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.
Why is it that foreign newspapers, in this case NRC-Handelsblad, report significant news well before our news providers? The significant news is that the Russian Gazprom may soon end the subsidies for its gas deliveries to Ukraine which, incidentally, had already been agreed upon by contract well before the coup in Kyiv. The consequences, a 30% increase of the gas price, can be economically devastating not only for Ukraine but also for Western Europe. If Ukraine cannot pay then Gazprom can legally close the valves of the pipeline which carries 30% of the gas for the EU. The economic consequences for Ukraine and Western Europe will be dire as NATO cannot deliver a cubic millimeter of gas soon if ever.
This is a case covered by the old saying of you do not bite the hand that feeds you. The foreign puppeteers of the current government of Ukraine believed that they had the upper hand and could cower Russia with NATO threats and threats of economic boycott. It now turns out that they were and still are wrong in this deadly game. Here it is: Gazprom can legally demand that the IMF "help" must pay not only for the already huge Ukrainian gas debt of about 1 billion dollar but also for future gas deliveries which Ukraine cannot pay for. How ironic! A portion of the one billion dollar which our Congress plans to send to Ukraine via IMF may actually go to Russia! Well done Mr. President, well done!
Russia isn't as rich as all that. Essentailly, the oligarchs pillage the country's wealth and pay very little in tax. The Russian state thus doesn't dispose of the kind of revenue a country of that size would normally have. That, indeed, is why the miitary is such an antiquated ramshackle. I've been to both Russia and Ukraine and what struck me was that the lifestyle of ordinary people is higher in Ukraine than in Russia! Kharkov, for example, is quite prosperous and the only reminder of the bad old days is the giant statue of Lenin with his outstreched hand now pointing at a French bank! Thus, all this story of "higher salaries" may just be trickery based on the exchange rates.
That's an absurd comment. Seriously? What are you smoking?
Ukraine is basically Somalia compared to Russia.
A few facts about Russia:
15% of the world's arable land
25% of the world's fresh water
25% of the world's forestry
20+% of the world's oil and gas
25% of the world's mineral wealth
Almost NO DEBT
$500,000,000,000 in foreign exchange wealth (less than $100B in FED toilet paper)
$100,000,000,000 in sovereign fund
$100,000,000,000 in discretionary fund
Russia could cut off Europe from gas and oil for the next 5 years and STILL balance the budget.
In ten years time their GDP will be $10T and the US will probably DROP to $10T – if it hasn't already, since we cannot trust ANY numbers emanating from the Empire of Bases.
I'll take Russia and China over the US any day.
Should that be pensions instead of "tensions" that the Russians wish to raise in Crimea? I don't see Kaliningrad on the map? Just askin' ?
Kaliningrad is between Poland (the traitors of the Slavic culture) and Lithuania.