What is the economic relation between Poland and Russia?

In the last months, during the Ukrainian crisis, Poland and Russia have been strongly opposed. Warsaw has firmly supported Kiev against Putin interference. But the position of Poland has deeply exposed itself to the ban of import of some products decided  by Putin.

Even the contraposition between Poland and Russia has solid roots in the history, this has not prevent both the Countries to have a natural economic connection.

Which is the economic relation between Russia and Poland?

Russia is the fifth economic partner of Poland: more than 5% of total polish export goes towards Moscow for an amount of 9 billions of dollars per year. An important item is represented by apples that are the 27% of total apples imported in Russia. 

Instead, Warsaw mainly buys from Moscow oil (93% of the total) for a business of around 17 billions of dollars per year. The rest of oil comes from Norway (3,23%), Kazakhstan (2,07%) and Tunisia (0,45%) (Source: Observatory of Economic complexity).

Those numbers explain why the ban of fruit import decided by Putin in August has so deeply touched the economy of Poland. By the way, Poles have answered proudly with a movement born on Social Media: "Eat apples to annoy Putin" ,inviting to eat polish apples as protest against the President of Russia.

Finally, it is interesting to notice that the anti-Russian position has been hold against economical interests. Poland has paid economic consequences, but it has also had frictions with some European Partners. It is interesting to see that sometimes values seem more important than money.

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A grey zone at the borders of Europe: Transnistria

National Emblem of Transnistria

In the last days some observers have pointed out that the situation in Transnistria could represent a further element of instability in the Ukrainian crisis.

But what is Transnistria? And why and in which way is it under the influence of Russia?

Transnistria is a small strip of land of 4000 Km² between the Republic of Moldova and the Western part of Ukraine. The population is made up by half million of people: 32% Moldavians, 30% Russians and 29% Ukrainians.

The region is very poor. The GPD per capita was around 1500 dollars per year in 2007. The economy is based on some old industries, especially in the sector of steel, heritage of the Soviet past. Moreover, the politically instability has facilitated the development of illegal traffics of weapons and drugs.

Transnistria can be considered independent de facto, but it is not recognized from the International Community. It was part of Moldavian SSR (part itself of USSR) till 1991 when it declared its own independence unilaterally. The region also hosted  the Soviet 14^th Guards Army and for this reason it has been the location of a huge deposit of weapons.

In 1992 there was a conflict between Moldova and Transnistria, ended after 5 months after a negotiate that included Moldova, Romania, Ukraine and Russia. The agreement between the two parts of the conflict indicated Russia as peacekeeper with a military contingent of 1200 soldiers. Even if there have been many negotiations for the withdrawal of that contingent, after more than 20 years it is still present in Transnistria. Officially the military presence of Moscow guarantees the peace, but substantially let Russia keep an important influence on the region.

It seems that the majority of the population is pro-Russia. In a referendum of 2006, the 97% of voters declared the will to be annexed to Russia. The Government of Tiraspol expressed the same desire after the facts in Crimea few days ago.

Even if Transnistria is less strategic than Sebastopol, the annexation could represent another victory for Putin. There could be two main consequences: from one side, it could strengthen the influence of Russia in the region, also obstructing the negotiates of partnership between Moldova and European Union. On the other side, it could intensify the Ukrainian crisis, with unpredictable consequences in the area.

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Crimea: some information to understand the current situation

The Ukrainian crisis is at the center of the international attention. The 11th March Crimean Parliament has voted the annexation to Russia, position confirmed from a contested referendum five days later. The 18^th March finally, this decision has been formalized with an agreement between Putin and the Prime minister of Crimea, Sergey Akesenov, while the official Government of Kiev  and the International Community haven’t recognized the vote.

I didn't have enough information to understand the situation in Ukraine, but I really wanted to know something more about Crimea and its history. In particular, I wanted to answer to three questions: how is the population of Crimea make up? Which are the most important pillars of the Crimean economy? Why is this Region so strategic for Moscow? 

First of all, Crimea has a population of around 2 millions of people officially made up by the 58% of Russians, 24% of Ukrainians and 12% of Tatars. It is important to remember that in 1944 the entire population of Tatars was deported in Turkey, accused by Stalin of collaboration with Nazis. So the percentage of Tatars in Crimea doesn’t reflect the importance of this group in the history of the region. The wide majority of Russians can be considered obvious: the region belonged to Russia till 1954, when it was donated to Kiev by Khrushchev in occasion of the 300th anniversary of Ukraine becoming a part of the Russian Empire. 

Regarding the economy, Crimea is a quite poor territory: the most important sectors are tourism and agriculture, but the region is reach of natural gas. The GDP per capita is around the 66% lower of the average in Ukraine and the 80% of the Russian one. Some sources estimate that the economy of the region depends for the 75% directly from the Government of Kiev. 

Crimea doesn’t seem attractive enough to justify the interest of Russia. The economy in quite modest and about the population, there are larger Russian communities in Countries like Kazakhstan (4 million), Belarus ( 1,2 millions) and in Ukraine itself there are 8 millions of Russians.

So why is Crimea so strategic for Russia? There are at least two reasons: one military and one energetic. 

Sebastopol hosts the main military base of the Russian Navy in the Black See (and consequently in the Mediterranean). Russia has two other basis, Novorossiysk and Temryuk, but the deep waters of Sebastopol and the better position explains why Russia has assigned on Crimea the development of its navy. Moscow also has built port infrastructures ex novo: the lost of this region could represent the inability to use its navy in that area and also huge investments for the construction of new basis. 

Moreover, there is an energetic reason that makes Crimea so important: there are two pipelines crossing the Black Sea, the Blue Stream from Russia to Turkey and the South Stream from Russia to Europe. The control of the Black Sea means also the protection of two important energetic lines.

Finally, it is clear why Russia wants to get Crimea. I think it will be more difficult to comprehend if Moscow will be able to face the political and especially the economical sanctions of the International Community, while someone has estimated the annexation of Crimea for the Kremlin economy will cost around 3 billions of dollars per year.

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