Crimea: strategic importance and post-annexation transformations (2014-2017)

The annexation of Crimea by the Russian Federation triggered a change in the regional balance of power, affecting the entire Extended Black Sea Area.

Post annexation transformations

 Strategically, through the militarization of the Crimean Peninsula, initiated in March 2014, Russia can generate major security risks by deploying Anti-Access / Area Denial Capabilities (A2/AD). These “umbrellas” allow Moscow to set up airspace denial zones with a significant impact on the movement of naval and land forces. In the communication of the Warsaw Summit from 9 July 2016, NATO expressed its concerns, mentioning that it will not accept any restrictions on its allied forces.

The S-400 missile systems positioned in Crimea is capable of intercepting aerodynamic targets over a 400-km radius and ballistic targets moving with  4.8 km /s at a distance of 60 km, at heights ranging from a few meters up to several tens of kilometres, therefore it represents a real threat to Romania’s national security. If we take the City of Sevastopol as a point of origin, the A2/AD ban umbrella covers the entire Economic Zone of Romania in the Black Sea, the cities of Constanta (392 km / 211.82 nm), Tulcea (378 km / 204.29 nm) and Eforie Nord (394 km / 212.95 nm).

Another NATO Member State significantly affected by anti-access and area denial systems is Turkey. At the moment, most of the Turkish airspace is incapacitated by three Russian A2 / AD umbrellas, strategically placed in Crimea, Armenia and Syria (Latakia). This state of affairs produces negative effects, both at the military and economic levels.

At a military level, the projection capacity of the Turkish military power is considerably weakened in Syria, Eastern Mediterranean and the Extended Black Sea Region. Also, in the event of an armed conflict in the region that might be contrary to Russian interests, Turkey does not have the technical, military and logistic capabilities to overcome the challenges posed by the regional anti-access systems and the superior military potential of the Russian Federation.

Economically, Russia could affect Turkey’s status of energy hub, if the latter decides to take part in projects aimed at creating new alternative routes to Russian oil and gas supply for the European markets.

As a result, scenarios such as obstruction of maritime traffic and freedom of navigation become possible for the entire Black Sea region; the imposition of air defence and identification areas (based on the Chinese model in the East China Sea); the assertive claims of certain energy perimeters placed in the exclusive economic zones of the countries bordering the Black Sea, could become realistic (Armand GOȘU, Euro-Falia, Curtea Veche publishing 2016, Bucharest pp.146-15).

In terms of military-administrative organization, Crimea is a part of the southern military district, where most of the Russian Federation’s Black Sea Fleet is positioned.

In 2016, the southern military district recorded the highest rate of modernization in terms of military arsenal, compared to the other four military districts of the Russian Federation. Thus, the aerospace forces in the southern district are endowed with 80% more modern military aircraft than in other districts (Northern Fleet, Western, Central and Eastern), with more than 350 units being deployed: tanks (T-72 B3), armoured and motorized infantry (BMP-3 and BTR-82 A); rocket systems and artillery systems; special technology in the field of communications and radio-electronic warfare.

After annexation, Crimea is undergoing a massive militarization process

In 2015, the Black Sea Fleet was endowed with over 200 units of new military equipment, 40 ships and over 30 aircraft, including SU-30 SM aircraft fighters. Coastal defence structures were supplemented with 140 motorized armoured and infantry units and reinforced with the modern Bastion rocket complexes. In 2016, the Black Sea Fleet’s endowment and upgrading rate is the highest if compared to other Russian military fleets. It was supplemented by 24 ships and two submarines. In the Crimean Peninsula, there were deployed 100 Kalibr cruise missiles and anti-ship rockets from the Oniks system.

Also, air security has been strengthened through the deployment of S-400 Triumph and Pantsir S-1 (NATO Coding: SA-22 Greyhound).

Following the annexation of the Crimean Peninsula, Russia is capable of successfully projecting its strategic interests in the Eastern Mediterranean and the Middle East. This fact was proven in late 2015 when the Rostov-na-Donu submarine belonging to the Black Sea Fleet launched Kalibr rockets from the Mediterranean Sea over ISIS targets in Syria.

Financial expenditures have seen an upward trend over the past three years

From an economic point of view, Crimea is a poor recipient region, funded in proportion of ¾ from Russia’s federal budget.

Before the annexation (2013), the consolidated budget of the peninsula was estimated at $ 600 million, of which $ 340 million in the form of subsidies from Ukraine’s state budget. After the annexation, spending grew progressively and reached more than $ 2 billion in 2017.

Therefore, in 2015, the Crimean budget was estimated at approximately 66.5 billion RUB (approx. 1.1 billion US dollars). In 2016, there were recorded three increases, reaching approximately 67.4 billion RUB (approx. 1.1 US dollars) and in 2017 it reached approximately 159.3 billion RUB (approx. 2.7 billion US dollars), even though the initial forecast of the authorities from Simferopol was 131.7 billion RUB.

  Crimea: a burden on the federal budget

According to the provisions of the Budget Code of the Russian Federation, Simferopol needs subsidies in order to equalize its budget and to support social services above the minimum level per capita. Therefore, funding the region represents an additional burden for Russia in the context of the economic recession resulted from the fall in the price of hydrocarbons, the rigid fiscal policy of revenue centralization and the sanctions regime imposed by the international community in response to the annexation.

As an example, the Kremlin’s inter-budgetary policy can be considered as an instrument of influence and internal control over the administrative-territorial units and a brake in the economic development of the Russian Federation. The pressure is put on the donor regions (rich in hydrocarbons), which are deprived of funding for development. From 2006 to 2015, their number has fallen significantly from 25 to 14, to a lower minimum than in 2001, when the donor regions were 19.

Most of their revenues are rigidly centralized in the federal budget and redistributed under the transfer scheme in order to support the recipient regions, taking priority those of strategic importance. Alongside Chechnya, Crimea receives the most subsidies from the federal budget; therefore it can be argued that Kremlin’s strategic-military priorities precede the economic and social ones.

For the coming years we anticipate a continuation of the current militarization trend, generating more insecurity, political and economic uncertainty in the Extended Black Sea Region.



GOȘU Armand, Euro-Falia: turbulențe și involuții în spațiul post-sovietic, Curtea Veche publishing 2016, București pp.146-15

Published by Chamber of Commerce and Industry Romania-Turkmenistan

The Chamber of Commerce and Industry Romania-Turkmenistan (CCIRom-Tkm) is a non-governmental organization of public utility, autonomous and apolitical, founded in 2009 to promote the economic cooperation between Romania, Turkmenistan and other countries in the Central Asian region.

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