Economy of Kremlin-controlled Crimea: Steady decline

Author : Olena Serheyeva

Source : 112 Ukraine

Crimean authorities regularly report about economic growth and carefully manipulate figures for at least partial confirmation of their words
23:14, 9 January 2017

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It is not a secret that self-proclaimed Crimean authorities regularly report about the economic achievements and carefully manipulate figures for at least partial confirmation of their words. However, this does not help: even a cursory glance at the local statistics is enough to see how the economy of the annexed peninsula is rapidly deteriorating.

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According Krymstat, index of industrial production in Crimea for 11 months of 2016 amounted to 107% compared to the same period last year. However, the lion's share of this growth provides the production and distribution of gas, electricity, and water (170% the previous year), as well as the mining sphere: the number of quarries in the peninsula is growing rapidly. It increased the production of crushed stone by 40%, granite and stone – by 72, 6%, and the limestone - by 83% (compared to 2015). In other words, a small economic growth is achieved exclusively by the predatory exploitation of natural resources of the peninsula.

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Construction sphere also demonstrates slight recovery in comparison with 2015: production of plastic windows increased by 35%, of concrete – by 42%, and mortar – by 226%. However, these impressive figures hide quite a sad situation in other industries. For example, the production of electrical equipment fell by 24.4%, mineral products - by 33%.

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The decline of Crimean economy is best seen by the volume of industrial products. Thus, in 2013, Crimea sold industrial products and services in the amount of $ 3.3 billion, and in the first 11 months of 2016 - only for $ 160 million (20.6 times less).

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Agriculture and food industry

Speaking about the agricultural sector, occupiers boast with yields of grain and sunflower. Thus, according to Krymstat, in 2016 there were collected 1.32 million tons of grain (1.7% more than in 2015) and 158.2 thousand tons of sunflower seeds (almost 40% more than in 2015). In both cases, figures for 2013 exceeded: leguminous by almost two times, and for sunflower – by 30%. However, it should be noted that 2013 was one of the most unfortunate year for Crimean agriculture. In the remaining years, 1.2-1.5 million tons of legumes were collected in Crimea (and even 1.9 million tons in 2011).

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The livestock sphere does not leave the Russians cause for joy. Thus, the production of cattle continued to decline: from 158.2 in 2013 to 114.7 thousand heads in 2016 (28%), cows - from 69.8 to 62 thousand heads (12%), pigs - from 164.1 to 152.1 thousand heads (by 8%), sheep and goats - from 282 to 227.6 thousand heads (20%).

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Together with the reduction in the number of cattle, production of meat and dairy products is reduced. In particular, in 2016 the production of beef was only 16% compared to 2015, and poultry - 86.4%. Only pork production has increased (by 10.7%), which is easily explained by the mass slaughter of animals on the background of the spring quarantine because of African swine fever.

Reduction of number of cows and the termination of the supply of raw milk to the mainland Ukraine led to a decrease in production of dairy products by an average of 30%. So, in the first 11 months of 2016 milk production fell by 28%, butter - by 33%, sour cream - by 36%, and yogurt - 40% (compared to 2015).

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Sphere of alcoholic and non-alcoholic beverages showed increase: wine production enlarged by 8%, mineral water - at 40%, and cognac - by 53.2%. Flour and bakery production grew by 11%.

Foreign trade and investment

The most large-scale level of the fall was recorded in the foreign trade of the peninsula. Thus, in January-November 2016, the foreign trade turnover of Crimea was only 65.8 million dollars - 3 times less than in 2015 (USD 216.7 million). When compared to the years before the Russian annexation, Crimean exports declined by about 28 times, while imports - by 35 times.

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The situation with the investment is also gloomy. Crimean self-proclaimed leader Sergei Aksenov constantly reports on the growth of the investments, however, for 9 months of 2016, only some 18.8 billion rubles (about $ 312 million US) have been invested (in fixed assets) in the Crimean economy. At the same time in 2013, foreign direct investments amounted to US $ 1.6 billion.

Construction and transportation

Despite the rapid growth of the mining industry on the peninsula and the reports of the local "authorities" on the high pace of construction, currently, Crimea is very far from the level of 2013. In particular, in 2016, 224.1 square meters thousand of housing were built, while in 2013 - 963 thousand square meters (4 times more).

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In terms of transportation, Crimea cannot reach the level of the Ukrainian times. Even taking into account that road transport has now become almost the main kind of vehicles on the peninsula, for 11 months of 2016 its turnover reached 99.3 million ton-kilometers, while in 2013 - more than 1.1 billion ton-kilometers (11 times decline).

A similar pattern is with passengers transport: in 2013, 121 million people were transported by the passenger busses, and in 2016 – 92 million people by all kinds of vehicles.

One eastern wisdom says: "No matter how many times you say "halva," your mouth would not become sweeter." This principle works with the Crimean economy - no matter how much you “twist” the numbers, looking for showing some positive moments, the reality would demonstrate the full depth of the degradation of Crimean economy under the Kremlin-controlled power.

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