The Washington Post

The downsides of Crimea for Russia

Participants in a rally in support of Crimea joining Russia, hold Russian flags in Red Square in Moscow, Tuesday, March 18, 2014. (AP Photo/Pavel Golovkin)

The following is a guest post from Columbia University political scientist Timothy Frye, the Director of the Harriman Institute for Russian Eurasian and East European Studies at Columbia University.


With apologies to Winston Churchill, the referendum in Crimea on Sunday was a joke wrapped in a farce inside a tragedy. Voting amidst gun-toting soldiers with a rigged ballot and precious little time for public discussion are hardly best practices. Nonetheless, following Russian President Vladimir Putin’s remarkable and emotional speech in the State Duma, there is little doubt that Crimea will soon be part of Russia. Amidst the triumphalism in Moscow and the recriminations in Washington, however, it bears to keep in mind the downside of recent events in Crimea for Russia, and potentially for Putin.

Russia’s problem is not that it lacks territory but that it governs badly the territory it has. As Sergei Guriev and Ekaterina Zhuravskaya note, Russia is far too wealthy to be so poorly governed.  Using data from the World Bank, they find that the control of corruption in Russia is weak even taking into account Russia’s GDP per capita.

Moreover, recent events in Crimea will likely only strengthen those in the security services, state-owned sectors, and the bureaucracy who are benefitting from the status quo of high levels of corruption, an inefficient economy, and a political system that concentrates power in few hands.  The current chaos on its southern border will benefit the Kremlin in the short run as Putin’s approval rating shoots up, but it will also likely mean postponing the structural economic reforms and improvements in governance that Putin put forward upon returning to the presidency in May 2012. At the time, Putin promised to increase investment by at least 25 percent of GDP by 2015; to raise Russia’s rating in the Doing Business in the World Survey to 20th by 2018 and to privatize the non-defense and non-oil sectors by 2016.  He also cited 6 percent as a reasonable target for economic growth in Russia.

Yet, investment has stalled and Russia’s growth rates have fallen each quarter since 2012; declining from 4.3 percent in the first quarter of 2012 to 1.2 percent in the last quarter of 2013.  Even prior to the crisis, predictions for economic growth in 2014 hovered between 1 and 2 percent. What is more striking is that this decline is occurring even as oil prices remained high (thereby breaking the historical correlation between economic growth and oil prices) and during a year in which oil output in Russia hit a historic peak.  And capital continues to fly out of the country.  Capital flight during a period of relative political stability in 2013 reached 60b dollars, which is more than 3 percent of Russian GDP.  Recent events in Crimea will not help these economic trends.

A weak economy augurs badly for Russia, but also potentially for Putin as well. High rates of economic growth swelled government coffers and allowed the Kremlin to reward influential economic and political elites with government largesse. The $51 billion extravaganza that was the Sochi Olympics is just one example. Should the economy falter and state coffers continue to suffer, it will be harder to broker deals among powerful economic and political elites. Second, writing here at The Monkey Cage, Dan Treisman shows that throughout the Yeltsin, Putin I, and Medvedev presidencies there was a tight correlation between Presidential approval ratings and economic growth rates. The strength of this correlation fell in the last two years, but historically the trend is strong and could easily return.

There are also some downsides on the foreign policy side as well. One can certainly argue that the Kremlin would have preferred a friendly government in Ukraine under President Viktor Yanukovych to control over Crimea and a hostile government in Kiev. While Russia will be able to expand its military presence in Crimea after annexation, these facilities were never under serious threat in the first place. Moreover, the annexation of Crimea will remove one of the most loyal pro-Russian voting blocs from Ukrainian politics – a move that is likely to further tilt the political balance in Ukraine away from Moscow.

Russia also has an interest in nuclear non-proliferation, but recent events in Crimea have weakened this norm. Remember that Ukraine gave up its nuclear weapons in 1994 in exchange for assurances from Russia, the US, and the UK that it would protect the territorial integrity and security of Ukraine. Regional powers with nuclear weapons will look long and hard at the Ukraine experience when considering the value of their nuclear stockpile.

