[Sixstrings]

Sounds like retiree pensions will double but food cost is doubling too. Food prices already soaring 30%, and water shortages, and bank closures and disruption.

Crimea struggles to adapt to life as part of Russia

Russia's annexation of Crimea has resulted in startling disruption to everyday life, with banks running out of money, prices soaring, and even problems with water supplies.

As the president, Vladimir Putin, flew into the peninsula for the first time since Russia wrested control of Crimea in March for a Victory Day appearance, the huge task of assimilating a region almost the size of Belgium with 2 million people was becoming more and more apparent.

In the runup to the Victory Day celebrations, disgruntled crowds have been standing in line outside banks up and down Crimea. At one Sberbank Russia branch this week a sign on the door announced that all the bank's branches had been closed.

"What should we do?" one elderly woman asked.

"What should we do? Let's break down the door, take out the cash machine, open it up and see what's inside," a man named Oleg said with a slightly ominous chuckle.

"And split it up between everyone!" yelled a third man.

The sign on the door promised that the bank would continue work next week "in a new format" and that "all obligations to clients will be met in full", but it wasn't clear by whom.

"Guys, they fired us. We don't know anything either," said a bank employee who was peppered with questions by locals after he opened the door to let a woman out.

Bank closures have been one of many inconveniences and unsolved issues here following the Russian annexation. Prices for groceries have also risen, and water flowing from Ukraine to the arid peninsula has been drastically reduced.

But many residents are still prepared to give Russia the benefit of the doubt.

Nikolai Novinsky, a surgeon who fought in the second world war, said that besides his pension, many of his other benefits had been disrupted. His bank closed and he will have to travel to Kiev to get his savings, a trip he doesn't feel it is safe to make at the moment.

"The transition period is a little bit difficult. Everything is hung up," he said. "I think things will change for the better" as part of Russia, he added.

"We're satisfied," he said about the decision to join Russia. "But if they return our money we will be even more satisfied … We're happy we got away from Kiev, but this suffering isn't good. People depend on money all the same."

People stood for hours outside the downtown branch of Chernomorsky Bank for Development and Reconstruction waiting to pay taxes, utility fees and conduct basic transactions that were previously done online or at various banks and government offices.

An accountant who identified herself as Yevgeniya was number 75 on a list of 127 people at one cashier, waiting to make a payment for window repairs in her office. She admitted Crimea's situation was "uncomfortable" but said she had voted to join Russia because the "standard of living is higher there".

Pensioners around the city said they had received a 25% increase in their payments last month and had been promised that pensions would double. But at the same time, prices for food have shot up. The grocery store clerk Flyura Mustafova said products had risen in price by as much as 30%. "There's enough food, but it's expensive," she said.

Food prices are likely to go up further due to problems with local agriculture and with deliveries from Russia and Ukraine.

"Pensions will double, but food prices will double as well, so it won't make a difference," said Ildmy, a Crimean Tatar pensioner who declined to provide his last name. "Soviet times have come back, so of course people will say they are satisfied." Asked to elaborate, he answered with a saying: "My tongue is my enemy."
http://www.theguardian.com/world/2014/may/09/crimea-adapt-life-russia-putin

[Strummer]

Those are expected temporary disruptions, nothing a few billions of investments can't fix. You only need to look at today's Grozny (which recently came out in a poll as Russia's happiest city) to see Crimea's future. Putin will make sure to make a shining example of prosperity out of it, if only to tease the Ukrainians.

[AgentR11]

Its actually something quite interesting to watch for the doomer crowd around here. If the US broke up under the strain of climate change and peak oil or whatever, these are the kinds of disruptions to expect as one currency ceases to be relevant, and a new/alternate currency comes into play. All your leases, credit cards, savings accounts, checking accounts, piggy banks suddenly become of unknowable value and difficult if not impossible to exchange for material goods. Now, the folks in Crimea do have an advantage in that they, and their territory, are extremely valuable to the new landlords, and so funds will be spent to make it work; but imagine how bad the systems could fail absent that external interest?

