"The bridge did not help". How the Kerch Bridge opening affected life in the occupied Crimea

"Prices for all goods have risen over the past year. How could this happen? After all, we were told for several years that high prices in Crimea are caused solely by logistics. They say it is difficult and expensive to carry goods from mainland Russia to the peninsula, therefore prices are so high. The bridge was opened, launched, what's next? The prices did not even stop. They continued to rise. Or do you think that we have more tourists with the opening of the bridge? I will say more: they are fewer compared to previous years. The fact that neither international nor Russian (from the mainland) companies come to us is on the top of that. Even the bridge did not help", - Yekaterina, resident of occupied Simferopol admits.

Indeed, according to the data of Krymstat, the inflation rate in 2018 on the peninsula was 5.5% (with 4.3% all over Russia), what is the highest figure in the Southern Federal District of the Russian Federation.

Crimea is no stranger to be a record holder in inflation rate. Since the beginning of annexation of the peninsula, the inflation rate there has remained one of the highest in Russia. Thus, the sharpest jump was recorded in 2015 (inflation was 26.4% against 12.9% for the whole of Russia). Since 2016, inflation has slowed, but the Crimea still remained in the top of the regions with the highest price increase in Russia.

Local "officials" explained this by the lack of competition, logistical difficulties and blockade on the part of Ukraine.

"The size of the average monthly salary of a full-time employee has increased in comparison with 2014. But prices have also increased. This is one of the main social problems today. The rise in prices is partly connected with logistics - I mean the absence of a bridge across the Kerch Strait. Energy blockade affected the level of prices as well. But in about half of the cases, we are dealing with outright speculation. This is the result of bad faith, or rather greed, of some Crimean entrepreneurs and producers, as well as their colleagues from other regions of the country", - the so-called head of the "Republic of Crimea" Sergey Aksyonov said in 2016.

Later he already "fed" the Crimeans with promises that after the launch of the Crimean Bridge (the Kerch Bridge) prices would be stabilized.

"We expect that the opening of freight traffic on the Crimean Bridge, and then the railway line, will increase the import of products to the peninsula and level of competition. I am confident that prices will be stabilized", - Aksyonov said.

In May 2018, the Kerch Bridge, which connected the peninsula with the mainland of Russia, was opened. However, this did not affect the pricing policy. More precisely, it was reflected, but upward…

"Our prices have become a new attraction of the Crimea"

"The inflation rate in the Republic of Crimea in the end of 2018 was 5.5%. Among the regions of the Southern Federal District, the consumer price index in the Republic of Crimea was the highest", – recent study by Krymstat said.

According to official statistics, over the past year, food prices rose by almost 7%, non-food prices – about 4%, and Crimeans began to pay 5% more for services.

Thus, during the year, the most expensive were eggs (47%), sugar and flour (30%), vegetables (15%), meat and poultry (14%), bread (12%), ice cream (8%) and oil (7%). Among the non-food products, motor fuel rose the most (almost 16%), as well as tobacco products and print media (about 10%).

The cost of the minimum set of products in the Crimea increased from $36 (May 2014) to $62 (September 2018), that is, almost twice. By the way, its cost has increased by 8% since the beginning of 2018, so after the launch of the notorious bridge, even the minimum set of food products has risen in price. This is only official data. Local residents complain in conversations with OstroV that prices have risen by at least one third over the past year.

"Our prices have become a new attraction of the Crimea. Tourists who come from the mainland of Russia or Ukraine are lost for words when they go to the market or supermarket. They do not understand why prices are lower in Moscow, Rostov or St.Petersburg than in the Crimea. But one thing is tourists who come for one week and go back home, another thing is the locals who have to live with it all the time. Explain how eggs can rise in price by almost one third in three months? And this is already after the launch of our bridge. Grains, milk, bread, canned food - all became more expensive over the past six months. It seems that the suppliers are paying for transit across this Crimean Bridge and this "bribe" is being added to the products' prices. It would be better if no bridge was launched", - Svetlana from Crimea says.

OstroV found out the effective prices of fruits and vegetables in one of the markets of Sevastopol:

Eggs (1 dozen) - $1.3,

Chicken fillet (1 kg) - $5.4,

Flour (1 kg) - $0.7,

Sugar (1 kg) -$0.8,

Buckwheat (1 kg) - $1.3,

Rice (1 kg) - $1.1,

Potatoes (1 kg) - $0.6,

Apples (1 kg) - $0.7,

Sunflower oil (1 liter) - $1.3.

