The price of the issue

Crimean Crimean Campaign and Russian wallets

More than 70 % of the Levada Center surveyed by sociologists are confident that the accession of Crimea will have “exceptionally positive” and “rather positive” economic and political consequences for the country. The hangover will be heavy

Whether patriotic Russians will go to Crimea is a big question. Feodosia, March 24, 2014

*The survey was carried out 21–24.03. 2014, according to the representative All -Russian sample of urban and rural population among 1603 people aged 18 years and older in 130 settlements of 45 regions of the country. The statistical error does not exceed 3.4%. ** The survey was conducted on 15-16.03. 2014 in 130 settlements in 42 regions, edges and republics of Russia. The statistical error does not exceed 3.4%.

A full -scale crisis, most likely, would cover the Russian economy in the coming years in any case. In this sense, the sanctions of the United States and Europe for the rejection of Crimea and the possible expansion to the eastern regions of Ukraine are more likely to the Kremlin’s hand: there will be someone - of course, to the West! - To blame for your own mistakes. But the enthusiastic reaction of compatriots to the annexation of the peninsula is amazing. According to the latest survey of Levada Center*, 79% of respondents regard the inclusion of Crimea in Russia as a return to the role of a great power. The share of Russians who believe that cases in the country are going in the right direction, reached record pre-crisis (as in March 2008) 60%.

The sanctions are so far scary Russians slightly. Only 13–20%, according to state sociologists from VTsIOM, consider the exclusion of Russia from the G8, as well as possible problems with obtaining visas or even a breakdown of diplomatic relations with developed countries as reasons, because of which one could think about the refusal of the annexation of Crimea **. However, this is understandable: now, according to USPROCES, there are only 17% of the population, while there are no more than 7% outside Russia and the CIS, and once there were no more than 30% of respondents. What do we have visas?

The only thing that theoretically could force the Russians to change their point of view on the capture of Crimea is economic sanctions. But even because of them, only 26% of VTIOMA respondents are ready to think about the rejection of the annexation.

Sovereign VS interests

For their myopia, the fellow citizens will be brutally punished. The impact of Crimean policy and even more so possible actions by Russia in the eastern and southern regions of Ukraine will overtake the population through several channels. Some of these negative influences are objective, it does not depend on the "evil will" of the governments of developed countries. Having been in the post -Soviet space, an aggressive policy, in fact, demonstrating the readiness to redeem the world map and solve issues by force, Russia excludes itself from the circle of economic partners with whom you can deal.

The second part associated with sanctions may seem subjective. How actively will Washington, London, Berlin, Paris, Brussels try to “shorten” Russia for violation of world order? Any sanctions are beaten not only by their addressee, but also for the subject imposing sanctions. It is unprofitable to reduce the turnover with Russia, Great Britain - to lose Russian buyers of real estate in London and lose the largest Russian companies and banks as financial customers. All Europe is needed by Russian gas. Nobody benefits from sanctions. Therefore, the United States and the EU introduce them so carefully, while limited to measures that mainly have psychological significance. But the trouble is that, in order for the Crimean aggression to painfully hit the wallet of Russians, no external sanctions are needed. And indeed external influences.

Budget and pension money

A small Crimea with a “skill” of its development can break through a fair hole in the Russian budget. Bringing the peninsula to the Russian standards of pensions and salaries of civil servants, state employees, military, police, judges and prosecutors (there will be more of them in Crimea now) - the pleasure is expensive. Initially, the Ministry of Finance and the Ministry of Labor estimated the amount of budgetary assistance to Crimea for 2014 at 91 billion rubles, of which 36 billion will go to raise pensions, and the rest - to balancing the budget (that is, bringing salaries to the Russian level).

Already now it is clear that this assessment is underestimated. On terms of anonymity, officials of the Ministry of Finance say that the Crimean subsidy-2014 will amount to at least 110-120 billion rubles. And this, without taking into account the “investment” expenses for the construction of the bridge (or tunnel) through the Kerch Strait, the development of Crimean energy, housing and communal services, etc. There is no upper limit: preparation for the Olympiad in Sochi showed that in the presence of political will, any amount can be mastered. Most likely, the total cost of Crimea this year will exceed 200 billion rubles.