Rest assured six... the value of the Crimea to Russia is vast; challenges are to be expected, but the scale of those challenges compared with the inherent value of the territory is quite modest.

[Plantagenet]

The real question is how long Obama and the EU keep their sanctions in place before ending the sanctions and letting things go back to normal.

Shortly after Putin invaded Georgia the new Obama administration came into office and quickly ended all sanctions and normalized relations between the US and Russia (the famous "reset").

Clearly Obama isn't interested in having sanctions on Russia. The current sanctions set up after Russia's invasion of Ukraine are very weak.

I'd give these current sanctions about a year before Obama and the EU quietly rescind the sanctions and "reset" things back to "normal" once again.

[Sixstrings]

Its actually something quite interesting to watch for the doomer crowd around here. If the US broke up under the strain of climate change and peak oil or whatever, these are the kinds of disruptions to expect as one currency ceases to be relevant, and a new/alternate currency comes into play. All your leases, credit cards, savings accounts, checking accounts, piggy banks suddenly become of unknowable value and difficult if not impossible to exchange for material goods.

I like this old show called "Connections." In the first episode, James Burke tours a family farm and dissects how all of society falls apart if you take one little piece out of the supply chain.

Or if the power grid goes down. Or any number of things. Including annexation -- think of all the disruption. Just normal things, like where do you go to get a new tag for your car. Government offices disrupted. In the case of Crimea, apparently Russia has fired at least some of the bank employees (all of them?). So that means Russian banks are just taking over?

How long will that really take to transition? I think Russia may not have fully thought through / is prepared for what a large task this is, Crimea has 2 million people, it's like just trying to assimilate Belgium.

Then again the Germans did it with East Germany, so it can be done.

Rest assured six... the value of the Crimea to Russia is vast; challenges are to be expected, but the scale of those challenges compared with the inherent value of the territory is quite modest.

Yes, but the people may turn on Russia, as the reitred surgeon quoted saying he's happy to be with Russia but he'd like to have his money too.

I guess we'll see. Strumm is right about Grozny. Chechnya was leveled, and rebuilt.

[Islander]

Those are expected temporary disruptions, nothing a few billions of investments can't fix. You only need to look at today's Grozny (which recently came out in a poll as Russia's happiest city) to see Crimea's future. Putin will make sure to make a shining example of prosperity out of it, if only to tease the Ukrainians.

In Chechnya, 107 percent of people voted for Putin in the last election so they must be so happy that some of them voted twice!

[dissident]

Those are expected temporary disruptions, nothing a few billions of investments can't fix. You only need to look at today's Grozny (which recently came out in a poll as Russia's happiest city) to see Crimea's future. Putin will make sure to make a shining example of prosperity out of it, if only to tease the Ukrainians.

In Chechnya, 107 percent of people voted for Putin in the last election so they must be so happy that some of them voted twice!

Give a source for your claim. All you experts love to pull "facts" out of your ass to confirm your prejudices. Perhaps Chechens, who are Suffi Islamics, prefer not live under the Salafi Wahabbism which was being imposed on them by Saudi sponsored militants and warlords from the 1990s onward. And those that bothered to vote would vote for the devil they know and not for the devil they don't. Anyway, the reality is that Chechnya is de facto independent. That is why the insurgency has faded away. Kadyrov's father, who was assassinated by the Wahabbis, was part of the separatist movement in the 1990s. The real separatists and not the Wahabbi imports are who run the show now with a generous stream of money from Moscow. A win-win arrangement and a sorry loss for the Russia haters in the west.

[Sixstrings]

Former depositors at PrivatBank attempt to enter the bank to receive compensation for savings lost as a result of the lender's closure by Russian banking authorities

Crimea economy rattled by Russia takeover
http://www.usatoday.com/story/money/business/2014/05/16/crimea-economy/8919025/

Things getting worse in Crimea.

Banks still not opened. According to the article, "it will be some time before private banking returns to Crimea."

Ukrainian businesses are pulling out, and Ukrainian banks have had their licenses revoked by the Russian Central Bank.

