Moscow pumps $485m into Crimean Government

Armed forces have been patrolling the streets in Crimea, even when they aren't necessarily needed. Photo / AP

Moscow extended US$415 million ($485 million) in assistance to the Crimean Government yesterday, in what is likely to be the first of many subsidies to the region that voted to become a part of Russia on Sunday.

Cut off from mainland Ukraine, impoverished by a lack of industry and heavily dependent on seasonal tourism, Crimea may struggle to survive without assistance from Kiev.

Many of those who voted for unification with Russia expressed frustration at what they see as two decades of political and economic neglect by Kiev.

"With Russia, things will be better. We want to live like humans," said one yes-voter in Simferopol who declined to give his name.

As Moscow is already finding, meeting those expectations may prove expensive. And many Crimeans may be disappointed.

The peninsula is heavily dependent on Ukraine for its budget - about 70 per cent, according to some estimates - and for its utilities.

About 80 per cent of Crimea's water and 90 per cent of its electricity is piped in from mainland Ukraine over the narrow neck of land where Russian forces have already established their new border.

Despite speculation, Kiev has refrained from turning off either tap, probably because the country itself is similarly dependent on Russian gas.

Sergei Aksyonov, the pro-Russian Crimean Prime Minister, has promised to replace the Ukrainain currency, the hryvnia, with the Russian rouble by next month.

But no official exchange rate has been set and there are already difficulties with some banks short of cash and many businesses finding themselves unable to accept credit card payments.

Much will depend on Moscow's generosity, which can be capricious.