There is no tragedy in this: the budget will withstand. But from the Russians, if they followed economic news, a simple circumstance would not have covered: the actually unplanned Crimean expenses will completely “eat” the contributions from the funded pension systems from the salaries received this year. Recall: last fall, it was decided for a year to freeze deductions to the funded pension system. This means that all current income deductions are sent for payments to current pensioners, and are not invested in financial instruments that allow employees to accumulate for a future pension. The decision on the annual freezing of savings made it possible to increase the budget reserve by 243 billion rubles (the Ministry of Finance reduced the transfer to the Pension Fund for this amount). Just such an amount, most likely, will eat Crimea this year.

With such use of future pensions, one could agree if it had benefited Crimea. But the situation is exactly the opposite. In addition to the nature of amazing beauty and the inclusion in great historical times, Crimea has always been beautiful and relative cheapness. The current average salaries in the Crimea (January - 2693 hryvnias, or 8555 Russian rubles at the current rate) below the average Russian -Russian by 3.5 times! According to pensions (pensioners in Crimea a little over half a million), the discrepancy is slightly lower: the Crimean is 2.3 times below Russian.

It is obvious that a sharp and simultaneous increase in the monetary allowance of pensioners and state employees will provide Crimea 2-4 times at least 50 percent increase in prices compared to the end of 2013. The alignment of the Crimean prices of the Sochi level, together with a large -scale construction and a sharp increase in the number of security forces, will make a visit to the peninsula with attractive except for the employees of Gazprom and Rosneft. Therefore, it was no coincidence that a slightly blasphemous proposal to turn Crimea into the gambling zone appeared. Not only residents of Ukraine, but also Russians are now losing as a convenient place to relax for relaxation. As a result of the measures taken on the peninsula taken on the peninsula, only the state economy will be able to develop: a sharp leading price to the Russian level knocks out the soil from private business. Now the only scenario in which it will be possible to “recapture” the costs of Sochi and Crimea is a total ban on visiting the countries of Europe, Turkey and Egypt.

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The most difficult and probable sanctions are “unspoken”: the ban on foreign banks to lend to Russian companies and banks. If this happens, then the largest Russian companies will come to the threat of default

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New expenses missed income

Without any sanctions, the Crimean adventure deprives Russian income companies. It is difficult to conduct international business, when almost everyone in the world treats your country as an aggressor and violator of world order. According to the Pew Research*survey, and before the beginning of Crimean history, 39% of respondents considered the global image of Russia unfavorable, 36% - favorable. In Europe and Turkey, the balance of assessments is even worse for Russia, and most importantly - in recent years it has become more negative. Obviously, there is nothing good to expect from the next survey. Why is it important? Firstly, now Russian businessmen, communicating with foreigners, have to first explain that they are “normal people”, and not agents of an incomprehensible empire. Foreigners are now much more difficult to convince that they need to deal with Russian counterparties, says the owner of a small Hi-Tech company. Secondly, the flow of tourists is reduced. If the United States or Europe gives its residents a recommendation not to visit Russia, the losses of travel agencies and the hospitality industry will become giant.

There are additional costs that obviously will not go for the benefit of the country's economy. The modest US sanctions against banks own by Yuri Kovalchuk (Rossiya Bank) and the Rotenberg brothers (SMP Bank) forced the Kremlin to intensify the work on creating a national payment system. So far, everything goes to the fact that it will be quite expensive for banks and their customers and not a very convenient system.

Undoubtedly, defense expenses will be increased. The army showed its legal capacity - supporters of the annexation of Crimea believe that the entire operation with the Green Man was organized by the Minister of Defense Sergey Shoigu at a very high level. The combat effectiveness of the army in recent years has really increased significantly. These successes should be convinced by the leadership that the increase in expenses for the army was not in vain. And new victories - the Russian -speaking world of Crimea does not end - will require accelerated growth in expenses.

Economic decline, cheap ruble

Over the past six months, the ruble exchange rate has decreased by about 11.2% against the dollar and almost 14% against the euro. Crimean events forced the ruble to overcome the mark of 36 rubles ./ $ 1, and if not for the efforts of the Central Bank to support the course, it would now be even lower. Due to currency interventions in support of the ruble since the beginning of the year, international reserves of the Central Bank decreased by 4.7%, or by almost $ 24 billion.