Hungarian bank pulled out.
Even a Russian bank has pulled out of Crimea.

Crimea's losing its tourism and all the businesses it had. You can't have any economy at all, without banking:

McDonald's closed its three Crimean restaurants "due to the suspension of necessary financial and banking services" a company statement said. And some Ukrainians elsewhere in Ukraine are pulling back from spending money there.

"We don't want to spend our money in Russia," said Olena Zaitseva, a Ukrainian marine biologist who regularly conducts field work in Crimea. This year, she said she would cancel her trip.

The economic impact of Zaitseva's absence is more significant than it might at first appear. Under Ukrainian rule, sunflower seed exports, tourism, shipbuilding and solar energy were the mainstays of the Crimean economy. But they've never been lucrative industries.

"Businesses have to be registered according to the Russian laws," Burakovsky said. "Definitely there will be some problems in order to work with the continental part of the Ukraine."

The situation is especially dire as the summer vacation season approaches.

Around 4 million Ukrainians and 2 million Russians regularly go on their summer vacations in the Crimea. There have been reports of Russian plans to create a free economic area as well as a gambling zone with casinos to attract more Russian tourists in order to replace Ukrainians who aren't expected to return.


People stand outside a closed McDonald's restaurant in Simferopol

In April, Standard & Poor's downgraded Russia's credit rating for the first time in more than five years to a notch above "junk" status. In late April, the International Monetary Fund said in a statement that capital outflow from Russia "increased significantly" in the first three months of 2014 to $51 billion. The Fund noted that investment in Russia would further dwindle because of the geopolitical situation.
http://www.usatoday.com/story/money/business/2014/05/16/crimea-economy/8919025/

According to the article, Putin plans casinos for Crimea in hopes Russian tourists will replace lost Ukrainian tourism.

[radon1]

Former depositors at PrivatBank attempt to enter the bank to receive compensation for savings lost as a result of the lender's closure by Russian banking authorities

Shameless lies, sick. Totally turning everything upside down.

Looks like the dirty freak thinks that he can get away with any misdeed because he can always safely hide in the "fortress america".

[Sixstrings]

Shameless lies, sick. Totally turning everything upside down.

Looks like the dirty freak thinks that he can get away with any misdeed because he can always safely hide in the "fortress america".

That's in the USA today article, below the picture, it's not my words.

What am I missing? It's all in this thread. Pensions are doubled, but food has gone up 30%, food will double too, banks were shut down and the employees fired, banks still not re-opened. There's some water shortages.

Some big businesses are leaving because there's no banking infrastructure.

Russia is investing some money building a $7 billion bridge and has plans for casinos. Crimea has 4 million tourists a year, 2 million of which were Ukrainian. They may lose that half of tourism now.

Ukrainian businesses are pulling out.

You just don't want to talk about Crimea? I get the message, I'll drop it.

[AgentR11]

You just don't want to talk about Crimea? I get the message, I'll drop it.

No need to drop it. I think its going about as well as anyone should expect. Should take a year or few to get all sorted out, probably about the time the bridge is completed. In the end, absolutely worth the price. A bargain deal by any measure.

I do think your ranting about problems mere weeks after a massive currency change, legal system change, supply line change are more than a bit over dramatic.

[Quinny]

McDonalds closing - every cloud......

[Sixstrings]

No need to drop it. I think its going about as well as anyone should expect. Should take a year or few to get all sorted out..

About the same as IMF austerity and transition to EU. We're saying the same things here, both sides.

Pro-Russia side kept talking about all the transition hardship for ukraine to go to EU, and European norms and standards.

I do not want to anger people or get my kneecaps busted, but I'm just pointing out there is some hardship in transition to annexation too. Crimea depends on tourism. Did anyone think about this, without Ukrainian tourists that's half the tourism gone.

I do think your ranting about problems mere weeks after a massive currency change, legal system change, supply line change are more than a bit over dramatic.

It's the headline in USA Today, "Crimea economy rattled by Russia takeover," they aren't my words.

(I'm guessing Crimea is annexed now and this is an extra sensitive topic now, I will TONE IT DOWN but I should not have to STAY SILENT and not update the thread.