"Prices are rising not only for food. These are also utilities, gasoline, public transport, medicines, clothing, household appliances. I will tell you more, in December last year, they increased the cost of food in the Simferopol school where my nephew is studying. They even raised illegal fees "for school and class repair". This is explained by inflation in the region. To prepare a child to school also became more expensive - on average by one third compared to the last year", - Yekaterina, resident of Simferopol says.

According to the local occupation authorities, the decline in prices did not occur on the peninsula after the launch of freight traffic on the Crimean Bridge, because "many people still use speculative opportunities to earn as much as possible".

"At the same time, the majority of those who sell goods to us at inflated prices are our Crimeans who live nearby, but who do not consider it shameful to speculate on their fellow citizens", – "head" of the Crimea Sergey Aksyonov noted.

He stated that until the state regulation of prices is introduced in the country, the authorities cannot effectively influence the price policy.

"Due to the fact that we have no large chains and competition, there is a speculative factor. I hope that the big players will come here after the opening of railway section of the Crimean Bridge. Only the market will be able to adjust the prices of food, medicines, etc. Unfortunately, we do not have any other tools to influence prices, apart from monitoring", - Aksyonov believes.

Later, the official stated that prices would begin to decline after the opening of railway traffic on the Crimean Bridge.

"Global changes in pricing will occur after the opening of railway part of the Crimean Bridge. Railway is the cheapest means of transport that will ensure fast delivery of goods at a normal price. I think that prices will fall, but so far the big market players have not entered the Crimea", – Sergey Aksyonov said.

The so-called "head" of the Crimea also did not rule out a partial reduction in the price of fuel on the peninsula, but specified that the conversion of the cost of a liter of fuel would be possible only after the launch of railway part of the bridge crossing the Kerch Strait.

"The federal government has taken measures to control gasoline prices. The agreement with fuel suppliers on the "upper limit" is signed. I think that there is a reserve for reducing the cost of fuel, but we will not significantly reduce the price of fuel carrying it by trucks. The railway will start its operation and we will recalculate the price of every liter", – he assured.

That is, the occupation authorities "feed" local residents of the Crimea with promises again.

"Now we are being fed new fables that prices will decrease with the launch of railway traffic on the Crimean Bridge. But for some reason, they were silent about this before. Now it suddenly turned out that food prices could be stabilized not just by the bridge, but by the railway. I confess to you that the Crimeans very quickly got over the joy of the Crimean Bridge. Residents of mainland Russia rejoiced longer because they simplified their way to the peninsula. And now there is practically no information in the local media about this bridge, although earlier, it was written only about it, that allegedly they will build the bridge and the life of the Crimeans will change. The life has changed, but only for the worse. Therefore, now they just keep silent about it", - Crimean resident Alexey says.

We should not forget that since January 1, the decision of the Russian government to raise the VAT came into force: the value-added tax is now charged at a rate of 20%, not 18%. According to Russian economists, this will affect the rise in prices for consumers in 2019.

"First of all, prices in foodstuffs will increase, the car industry, real estate market and construction sector will suffer. In addition, prices in the services market will increase. Carriers will also increase their prices for tariffs", - Russian economist Andrey Nazarov believes.

His words are confirmed by a study of the International Adizes Institute , conducted in 2018, - the majority of Russian companies will raise the prices of their goods due to the tax increase.

"80% of large companies are planning to raise prices due to the growth of VAT. Some companies began to adjust in advance and raised prices even before the New Year: this is indicated by accelerating inflation in December. Consumer activity also increased: Russians began to buy non-food items more often", - the survey said.

So the Crimeans should get ready for a new price jump.

"Tourists arrive to look at the bridge"

According to official data of Krymstat, about 6 million people had a rest on the peninsula in 2018, what is a third higher than last year.

"About 1 million people arrived across the border with Ukraine, what is 17% more than last year. Ukrainian tourists make up 16% of the total tourist flow", - noted in the report of Krymstat.

The most interesting thing is that in the beginning of 2018, "head" of the Crimea, Sergey Aksyonov complained about the decline in tourist flow. However, he attributed this to bad weather, high prices for air tickets and food.

"The reason for the decline in tourist flow was not only the cold weather at the beginning of the last holiday season, but also systemic factors that hinder the development of the industry. First of all, these are high prices for air tickets… Another unfavorable factor is related to the price-quality balance which leaves much to be desired", – he said.

According to him, share of the price of air travel to the Crimea is from 40 to 60% of the total cost of rest.

"Prices in the resort regions of the republic are often more than three times inflated. Such a situation is not acceptable to anyone: nor for producers, from whom products are bought at a low price, and then resold at an exorbitant price, neither for the republic's budget, which receives less taxes, or for Crimeans and guests of the peninsula, who are forced to overpay several times", - Aksyonov stated.

