Olga Efimova
Crimea was an active participant in the international trade before the annexation – its trade turnover was estimated at billions of dollars and the number of partner-countries was over one hundred. Today the situation has changed dramatically: due to the Western sanctions against the occupied peninsula, the trade turnover as well as the number of importers fell sharply.
The foreign trade turnover of Crimea
The Russian occupation radically changed the situation – now it is virtually impossible to trade with Crimea because of the sanctions imposed by the US, EU and other countries. Therefore, foreign trade relations with the peninsula decreased at a record pace. If in 2014 the foreign trade turnover amounted to 232.1 million dollars (it decreased by almost 10 times compared with 2013), then in 2015 this figure was even smaller – 216.7 million dollars. The number of trading partners has also decreased almost twice – from 121 to 69.
Diagram 1. The foreign trade turnover of Crimea in million dollars, 2013-2015
The main trade partners of occupied Crimea
The lion’s share of foreign trade relations of the occupied peninsula falls on Ukraine: 34.5% of the total turnover value. About 30.9% of Crimean goods are exported to mainland Ukraine, 37.1% of Ukrainian goods were imported to Crimea from the mainland. At the same time, the figures of the occupation statistics and the Ukrainian statistical bodies are very different.
For example, according to the State Statistics Service of Ukraine, the goods to the amount of 654 million US dollars were delivered in Crimea in January-September of 2015. However, the Krymstat says that good to the amount of just 40.9 million US dollars were imported on the peninsula from the mainland Ukraine and that is 16 times less than the Ukrainian figures.
There is the same situation with regard to the export of Crimean goods to the mainland: according to the occupation authorities, the goods to the amount of 19.9 million dollars were exported from Crimea, but according to the State Statistics Service of Ukraine – to the amount of 25 million dollars. By November 2015, the goods deliveries on the peninsula from the mainland and in the reversed direction were completely stopped because of the trade blockade of Crimea organized by Ukrainian activists.
The second most important trade partner of Crimea after the occupation was Turkey. Its share accounted for 14.6% of all Crimean imports and 13.6% of exports from the occupied peninsula in 2015. However, the relations between Ankara and Moscow have deteriorated sharply after the incident in the skies over Turkey, when the Turkish Air Forces shot down a Russian aircraft incurred into the country’s airspace. The result of this conflict was the economic sanctions imposed by Russia against the Turkish goods and the Turkish business as a whole. Eventually, Crimea sharply restricted trade relations with Turkey that will lead to the further fall of the foreign trade turnover in the future.
In addition to Ukraine and Turkey, in 2015 the occupied peninsula traded with Panama known for its offshore companies the most (11.6 of the trade value), china (8.6%) and India (3.8%). Before the annexation, Crimea traded mostly with Germany, Italy, the USA, Kazakhstan and other countries.
At the same time, just Panama could increase the trade turnover to a record level (up to 27.2% of exports in the total volume) among all countries trading with Crimea for 2015. However, by value, the export figures to Panama increased only by 2.6 times – from $9.3 million to $24.4 million.
There is also a paradoxical situation in trade with Turkey: its import on the peninsula increased from 7.6% to 14.6% in percentage terms, but at the same time, it decreased from $87.5 million in 2013 to $12.2 million in 2015 in money terms.
Experts explain this situation by two factors: decline in the region’s total sales turnover that leads to a decrease in amount of trading operations with some countries as well as the change of the product group for cheaper products.
Export of Crimea
There were no serious changes in the goods structure of the Crimean foreign trade – the region continues to trade mostly raw materials and semi-finished goods. However, according to Krymstat, now a third of the Crimean export is shipbuilding products (32%). Other articles of the Crimean export in 2015 – inorganic chemicals (26.2%), cereals (6.6%) and ferrous metals (6.4%). Before the annexation, Crimea exported tanning extracts (23.7%), fuel and mineral fertilizers (19.3%), ore (13.3%), boilers and machinery (11.1%) and inorganic chemicals (11%).
Diagram 2. Commodity structure of Crimean export before and after the annexation of the peninsula
Import in Crimea
The Crimean import experienced more serious transformation – because of sanctions, equipment and engineering products, which previously accounted for half of imports, practically were not delivered on the peninsula. Now the share of this position is only 17% in the total volume of imported products in addition to animal feeds (15.1%), alcohol (9.5%), glass (5.1%), furniture (4.8%) and vegetables (4.5%).
Diagram 3. Commodity structure of Crimean import before and after the annexation of the peninsula
Crimean foreign trade problems caused by the occupation will continue to get worse for various reasons. This includes both the general economy fall in Crimea, the effect of international sanctions, because of which it is impossible to trade with the peninsula, and the severance of economic ties with major partners – Ukraine and Turkey, whose share was more than a half of the total imports to the peninsula (53.4%) and amounted to 43.7% of the total Crimean exports.
As a result, the Crimean manufacturers will have to look for new markets for their products that is practically impossible in the current situation, and the Crimean people will have to get used to the Russian goods in the framework of the “import substitution” policy.
