Yet another case where prediction markets would come in handy

From the Financial Times (not Pravda):

Nikolai Vasiliev, a Crimean businessman, can hardly wait for his region to be annexed by Russia. It would “give us a new lease of life”, he says.

Mr Vasiliev is the general manager of AO Pnevmatika, a former state-owned engineering company that has struggled since the Soviet break-up. Now, he hopes, a bold future beckons in a newly minted Russian province.

“A huge market will be opened up to us,” he says. “We will have access to cheap Russian raw materials and low-priced gas and electricity. And the wages of our workers will rise to Russian levels.”

…Alexander Basov, head of the local chamber of commerce, echoes a widely held view that a Russian-ruled Crimea would garner more attention – and investment – from Moscow than it ever got from Kiev.

“Since independence, Ukraine has treated Crimea like an unloved stepchild, not a real son,” he says. “No big factory has been built here in the last 20 years. The only spending was on repairs to the road from Simferopol to the state dacha in Yalta.”

Yet on the other hand:

There are plenty of dissenting voices. One leading Simferopol businessman, who asked not to be named, said the impact of union with Russia on Crimea’s economy would be devastating, especially if the rest of the world refused to recognise it. “There will be no foreign investment in a place with such a dodgy legal status,” he says. “And the odds are that even Russians will not want to invest here.”

There is also concern that Crimea could not survive a total break from mainland Ukraine, the source of much of its water and electricity, with fears that if the peninsula votes to secede in a referendum planned for Sunday, Kiev could retaliate by switching off the lights or imposing an economic blockade. Already, Mr Vasiliev said, train links between Crimea and other parts of Ukraine had been cut or scaled back and online bank transfers from the Ukrainian Treasury shut down.

The huge bureaucratic headaches any change in Crimea’s status would cause are also worrying the business community. “I’ll have to get a new passport, re-register my business, my house,” said Ibrahim Zinedin, who trades in construction materials. “All that will take time and cost a lot.”

Loyal MR readers will not be surprised to read I would put my bets on the more negative scenario.  There is more here.


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