Cabinet Outlines Costs of Crimea
Published: March 25, 2014 (Issue # 1802)
The costly consequences of expanding Russia's territory became clearer Monday when Prime Minister Dmitry Medvedev revealed a Crimea to-do list for the government and its corporations.
Russia will need to take care of entitlements and services ranging from retirement pensions to tax rebates to electricity supply in a peninsula that has no overland links with its new sovereign and used to be part of a different country, Ukraine, just a few days ago.
"It is the first time in the history of contemporary Russia that the Cabinet has to solve a problem that is so massive and multidimensional," Medvedev said. "It is a good way to show the potential of the contemporary Russian state as well as its managerial skills."
Crimea formally became a Russian region on March 18 after a referendum that remains unrecognized in the West, and that has brought about a string of sanctions slapped by the U.S. and European Union on Russian government officials, businesspeople and a bank described as the preferred financial institution of President Vladimir Putin's inner circle.
In one of the most expensive measures Medvedev announced Monday, the government could spend 36 billion rubles ($1 billion) this year on getting Crimean pensions up to par with the rest of Russia. About a third of the peninsula's population of 2 million people are pensioners.
The impact of the money inflow could be so strong as to send local consumer prices climbing, Medvedev warned. He called for a gradual schedule of increasing the payouts.
At the same time, other welfare benefits to be provided by Russia that Crimeans used to have from the Ukrainian government will remain at the existing level for a transitional period that ends in January next year, Medvedev said.
"Nobody should lose anything," he said.
In another expense, Medvedev said that the government would raise the salaries of workers in Crimea paid from the state budget to match the average Russian level for these types of jobs. He referred primarily to teachers, healthcare workers and staff at museums and libraries.
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