THE BLOG
06/30/2014 06:54 pm ET Updated Aug 30, 2014

Seizure of Crimea as a Political Move to Keep Russia's Status Quo

Many have asked if it was worth it for Russia to go so far as to annex Crimea. Ryan Rappa wrote an interesting article about the economic incentive behind the annexation. However, I tend to think that, given Crimea's economic underdevelopment and the perception of power in Russia, the seizure of Crimea was done primarily for the political purpose and not for the economic one.

I agree with the points that there is a geopolitical incentive behind Russia's annexation of Crimea and a potential to exploit oil and gas rich reserves. However, so far the plan of extraction was mostly on paper, and the Crimean crisis stopped companies such as Shell and Exxon from developing the area. Russia's own poor state of economy will make it difficult to conduct the drilling without the support of foreign partners. It will take a while for the benefits from oil and gas to come true, while at the same time the cost of maintaining the annexed territory of Crimea strains significantly the Russian budget. Crimea because of its neglected industrial development have had most of its revenue from tourism, but now given the unstable situation many tourists (who came primarily from Ukraine) will avoid going there. The infrastructure in Crimea is extremely old and needs much repair; in addition, all the subsidies and pensions that Ukraine provided for Crimean citizens will be now on the shoulders of Russia.

I think that a major reason why Russia invaded Crimea was not for the economic benefits; instead, it was a way for Vladimir Putin to raise his popularity in Russia. Russian economy particularly weakened after the 2008 crisis. Putin's primary goal is to maintain his power; he is much less concerned about raising the standard of living of the citizens through economic reforms. With reforms lacking, the way to retain authority in the economic decline is to distract Russians from the poor economic conditions and to fuel their nationalistic sentiments, particularly by exhibiting the country's military strength. The Olympic Games, the annexation of Crimea, and bright military parades on the 9th of May fulfill these tasks. They very well shift the attention of Russians from their economic hardship to entertainment, feeling of national pride, and the need to consolidate against the "external enemy." The "external enemy" in this case is Ukraine. The Russian media has seriously distorted the reported information to incline more Russians to feel belligerent towards Ukrainians and favor the invasion to Crimea. Many Russians were taught to believe that Ukraine is a "younger brother" to Russia, a chauvinistic claim that belittles the right of Ukrainians to sovereignty.

Such propaganda contributes to the rise of strong militaristic nationalism and fascism in Russia, and the invasion to Crimea is highly appealing to the sentiments of many Russians who expect Putin to be first of all a strong militaristic leader.

It is sad, unfortunately, that this vision of the leader is dominating among the people of Russia, while other leadership alternatives, which may include real reforms and more peaceful existence, are often brusquely silenced by the Russian media.

No wonder that since the invasion of Crimea Putin's popularity among Russians surged and is now the highest in 6 years. Vladimir Putin, thus, plays on nationalistic sentiments through scenarios like Crimea, and is able to retain huge influence without undertaking serious economic reforms.

It is true that Putin may not want to annex other parts of Ukraine, for example, those in the east (Donetsk and Lugansk regions), because the cost of maintaining those regions will be too high and it may arouse dissatisfaction from Russian citizens who will not want to pay taxes to maintain more of the impoverished annexed territories. However, Putin still has an incentive to destabilize the east of Ukraine and will continue to do so while he still can. It is in his interests that eastern regions of Ukraine become federalized or in some other way partially independent from the rest of Ukraine, but so that they are still technically a part of Ukraine. In this way the Russian government will be able to implicitly put their own people to govern those regions, so that Russia gets all the profits while Ukraine pays the subsidies. There is, in fact, much more industry operating in the east (in many cases with outdated technology, but still lucrative) compared to tourist-oriented Crimea.

Thus, the decision to invade Crimea was a statement of power addressed, first of all, to the Russian people. Vladimir Putin wanted primarily to prove his strong leadership qualities to the Russian people, a prevailing majority of whom envision him to be a mighty militaristic leader, and to consolidate the country by harping on people's nationalistic feelings. Russia will also probably continue to destabilize Eastern Ukraine, if such action promises to bring profits to the Russian ruling class. To keep the authority of the ruling class firm in a country where many live in poverty, the feeling of national pride has to be kept high, and the Russian government fuels it by leading immoral militaristic campaigns such as the seizure of Crimea.