I have said it before that as Russia expands and does some big things in the world, Russians are going to have to get used to criticism -- we Americans are used to it -- all those anti-Bush and anti-Iraq years, and still today, seriously, you've got to get a thick skin.)

[Sixstrings]

If I see something about the Crimean transition to annexation, I may post it, I'll just put the link without much comment so as not to inflame people:

Crimean Chemical Plants Threatened by Ukraine's Water War With Russia

http://www.themoscowtimes.com/business/article/crimean-chemical-plants-threatened-by-ukraines-water-war-with-russia/500147.html

Tatars have been banned from having their annual commemoration rally:

Kremlin-backed Crimean officials back rally ban aimed at Crimean Tatars

Crimea's de-facto authorities have banned all rallies until June 6, preventing the region's minority Muslim Tatars from commemorating 70 years since Stalin deported their population. The Kremlin-appointed Crimean Prime Minister Sergei Aksyonov said the decree was issued to prevent "provocations by extremists", in relation to the current insurgent activity in Ukraine's south-east.

Yet most see the ban as an attempt by the illegitimate authorities to clampdown on any critics of its regime, appointed after Russia annexed Crimea in March.

https://www.kyivpost.com/multimedia/video-2/ukraine-news-one-kremlin-backed-crimean-officials-back-rally-ban-aimed-at-crimean-tatars-348263.html

[Sixstrings]

McDonalds closing - every cloud......

It's just a business. Their given reason for closing the restaurants is that there is not reliable banking infrastructure right now in Crimea. They can't do business.

Maybe you don't like McDonalds, but you know what in Europe the McD's are actually nice. Best big mac I ever had was in Paris. The Prague McDonalds are nice. It was pretty cool, "wow look at this, a clean McDonalds with nice workers and food isn't slop."

I bet those Crimean ones are nice. It's a business employing people, people liked to eat / hang out there, same as over here with all the old folks drinking their discount senior coffee. But they can't stay in business without financial infrastructure.

[Sixstrings]

Six More Ukrainian Banks Expelled from Crimea

The Central Bank on Tuesday cemented the grip of Russian banks on Crimea by banning 6 more Ukrainian banks from operating on the peninsula, which Russia annexed from Ukraine in March, a statement on the regulator's website said.

Ukrainian banks have undergone a mass exodus from Crimea, first closing and then selling off hundreds of branches in the aftermath of Russia's land grab.

...

With the decision, the Central Bank also transferred the responsibility for returning depositors their money to the nonprofit Depositor Protection Fund, the Crimean equivalent to Russia's state-run Deposit Insurance Agency, which is returns to depositors up to 700,000 rubles ($21,000) of any funds lost in a bank closure.

...

Meanwhile, Russian banks have expanded rapidly on the new market. Bank Rossiya, the first organization to be sanctioned by the U.S. following the Russian annexation of Crimea, became the first major bank to enter the peninsula in mid-April.

Crimean Prime Minister Sergei Aksyonov said last week that that more than 200 branches of Russian banks have already opened in Crimea and that 60 more will appear in the coming month, RIA Novosti reported.
http://www.themoscowtimes.com/business/article/six-more-ukrainian-banks-expelled-from-crimea/500011.html

Ok, so Russia is in the process of opening Russian banks. Did all the Crimean workers at the old banks just get fired? What remains to be seen is if Crimeans can get all their money back that were in the old banks. The Russian equivalent of FDIC will insure up to $21,000 of deposits.

I admit I don't know all the details here, but at minimum it's safe to say there is banking disruption in Crimea and perhaps a banking crisis, private banking gone (other than Russian?), and will Crimeans wind up losing some of their deposits? Bureacratic snafus, etc., if nothing else it would take a long time to get one's money back. That's got to have an effect on an economy.

[Sixstrings]

Ukrainian Director Arrested by Russian Secret Service in Crimea, Accused of Terrorist Act

Kirsten Niehuus, head of Medienboar Berlin Brandenburg, says director Oleg Sentsov was arrested at his home in Simferopol, Crimea and accused of organizing a terrorist attack.