If, before Viktor Yanukovych’s flight to Russia, economists expected that the ruble exchange rate to the dollar by the end of the year would not exceed 36/$ 1, now the forecasts are selected by 38/$ 1. The outflow of capital this year, according to the forecast of the ex-Minister of Finance Alexei Kudrin, will be $ 150–160 billion (the forecast of the Ministry of Economic Development-$ 100 billion). Whose forecast is true, the trend is obvious: the outflow of capital will continue, the ruble will weaken, and economic growth will not exceed 1%, but rather amounts to 0-0.5%.

In a crisis scenario, the Russian economy this year may lose up to 1.8% of GDP, the World Bank believes. This will happen if, as a result of the escalation of political risks, Russian banks and companies will be cut off from international capital markets. Stopping income growth (in January-February 2014, they were 0.3% lower in real terms than a year ago) in this case will be replaced by a decline by 3-5%. The growth of real (adjusted for inflation) salaries, now amounting to about 6%, will cease.

Another important consequence of Ukrainian politics is that it actually deprives Russians of convenient investment tools. Ruble assets cease to be attractive due to the ongoing reduction in the ruble course, and transactions with foreign banks in the coming years will be more and more complex as the Kremlin will get used to the role of the “besieged fortress”.

Deteriorations will not be instant - all participants are clearly tuned to the game “TREA”. But Russia has almost no good options

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Financial blockade and oil and gas embargo

We want it or do not want it, but we must wait for sanctions. Especially in the case of the occupation of the eastern and southern regions of Ukraine. The most severe and probable sanctions are “unspoken”, in the words of the First Deputy Prime Minister Igor Shuvalov. We are talking about the unspoken ban on foreign banks to lend to Russian companies and banks, about the temporary moratorium on new investment projects and the departure of foreign money from the Russian stock market.

If this happens, then the largest Russian companies will come to the threat of default. The state will have to send the funds of budget funds to support companies - as it was in 2008-2009. This will deprive the budget of the “airbag” and will inevit the reduction of budget expenditures in case the financial blockade is delayed. The fall of the ruble will accelerate, the state will have to return to the practice of mandatory sale of foreign exchange earnings by exporters, introduce restrictions on the export of currency from the country and a deal with it within the country.

Sanctions are less likely in the form of the arrest of international reserves of Russia located in the US State Bums and the EU countries. This step can lead to the actual rejection of the full convertibility of the ruble and return to stimulating the economy due to ruble pumping. In this case, the country is provided with high inflation and a sharp reduction in imports.

Finally, the third direction of economic sanctions is the US attempt to temporarily lower the price of oil and gas or even introduce an embargo to their deliveries from Russia. This measure is extremely disadvantageous to Europe, so in order to get an embargo, the Russian security forces will have to work hard. But everything is possible. At the embargo, Russia is going to answer the accelerated construction of the gas pipeline in China. These are additional expenses, because the same gas volume that would otherwise be sold to Europe will go through the new gas pipeline.

Manipulations with the price of oil and gas are hardly likely scenario. After all, a short -term decrease in prices for Russia will not affect. And long -term manipulation will make the development of new deposits unprofitable, which will have to replace Russian oil and gas in the global market. Another thing is that in the horizon of 10-15 years, fuel prices are likely to not rise in real terms. The price of oil has not changed in nominal terms for the third year. Five more of the same years - and the accumulated effect will be (taking into account dollar inflation) is equivalent to falling oil prices from $ 110 to $ 86 per barrel in 2011 prices. At the same time, in the future of 2020–2030, several factors will work at once to reduce oil and gas prices: investments in energy conservation, the development of alternative energy, an increase in oil and gas production from non -traditional sources.

So, the Russian economy was in a very difficult situation. Deteriorations will not be instant - all participants are clearly tuned to the game “TREA”. But Russia has almost no good options. No, one is, completely incredible: to change your mind, to play back, get out of the Crimea and abandon the idea of ​​affecting the life of Ukraine. However, the hope that the mind and rationality will prevail in the minds of the Kremlin comrades - there is almost no such hope left.

Photo: Shamil Zhumatov/Reuters