Russian government. Though the costs are considerable, Russia had been providing billions in aid to Ukraine before, and those seem over with the ouster of the Yanukovych government.
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