12:23 16.07.2021

Economic losses from temporary occupation of Crimea by Russia amount to $135 bln – study

4 min read

KYIV. July 16 (Interfax-Ukraine) – Economic losses from the temporary occupation of the Crimean Peninsula by the Russian Federation amounted to $135 billion, according to a study by the Center for Economic Strategy, commissioned by the representative office of the President of Ukraine in the Autonomous Republic of Crimea (ARC).

"The Ministry of Justice made the first official assessment in the spring of 2014, then they counted UAH 1.2 trillion. At the then exchange rate, this is slightly more than $100 billion," senior economist at the Center for Economic Strategy Dmytro Horiunov said a press conference at the press center of the Interfax-Ukraine news agency on Friday.

According to the current study, $135 billion is a direct loss of assets, which includes the value of land on the Crimean peninsula ($3 billion) and proven mineral deposits ($52.3 billion) in the form of natural gas and crude oil, loss of residential real estate by the population ($42,7 billion), losses of private companies ($18.4 billion) and banks ($2.7 billion), losses of the state ($14 billion) and local communities ($1.7 billion).

It is noted that the assessment of the Center for Economic Strategy does not include the macroeconomic consequences of the temporary occupation of the Crimean peninsula, because they cannot be separated from the influence of the general complex of aggressive actions of the Russian Federation against Ukraine. Thus, this is only the minimum proven estimate of Ukraine's economic losses.

According to the study, the price of agricultural land in Crimea can be estimated at $4,000 per hectare, and the total cost of 755,000 hectares of sown area is about $3 billion.

Also, Ukrainians could lose almost 935,000 apartments, which is equal to 49 million square meters, which at the time of the occupation is almost $43 billion. It is noted that since then, housing prices have increased. During the first year after the occupation, the cost for housing increased by 50% in dollar terms, and in the next five years - by another 12%.

In addition, private owners of assets in Crimea, which had 20,000 enterprises, lost assets worth $18.5 billion. Generation and distribution of electricity, gas distribution, processing industry, as well as construction, part of a recreational complex, and other types of services are among the lost industries.

Among other things, the assets of state-owned companies registered directly in Crimea before the temporary occupation amounted to $2.7 billion as of the beginning of 2014.

It is noted that the energy companies Chornomornaftogaz and the Feodosia enterprise for the supply of petroleum products, transport infrastructure facilities (sea trade and fishing ports) are among the largest. A feature of the region is the presence of large state health care and recreational institutions and agricultural/food enterprises (for example, Masandra, Novy Svit, Magarach, as well as Simferopol and Sevastopol wineries were state-owned).

It is emphasized that the assessment of losses is necessary in order to compensate for these losses through international courts by obliging Russia to pay the corresponding amounts or by seizing the assets of the subjects involved in the occupation in Ukraine or even abroad.

Claims of Ukraine as a state, public and private companies and individual citizens have already been filed with the European Court of Human Rights (ECHR, Strasbourg), the International Criminal Court and the International Court of Arbitration (both in The Hague), the International Tribunal for the Law of the Sea (Hamburg), and also in the courts of the Netherlands, France and Switzerland.

According to head of Kyiv-based prosecutor's office for the Autonomous Republic of Crimea and the city of Sevastopol, Ihor Ponochovny, this study will help in the investigation of criminal proceedings concerning Crimea.