News / Europe

    Russian Euphoria Over Annexation of Crimea Fading

    FILE - People examine T-shirts depicting Russian President Vladimir Putin and reading Greetings from Crimea at the biggest department store GUM in Moscow's Red Square.
    FILE - People examine T-shirts depicting Russian President Vladimir Putin and reading Greetings from Crimea at the biggest department store GUM in Moscow's Red Square.
    Reuters

    When she was asked to give up a day's pay to help Crimea, Russian hospital therapist Tatyana could not hide her anger - why should she subsidize others when struggling to make ends meet herself?

    Living in southern Russia close to the border with Ukraine, Tatyana was caught up in the euphoria that gripped the nation when Russia annexed Crimea in March and still welcomes “our” people back in the fold.

    But more than three months on, she is worried that her wage of 9,000 roubles ($260) a month is not stretching as far as it used to, and fears she will be forced to take on extra work to cover the rising cost of food and utilities.

    Patriotism spurred by President Vladimir Putin's annexation of Ukraine's Crimea still runs deep in Russia, but the cold reality of paying for the Black Sea region is setting in and threatens to test an economy brought low by Western sanctions.

    In Tatyana's hometown of Taganrog, the request for hospital workers to sacrifice a day's pay was taken up by only a few - by those people, she says, who wanted to impress their employers.

    “The bosses informed us of this in June in a tone which made clear they recommended it. ... They distributed and asked us to fill out a form for the donation. People started complaining - why should they donate to Crimea?” said Tatyana, 52, who declined to give her surname for fear of retribution.

    “In our department, not one of us made the donation and our boss understood because she was of the same opinion,” she said by telephone.

    Keen to help

    Initially people across Russia were keen to help Crimea, convinced by Russian media that the Russian-speaking region was under threat from fascists in the Ukrainian capital Kyiv who, they were told, were behind the overthrow of a president sympathetic to Moscow in February.

    Similar collections were set up in state enterprises and people were pressed to give “humanitarian aid.”

    Russians were also encouraged to visit Crimea - once the playground of the Soviet elite - and some state-controlled companies said they would ship their workers to the region's spas for group summer holidays.

    Russia even started a new low-cost airline to Crimea, Dobrolyot (Good Flight), which made its maiden flight to the region's capital, Simferopol, last month.

    But with the first wave of tourists back in Russia and complaining about bad service and amenities, the "champagne effect" of feeling that Russia had outwitted the West over Crimea may have started to wear off.

    Rising prices and stagnating wages may make hundreds more Russians think twice about the government's price tag of between 800 billion and 1 trillion roubles ($23-30 billion) for Crimea, and may come to pose the first real threat to Putin.

    Wages fall

    The Russian leader for now looks unassailable, with popularity ratings running at over 80 percent and his critics reluctant to speak out against him for fear of being labeled a traitor against the popular cause of building a Greater Russia.

    Russian markets have bounced back, recovering all their losses since the start of the year to trade slightly higher, and some bankers are encouraging their clients to dive back into a market they say is undervalued.

    But Russia's economy, riddled with corruption and nepotism, is still weak and, increasingly isolated by Western sanctions, is for now teetering on the edge of recession.

    Fighting in eastern Ukraine, an influx of Ukrainian refugees and the threat of further sanctions all hang over an economy, which the International Monetary Fund sees growing by just 0.2 percent this year. Russia's central bank hopes for 0.4 percent and the Economy Ministry 0.5 percent growth.

    After weeks of saying visa bans and asset freezes imposed by the European Union and United States against a number of firms and officials close to Putin could not harm the economy, Russian leaders are increasingly testy over the damage wrought if not by the current sanctions, then by the threat of more.

    “In fact, we are dealing with a new offensive type of weapon,” Russian Deputy Foreign Minister Sergei Ryabkov said of the U.S. sanctions in an interview with the Kommersant daily.

    Investment has all but dried up, forcing the government to dip into reserves meant for pensions to finance projects, and the government says it will sell a stake in Russia's state-controlled oil company, Rosneft, to cover some of the costs of developing Crimea.

    Finance Minister Anton Siluanov had to backtrack after coming under fire for saying that all the funds accumulated in Russia's personal pension plans in 2014 had been spent on “anti-crisis measures” and on Crimea.

    The next day, he said Russians “would lose nothing”, but stopped short of saying whether the sum of $8 billion would be returned to the personal pension plans.

    While such measures may take a while to hurt the population, Karen Vartapetov, an analyst at Standard & Poor's rating agency, said a more immediate danger was the stagnation of real disposable incomes, which show only 0.2 percent real growth (adjusted for inflation) this year.