How did it happen that the prices of food and air tickets did not change, the service remained the same, but almost a record number of tourists visited Crimea at the end of last year? The answer is simple: the Crimean Bridge and information campaign around its opening.

"Indeed, there were more tourists in Crimea last summer than usual. But! The statistics speak only of those who entered the peninsula. Most of these people just went to see the Crimean Bridge. There were even special excursions and tours, when the group of tourists was driven over the bridge to Kerch for a small tour and back. Many Russians went by car just to take a picture against the background of the bridge. But you cannot call them tourists who left their money in the Crimea. Therefore, the bridge did not affect the tourist season. And those who came and saw that prices continue to rise and service is at best in place, are unlikely to return next time, because when you pass a bridge, you get on broken roads to a soviet service with inadequate prices. Few people need this kind of rest", - Crimean realtor Alexander told OstroV.

According to local realtors, who have been engaged in tourist accommodation in the Crimea for many years, the last tourist season was not different from the previous one.

"As a realtor, I can say that this tourist season was not different from previous ones. Russian patriots, servicemen, military retirees (this is a particularly numerous category), state employees and minor bureaucrats are still traveling. The percentage of tourists from Ukraine remained the same, this is about every fifth visitor. Mostly they come from the south-eastern regions, there are many residents of the Donetsk and Luhansk oblasts. They say that it is safe here to rest, but I noticed that every year, they ask to find them cheaper accomodation. As for the foreign tourists, there is no such", - Alexander, Simferopol tourist agency employee says.

As for the price and quality balance, the conclusions can be drawn from the reviews of Russians who share their impressions of the 2018 rest in the Crimea on one of the forums.

"My wife and I rested in the village of Novyi Svit in September 2018. The bay itself, sea and mountains were just amazing, walking along the Golitsyn Path and juniper grove were especially impressive. But all the positive things end there. The service is poor, stores are empty, local population is skinflint. When there was room allocation, a certain Maria decided to finagle us (she keeps several cottages and houses in the center, promises suites at a reasonable price, and then suddenly changes the prices for accommodation, - there is no written agreement, and the verbal agreements are air for the local realtors). Flower beds along the embankment - dry thickets of weeds. There are heaps with rotting algae all over the beach, and no one cleans them. When the rain started, a fetid liquid flowed out of the sewer, apparently the rainfall does not cope with the flow of water, and this huge puddle stank terribly the whole day.

Such a beauty got to the wrong people", - Vladimir writes (September 2018).

"We were in the Crimea by car, terribly, no roads, the price of gasoline is impressive, we drove along the coast and stopped in the village of Shtormove - the cleanest sea was here. There is nothing more to remember apart from the sea, high prices for everything with neither service nor quality. There are a lot of different cafes andrestaurants (generally in the Crimea), but they do not know how to cook or do not want, while keeping the Moscow price. There is nothing in the shops, mud and ruin is everywhere. We like Sevastopol - the city, sea, beach, some kind of civilization. Quite inhospitable locals, not a single kind person was caught in 18 days, what is very strange in the resort area. Never again in the Crimea. Disgusting", - user Irina describes her rest (September 2018).

"There is nothing to do in the Crimea, service is zero, but they want a lot of money, you can go to Cuba for this money, but not to the Crimea. There is no drinking water, there are not enough litter bins and toilets, know to own cost. We were with the family, we are from the North, in comparison with the same Anapa, it is more expensive here, it takes longer to drive, the service is worse and fruits and watermelons that are grown here cost as in the north. Conclusion: who wants to throw out his considerable, honestly earned money and go home from here with negative emotions, go to the Crimea!!!", - Konstantin recalls Konstantin (July 2018).

There are a lot of similar reviews on the Russian forums.

It is not clear how the rail traffic on the bridge stabilize prices, if inflation, first of all, touched local products (eggs, flour, sugar, vegetables, fruits). Apparently, this is a new "trick" of the occupation authorities: blame Ukraine for all troubles (actively used in the first years of annexation) and promise improvements "in the near future". What they will say after the launch of railway on the Kerch Bridge, we can only guess…

"The Kremlin has become less patient towards the Crimea. If before it poured a lot of money, if only local people were satisfied, now such injections have decreased significantly. They want to see and accept us as an equal Russian region. So that we can achieve a payback, so to speak. Therefore, they slowly tighten the nuts. A fresh water issue cannot be solved. In the absence of foreign companies and, consequently, competition, prices and good service will never be stabilized in the Crimea. Although, on the other hand, local retirees and military personnel with patriotic feelings will forgive such side effects from the "great joining". Propaganda continues to do its work", - one of the ex-officials of the Sevastopol "government" told OstroV off the record.

Andriy Andrieyev, OstroV