For better and for worse Russia used the United Nations during recent crises as a forum to advance interests in blocking what it perceived as attacks on national sovereignty by foreign powers. As Putin noted in his New York Times editorial: “No one wants the United Nations to suffer the fate of the League of Nations, which collapsed because it lacked real leverage. This is possible if influential countries bypass the United Nations and take military action without Security Council authorization.” Yet, the institution looks even more feckless than usual as military units in Crimea blocked U.N. Secretary General Ban Ki Moon’s personal representative from gathering information on alleged human rights abuses.

One big question is whether the anticipation of a slowing economy and lower personal popularity in the future will make Russia more likely to repeat a Crimean scenario in Eastern Ukraine, Transdniestr, Kazakhstan or the Baltics as a way to divert attention from deeper problems or whether these negative trends would moderate Russian foreign policy.  Empirical support for the diversionary theory of war is mixed at best, but this is a question that bears watching.  It also bears remembering that while attention is focused on President Putin’s skyrocketing approval ratings and his triumphant speech in Moscow, events in Crimea will likely divert Russia from addressing its most important problems. The annexation of Crimea – perhaps only the second such redistribution of territory between countries in post-war Europe – will prove a great boon to the Kremlin, but there are real downsides here for Moscow as well.


Past Monkey Cage posts on developments in Ukraine, Russia, and Crimea can be found by clicking here.  Recent posts include:

Kimberly Marten: Vladimir Putin: Ethnic Russian Nationalist

Gwendolyn Sasse: Building a federal Ukraine?

Joshua Tucker: What is motivating Putin?

Galymzhan Kirbassov: Why the leaders of Kazakhstan are not (yet) losing sleep over Crimea

Erik Voeten: What is so great about ‘territorial integrity’ anyway?

The Freddie Gray case

Please provide a valid email address.

You’re all set!

Campaign 2016 Email Updates

Please provide a valid email address.

You’re all set!

Get Zika news by email

Please provide a valid email address.

You’re all set!
Show Comments
The Democrats debated Thursday night. Get caught up on the race.
The Post's Chris Cillizza on the Democratic debate...
On Clinton: She poked a series of holes in Sanders's health-care proposal and broadly cast him as someone who talks a big game but simply can't hope to achieve his goals.

On Sanders: If the challenge was to show that he could be a candidate for people other than those who already love him, he didn't make much progress toward that goal. But he did come across as more well-versed on foreign policy than in debates past.
The PBS debate in 3 minutes
We are in vigorous agreement here.
Hillary Clinton, during the PBS Democratic debate, a night in which she and Sanders shared many of the same positions on issues
South Carolina polling averages
Donald Trump leads in the polls as he faces rivals Marco Rubio and Ted Cruz heading into the S.C. GOP primary on Feb. 20.
South Carolina polling averages
The S.C. Democratic primary is Feb. 27. Clinton has a significant lead in the state, whose primary falls one week after the party's Nevada caucuses.
62% 18%
Fact Checker
Trump’s claim that his border wall would cost $8 billion
The billionaire's claim is highly dubious. Based on the costs of the Israeli security barrier (which is mostly fence) and the cost of the relatively simple fence already along the U.S.-Mexico border, an $8 billion price tag is simply not credible.
Pinocchio Pinocchio Pinocchio Pinocchio
The complicated upcoming voting schedule
Feb. 20

Democrats caucus in Nevada; Republicans hold a primary in South Carolina.

Feb. 23

Republicans caucus in Nevada.

Feb. 27

Democrats hold a primary in South Carolina.

Upcoming debates
Feb 13: GOP debate

on CBS News, in South Carolina

Feb. 25: GOP debate

on CNN, in Houston, Texas

March 3: GOP debate

on Fox News, in Detroit, Mich.

Campaign 2016
Where the race stands
Most Read



Success! Check your inbox for details.

See all newsletters

Close video player
Now Playing

To keep reading, please enter your email address.

You’ll also receive from The Washington Post:
  • A free 6-week digital subscription
  • Our daily newsletter in your inbox

Please enter a valid email address

I have read and agree to the Terms of Service and Privacy Policy.

Please indicate agreement.

Thank you.

Check your inbox. We’ve sent an email explaining how to set up an account and activate your free digital subscription.