Niehuus, whose fund is among the European backers of Sentsov's new feature Rhino, says Sentsov's only "crime" is his opposition to the annexation of Crimea by Russia.

An ethnic Russian, Sentsov had been involved in supporting the Euro Maidan protests in Kiev during the winter.

Sentsov was arrested in the early hours of Sunday morning by officials from Russia's Federal Security Service, a successor body to the KGB. He sent a message to a local journalist in the early hours that day but has not been heard from since.

Members of the Ukrainian Filmmakers Union, which has protested his detention along with the Ukrainian Ministry of Culture, understand he has been accused of organizing a terrorist attack and had been flown to Moscow to face trial there. He is believed to have been taken to the city's notorious 19th century Lefortovo prison.

Niehuus said: "It is extremely scary; if there are rules, however stupid, you may make a choice about your actions. But when the rules change day to day that makes it impossible for any thinking person."
http://www.hollywoodreporter.com/news/ukrainian-director-arrested-by-russian-705183

[Sixstrings]

Some more on the Tatar situation:

Crimean Tatars gather at a cemetery outside Simferopol for the funeral of Reshat Ametov, who disappeared and was later found dead after protesting against the Russian takeover of Crimea

Vladimir Putin tells Crimea's Tatars their future lies with Russia

Vladimir Putin has told Crimea's Tatars that they must accept that their future lies with Russia, on the eve of the 70th anniversary of their mass deportation from their ancestral homeland.

Putin's comments came as the UN warned that the Tatars have been the subject of harassment and persecution since the Black Sea peninsula was annexed from Ukraine in March.

Speaking after meeting Tatar representatives, Putin said: "Today we must all realise that the interests of the Crimean Tatars today are tied to Russia."

He said: "We are ready to work with all people" but added: "None of us can allow the Crimean Tatar people to become a bargaining chip in disputes … especially in disputes between Russia and Ukraine."

...

Sergei Aksyonov said the ban was necessary to avoid "provocations by extremists" and "disruption to the resort season".

But thousands of Tatars are expected to gather for an event that experts say will determine the course of the burgeoning conflict between the Tatars and the pro-Russia regional government.

Tensions between the Tatars and Crimea's ethnic Russians have grown steadily since the independence referendum in March. Most Russian speakers supported the move to join Russia; the Tatars – a Muslim minority who make up about 12% of the population – largely boycotted the vote and wanted to remain in Ukraine.

...

On the day of the referendum, the body of Reshat Ametov, a Tatar who had protested against the seizure of the peninsula by Russian troops, was found with signs he had been tortured.

He had last seen alive in video footage showing unmarked men in camouflage leading him away from a protest in Simferopol's Lenin Square.

"It's like when we came in the 1990s, they looked at us askance. It's the same way now," said his wife, Zarina Ametova. "They look at us like an enemy."

Aksyonov has denied that local militias had anything to do with Ametov's murder, which remains unsolved. But many fear the murder was the start of a campaign of violence and political persecution against the Tatars.

The US assistant secretary of state for European and Eurasian affairs, Victoria Nuland, told Congress this month: "We are extremely concerned about the human rights situation for all Crimeans but notably for Tatars."
http://www.theguardian.com/world/2014/may/16/vladimir-putin-crimea-tatars-russian-ukraine

[AgentR11]

I do not want to anger people or get my kneecaps busted, but I'm just pointing out there is some hardship in transition to annexation too. Crimea depends on tourism. Did anyone think about this, without Ukrainian tourists that's half the tourism gone.

Of course they thought about it. They weighed the price carefully, and it was a slam dunk bargain deal to take the Crimea. Six, what you don't seem to get or understand, was that this action was NOT optional for Russia. It was a do or die choice. The moment Ukraine started talking about EU and/or NATO membership, Moscow had to annex, and annex fast.

