So Putin Says Crimea is Independent. Now What?

Yesterday, Crimea voted for its future. The numbers were Soviet-like. As expected, voter turnout was high, well over the 50% that Crimea needed to make the referendum legal – or about as close to legal as they were going to get – and nearly 97% of voters voted in favour of secession. Of course, this was more or less the predicted result, and no one was surprised.

Today, Vladimir Putin has officially recognised the independence of Crimea in a presidential decree. It basically says that the Crimean people expressed their will in an all-Crimean referendum and so now it will immediately recognise Crimea as a sovereign and independent state, with Sevastopol (where Russia’s Black Sea Fleet is based) having some sort of unspecified special status (maybe it will become a closed city again).

And of course, the question once again is: now what? After a night of partying, Crimeans have been plunged into uncertainty on numerous levels. Credit card machines in cafes no longer work, and supposedly the ruble will become the new official currency in April. Crimeans, banks included, don’t seem to know what will happen to their money in hryvnias (Ukraine’s currency). Crimea receives all of its energy, gas, and water from mainland Ukraine – that arrangement is bound to fall apart if Crimea becomes a part of Russia. While Russia has been talking about building a bridge across the Kerch Strait, that wouldn’t be completed until at least 2015.

So, Putin’s options. (Some of these may seem familiar from my previous post on Crimea, because really, nothing’s changed. We all knew what would happen with the referendum.)

Option 1: Since Crimea has been recognised as independent by Russia, it could go the route of South Ossetia/Abkhazia and remain “independent” (and more or less leech off of Russia). This is highly unlikely because Crimea would have a great deal of trouble achieving widespread international recognition and would therefore be limited in the scope of its economic activitied and dependent on Russia. After the 2008 war with Georgia, Russia funnelled huge sums into trying to make South Ossetia and Abkhazia into functional states with little effect largely due to corruption. Can Russia afford to build bridges (literally) and new power/water infrastructure, while propping up Crimea’s pensioners and attempting to adapt Crimea’s institutions to fit into Russia’s standards? It’s unlikely.

Option 2: The annexation option. By recognising Crimea as independent, Putin paves the way for this to happen. Sort of. Obviously it is still a situation laden with complications, but to Russia, at least, they can now legally make Crimea a part of the federation. Option 2 carries many of the same problems as Option 1, but at least there is the opportunity for Crimea to participate in the global economy as a part of Russia. This would at least relieve some of Russia’s financial burden, although it will have to compensate Crimea for a decline in Crimea’s important tourism sector as a part of Russia, whose stringent visa requirements are likely to deter European tourists. It seems most likely that Option 2 will occur, especially given the weakness of the sanctions issued by the US and EU (more on that later).

Both Option 1 and Option 2 leave the possibility of war between Ukraine and Russia wide open. Most Ukrainians seem to be opposed to war, and Russia obviously has a much larger military (and the nuclear option, which Ukraine was persuaded to abandon in 1994). But those eastern Ukrainian oblasts must seem awfully appealling right now, and it would spare Russia the headache of figuring out how to ferry goods and services to an isolated Crimea…

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