Social changes in Crimea occupied by Russia

Yevheniia Horiunova
Associate Professor
V.I. Vernadsky Taurida National University
Kyiv, Ukraine

The Russian occupation of the Autonomous Republic of Crimea (ARC) and Sevastopol has led to significant changes on the peninsula due to population replacement and aggravation of the social and economic situation.

Population replacement
During the occupation period, serious demographic transformations took place in Crimea: the number of residents was rapidly declining, while Russians were coming on the peninsula en masse.

In 2014-2021, 347.9 thousand people, which is 15% of the peninsula’s population before the occupation, died in Crimea. According to Russian sources, about 200 thousand people left Crimea during the same period. If we add those who left Crimea but did not cancel their Crimean registration (the occupational administration continues to count them as peninsula’s residents) to these migrants, from 250,000 to 300,000 people (10-12% of the peninsula’s population before the occupation) left the peninsula. Accordingly, due to natural causes and forced migration, the local population has decreased by 25-28% during the occupation period.

However, according to Russian sources, the total population of the Autonomous Republic of Crimea has hardly changed and is about 1.9 million people. At the same time, according to official figures, the number of residents in Sevastopol increased by 27% (up to 529.9 thousand). Experts estimated that the population has almost doubled – up to 700,000 people.

As the birth rate has fallen by an average of 24% after the annexation of Crimea, external migration became the main source of human resources. According to Russian sources, in 2014-2021, 353.2 thousand people (15% of the peninsula’s population before the occupation) moved to Crimea. The vast majority of migrants were from the Russian regions (60-70%). The Russian authority encouraged the relocation of Russians to Crimea by various means: reduced-rate real estate mortgages, cheap loans, material support, etc.

In addition to official migrants, there are a large number of the Russian military and representatives of other law enforcement agencies on the peninsula. The migration services do not take into account these categories. Accordingly, Ukrainian experts estimated that from 600 thousand to 1 million people moved to Crimea. Thus, the Russian government has already replaced from 25 to 40% of the population.

Socio-economic development
Before the annexation, Russia has promised Crimeans an increase in wages and pensions. In 2015, the average wage in Crimea increased by 68 euros (up to 330 euros) compared to previous Ukrainian wages. Over the next period, the average earnings of Crimeans increased to 452 euros, but they have declined to 423 euros since 2020. The modal wage (received by the vast majority of the working population) is about 300 euros. Almost 18% of Crimeans receive a wage of less than 172 euros.

The situation with pensions is similar: the average pension was slowly growing during the occupation period and reached 166 euros in 2021. However, this figure does not correspond to the real situation due to the significant number of retired military who have actively settled on the peninsula after the annexation and have a significantly higher pension. So, the real pension coverage for most Crimean pensioners is not more than 130 euros.

Along with the transition to Russian wages and pensions, Crimea applies Russian prices for goods and services that are significantly higher than the Ukrainian ones. Accordingly, prices increased by 43% (for products – by 53%) in 2014, and by another 28% (by 23% for products) in 2015. In the following years, inflation rates slowed to 5-7% per year, but in 2021, food inflation was 11% in the Autonomous Republic of Crimea and 14% in Sevastopol.

Russia has invested significant funds in Crimea (more than 17 billion euros during the occupation period), but most of this money was spent on large-scale infrastructure projects (“Crimean Bridge”, Taurida highway between Kerch and Sevastopol) and the military industry.

At the same time, other companies have faced economic difficulties due to the breakdown of established economic ties, lack of adequate credit policy (large Russian banks didn’t operate on the peninsula because of sanctions), and decline in exports by 25 times (from over a billion dollars to 40 million). As a consequence, more than 40% of companies are unprofitable in Crimea.

As a result of the occupation, serious challenges were faced by small and medium-sized businesses that have reduced their activities due to the Russian bureaucratic system of permits and reports, credit financing problems, and rent increases. Only 6% of Crimeans received income from business activities in 2019.

The official unemployment rate ranges between 5-6%, although in fact, there are much more people who can’t find jobs. This is primarily because high-paying positions are given to migrants from Russia (officials, law enforcement agency staff, bank employees, etc.). As a consequence, most young people leave Crimea for work opportunities. As a result, in Sevastopol, only 40% of the total population works, the rest are children and retirees.

Due to this socio-economic situation, the occupied peninsula is among the outsiders of Russian socio-economic rankings. For example, Crimea is one of the ten most disadvantaged regions in terms of the financial status of the population; it ranks 78th out of 85 regions in terms of consumer demand, and Crimeans need to save money from 10.5 (Autonomous Republic of Crimea) to 15.5 (Sevastopol) years to buy own homes. The Autonomous Republic of Crimea and Sevastopol also rank last in the mortgage availability ranking.

In 2020, the Audit Chamber of Russia acknowledged that the federal targeted development program for Crimea and Sevastopol, under which the bulk of investments was allocated, would not allow bringing the living standards of the population to the Russian average. In such a way, the social situation in Crimea will continue to deteriorate.

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