I suspect that Moscow understands from prior experience that buying cooperation via comfort and investment is cheaper than sterilizing the region of all life; thus the bridge and the high speed push to open Russian banks, and I suspect more than a little push from above to keep local prices from reflecting their actual current cost of delivery. Its a temporary subsidy, the bridge will fix the retail distribution costs, and the additional investment coming to the naval port will likely offset the fluff tourist jobs that are lost over the next couple years.

I have said it before that as Russia expands and does some big things in the world, Russians are going to have to get used to criticism -- we Americans are used to it -- all those anti-Bush and anti-Iraq years, and still today, seriously, you've got to get a thick skin.)

They are taking the criticism just fine, and straight to the bank.

[Sixstrings]

Of course they thought about it. They weighed the price carefully, and it was a slam dunk bargain deal to take the Crimea.

It's interesting to note that in your analysis, you're always thinking about Russia. What it needs.

I think about the PEOPLE. I'm a humanist, I'm people-centric, and democratic to the core and believe these "systems" and "motherlands" exist FOR the *people*, not the other way around.

These "systems" and "motherlands" just divide people. They play on ethnic, or racial, or religious differences. It's the same old crap everywhere, it's how American Republicans get poor white Southerners to vote against their own interests and vote for "the man."

Putin's doing the same thing. This nationalist stuff *is the oldest trick in the book*, we all know it. Distract the people from the problems they ought to be asking their government about, that the "other" is the enemy, and everyone get behind the flag and celebrate the military and a war somewhere.

You're thinking grand strategy for Russia. I just think about the people. Ordinary, dull, boring things that actually matter -- like can you cut out half the tourism in a tourist economy?

It's just a very different approach to looking at things, I look at the PEOPLE first. I guess that's why at the end of the day, I'm still a Democrat.

Six, what you don't seem to get or understand, was that this action was NOT optional for Russia. It was a do or die choice. The moment Ukraine started talking about EU and/or NATO membership, Moscow had to annex, and annex fast.

Might does not make right.

WWII Japan had its "do or die" moment too and had to take out Pearl Harbor.

Saddam just "had to have" Kuwait.
Argentina just "had to have" the Falklands.

And China now just *has to have* those oil patches in the water, right? They just got to have it, they gotta have it so much they can't even revenue share with a Japan or Vietnam or Phillipines. They gotta have it all to themselves, so they're taking it.

It's all totalitarian nationalism, it's an old story, there's nothing new here except for the world order and international law breaking down so back we go into the past..

I suspect that Moscow understands from prior experience that buying cooperation via comfort and investment is cheaper than sterilizing the region of all life;

Don't see your point there, Hitler built stuff too in the places the Nazis rolled into.

In fairness to Russia, since I'm people-centric I actually give credence to the polls that show most Crimeans wanted this union with Russia. So okay. It's still against international law, Russia still can't make a habit of this they just can't, but okay a bare majority of Crimeans wanted it so what can you say about that.

Although ALL Crimeans were getting along fine, without violence, as part of Ukraine. Now they aren't. Tatars have been getting out. Now there's a ban on public assemblies so Tatars can't have their annual commemoration parade.

There has in fact been violence. One Tatar was abducted by uniformed "masked gunmen," and found later dead and had been tortured.

We're seeing crackdowns like in Russia, with the Ukrainian filmmaker arrested for "terrorism" and off to prison he goes, for life.

It's a bit of a mixed bag there, maybe Crimeans will regret it, maybe they'll realize they just lost half their tourism in a tourist economy. Maybe the ones with money will realize they're kind of screwed, if the Russian version of FDIC is only insuring $21,000 of deposits that were in the old banks, that the Russian Central Bank has now closed.

One of the articles I posted quoted a retired surgeon saying something like "I'm happy to be with Russia, but I'd like my money too."

We'll see where that goes, I'm just curious about it as a doomer and how these things work -- will all these Crimeans get their money back? Will the Russian Central Bank really make good on it all? Will that $21,000 depositor insurance from Russia really cover everyone, or will people be just left screwed with all their savings gone?

But anyhow, about 54% of Crimeans were okay with annexation, so fine that's a majority, I don't harp on it. East Ukraine is a different matter.