It seems that Russians want to have their cake, eat it too and get someone else to pay for it.
Recent polling data concerning the Russia-Ukraine crisis shows that an overwhelming majority of Russians support the Kremlin’s move to annex Crimea. But relatively few are willing to assume the costs that come with land-grabbing.
The results highlight the effectiveness of the Kremlin’s propaganda machine, while also raising an alarm about the threat the Putin administration may face when Russians start to feel pinched by the enormous costs associated with annexation.
The Levada Center, one of Russia’s leading national pollsters, released on April 9 a digest of several surveys on the Russian-Ukrainian crisis and related issues conducted by the organization over the past several months. According to one of them, 57 percent of Russians said they “absolutely personally support” Crimea’s joining Russia. Another 31 percent said they “mostly personally support” it. Only 7 percent said they personally absolutely or mostly disapprove of annexation.
In addition, full two-thirds of Russians, or 67 percent, declared that they would absolutely or mostly support accession of another Ukrainian region to Russia, while only 19 percent said they would be absolutely or mostly against it.
However, when Russians were asked if they were “personally willing to pay … the very significant costs of Crimea’s accession, the burden of which can fall on regular citizens,” the results were dramatically different. Only 7 percent of respondents said they were absolutely willing to bear such costs, and another 19 percent said they were mostly willing. The majority said they were unwilling, undecided, or willing to pay only a portion of the costs. Another 17 percent, or one in six respondents, naively believed that ordinary citizens would not be affected by Crimea-related expenditure and losses.
No one can say with any degree of certainty how much the final bill for Crimea’s annexation will be. Preliminary estimates suggest the direct costs of shoring up the peninsula’s economy will reach about $50 billion over the next few years, approaching the eventual price tag of the 2014 Sochi Winter Olympic Games. Yet given Russia’s rampant corruption and government mismanagement, costs could easily triple or quadruple, as they did with the Sochi Games, which had an original budget of $12 billion.
Indirect costs, including those caused by international sanctions, accelerating capital flight and a slumping stock market – also stand to inflict considerable economic pain on Russians.
A few of Putin’s moneymen are already starting to ring alarm bells. Experts at Russia's Ministry of Finance reportedly have stated that in order to finance Crimea’s development program for 2015-2020, the Kremlin will have to defund a number of important social obligations and key infrastructural projects elsewhere in Russia. They also predicted increased budget deficits and a need to tap into the country’s hard-currency reserve fund.
Andrei Klepach, Deputy Minister of Economic Development, has reported the economic impact of annexation so far has been significantly more severe than expected. “We expected slowed outflow of capital, but instead we see massive capital flight; we expected 1.5-percent-to-2-percent economic growth, but instead we get close-to-zero growth, or even a recession,” Klepach said.
“Economic policies must change,” he continued, “otherwise, the economy and people’s prosperity will receive a heavy blow and the government will be on a path of macroeconomic suicide and masochism.”
If the Levada survey data is accurate, and Russians start balking when the financial burden of Crimea’s annexation starts to bite, Moscow could see a revival of the protest mood that gripped the city from 2011-13. Crimea could well turn out to be a Pyrrhic victory for Putin.