Crimea’s Water Crisis Is an Impossible Problem for Putin
(Bloomberg Opinion) -- A water emergency in Crimea is absorbing billions of taxpayer rubles as Russia tries to patch up an impossible problem stemming from the peninsula’s annexation in 2014. President Vladimir Putin’s Black Sea gem looks increasingly like a millstone.
Ukraine dammed the North Crimean Canal seven years ago, cutting off the source of nearly 90% of the region’s fresh water and setting it back to the pre-1960s, when much was arid steppe. Add a severe drought and sizzling temperatures last year, plus years of underinvestment in pipes and drilling, and fields are dry. In the capital Simferopol and elsewhere, water has been rationed.
Tiny Crimea gave Putin a boost, when, following protests that overthrew Kyiv’s Russia-friendly government, he seized a territory that belonged to Moscow for centuries but had been part of an independent Ukraine since 1991. The annexation of the territory that’s equal to less than 0.2% of Russia’s total helped lift Putin’s national popularity to record levels in the year or so that followed. That bump has since faded.
Today locals, who were made ambitious promises in 2014, are struggling with the fallout from a wide-ranging nationalization drive that's not always served their interests, a poorly handled, muffled coronavirus crisis — and dry taps. Sanctions-inflated prices, high even after a $3.7 billion bridge over the Kerch Strait linked the territory to Russia, have meanwhile eaten away at pension and salary increases. Opinion polls are hard to come by, but anecdotal evidence reveals building frustration.
The need to pour even more cash into Crimea means Russians elsewhere may lose out. They’re already suffering in an economy slowed by Western sanctions incurred over that move and other misdeeds, and bearing the brunt of the Kremlin’s decision to focus on stability over growth, limiting pandemic income support. The crisis of 2020, perhaps as much as 2014-2015, has hurt households first and foremost.
Crimea cost 1.5 trillion rubles to support in the first five years of occupation, equivalent to roughly two years of Russia’s education budget, according to one former central bank official — more than $20 billion at today’s exchange rate. This year, subsidies, grants and subventions alone will add up to around $1.4 billion. And the price tag is set to rise.
Water isn’t the only struggle, but it’s been the toughest to resolve, especially since winning the return of Crimea remains a priority for Ukrainian President Volodymyr Zelenskiy. Last month, the Simferopol reservoir was 7% full. Without water from the Dnieper River, Crimea’s arable land has shrunk, from 130,000 hectares in 2013 — already a fraction of Soviet-era levels — to 14,000 in 2017. Thirsty crops like rice have shriveled.
It wasn't until last year that officials were spurred into significant action on water, with a 48 billion-ruble plan that includes pipe repair to end wastage, well drilling and, crucially, desalination — expensive for crops, but a solace for residents. Government officials said at a Kremlin meeting on Thursday that the problem will be solved.
That’s a challenge. Even if there’s more rain this year, it’s long-term access to cheap water that is vital. That could easily be achieved by reopening the canal — an option Kyiv rules out. Barring that, the idea of a self-sufficient Crimea is a distant one, however many Chinese tourism delegations are welcomed in the hope of drumming up new sources of cash.
Water disputes are nothing new between neighbors and near-neighbors, from Tajikistan and Uzbekistan sparring over the Rogun dam to the Nile and the Grand Ethiopian Renaissance Dam, or the Mekong, in Southeast Asia. In Crimea, it touches the very heart of Russia’s balancing act, between geopolitical ambition, national pride, rising discontent — and the costly reality of sanctions holding back development in the territory to the point where the Kremlin wants to offer some big-spending investors anonymity.
If it isn’t patched up soon, this crisis risks coming to a head at an important time for Putin. He needs a solid win in September’s Duma state assembly and regional elections — the last before 2024, when his current term ends. Russians still overwhelmingly support the annexation of Crimea. It’s less clear that will continue as the resulting costs rise, national growth stagnates and the pandemic endures, potentially prompting other regions to demand their share of spending.
The Kremlin faces a difficult pass. After unprecedented street protests over the jailing of critic Alexey Navalny, it’s cranked up efforts to silence naysayers, with social media clampdowns and the mass arrest last weekend of municipal deputies.
Could rising political pressure and sheer thirst combine to spark a Russian incursion into Ukraine? Such a move could mean access to the dammed canal, while delivering a timely nationalist boost. But that seems improbable. It would raise questions over plans for the eastern Donbas separatist region, where conflict simmers. And Ukraine is useful bogeyman to explain away the failure to develop Crimea, Maximilian Hess, a fellow at the Foreign Policy Research Institute, points out — an easier discussion than under-investment and allegations of kleptocracy.
Water interests on both sides could even shape helpful, if informal, bargains, Hess adds. One possibility would be for Russia to provide guarantees around disputed access to the Sea of Azov, through which Ukraine exports steel, coal and more. In 2018, Russia seized a group of Ukrainian ships and blocked off the Kerch Strait.
The reality is there’s no prospect of an imminent solution. Parched Crimea, where even Russia’s banks fear to tread, is a reminder that the price of international isolation means costly life support and stagnation for all involved.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.
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