    “Zero growth of real disposable incomes against continuing growth of public sector pay indicates that salaries in the private sector and non-salary incomes are shrinking,” he said.

    “The economy outside the public sector has been stagnating.”

    Sales tax proposal

    On top of this, the Finance Ministry's efforts to try to meet Putin's demands to increase public sector pay, including proposing a new regional sales tax, mean that prices could rise further, putting pressure on stretched salaries.

    In the major cities such as the capital Moscow and Russia's second city of St Petersburg - where Putin faced street protests in the winter of 2011-12 that at times drew tens of thousands - core inflation running at an annual rate of more than seven percent has had little impact on a population largely wealthy enough to cover higher prices.

    But in Taganrog, Tatyana has little to fall back on out of her 9,000 rouble per month salary.

    “Prices are continually rising, for utilities, and for food,” she said.

    “I also rely on private consultations ... I give consultations outside work hours at people's homes. Plus some patients also give tips, or bring presents to consultations at the hospital, but there are fewer and fewer of them.”

    You May Like

    Post-White House, Obamas to Rent Washington Mansion

    Nine-bedroom home is 3 kilometers from Oval Office, near capital's Embassy Row; rent estimated at around $22,000 a month

    Red Planet? Not so much!

    New research suggest that Mars is in a warm period between cyclical ice ages, and that during Ice Age Maximum over 500,000 years ago, the red planet was decidedly ice, and much whiter to the naked eye.

    Taj Mahal Battles New Threat from Insects

    Swarms of insects are proliferating in the heavily contaminated waters of the Yamuna River, which flows behind the 17th century monument

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Thomas Cook from: Germany
    July 07, 2014 4:55 AM
    I more or less like this article and it does fall into recent economic trends in Russia. There are and will be consequences for the Crimea and Eastern Ukraine actions and Moscow will be made to pay.

    Now, I said 'economic trends'; actually economic actions is probably a better wording. Last week the U.S. became the World's largest exporter of "energy" products when they redefined a 1970's stance, limiting the export of partially refined oil.

    Now Gennady and others, Moscow is selling Natural gas to Germany and maybe China (????) for $10.00 per 1,000 cu meters or some such number. The commercial price in the U.S. for the same volume is $5,90, So, the volume measures does not matter the price does.

    Now, take an LNG or LPG carrier and ship the gas to Europe, with a probable cost of $1.00 to $2.00 per the same 1,000 cu meters. That is 20% less than what Moscow can sell it for, but everyone on the U.S. side has a nice profit. A lot of people are employed, where is the money from Moscow side going?

    In Response

    by: danny warson from: costa rica
    July 07, 2014 10:24 AM
    heee..hee...and now Russia is preparing to hand over Crimea to .
    who?...heee..hee..lame!!!
    In Response

    by: Irina from: Moscow, Russia
    July 07, 2014 7:42 AM
    A lot of people are employed ? At what cost ? After the intervention to Iraq ? How are the Iraqis doing ?? OK after all those suicide bombings and the entry of Yankees who they wanted to welcome in their homeland least of all ??

    by: smilingdon from: jacksonville,fl
    July 07, 2014 12:04 AM
    I have sympathy for people who suffer which includes the Russians.

    by: Gennady from: Russia, Volga Region
    July 06, 2014 12:47 PM
    The tone of the article and its title try to prove prejudiced negative opinion of the author that Russian Euphoria over Annexation of Crimea is fading. However, it is unconvincing. All the reasoning in the article is built on the unbelievably low salary of a therapist Tatyana from Taganrog – 9000 roubles/260$ amonth. However, the author doesn’t know that her salary isn’t indicative. Even one year ago, the Minister of Health pointed out that the medium monthly salary for doctors was 32000 roubles/924$, according http://ria.ru/society/20130422/933918631.html. Since then it grew up by about 10%. Further on the author just contemplates that the “rising prices and stagnating wages may make hundreds more Russians think twice about the government's price tag of between 800 billion and 1 trillion roubles ($23-30 billion) for Crimea, and may come to pose the first real threat to Putin.” Weak journalism, very weak.
    In Response

    by: David from: Sunny California, USA
    July 06, 2014 11:50 PM
    No need to save face due to your shame. I don't know how your economy operates, but is even $924 a month doable? For a doctor? I MUST be missing something since the average monthly salary for a family practice physician in the US is $15,000 a month. However, I am still thankful I'm not in your shoes! Regards.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora