Crimean Parliament adopts Russian-backed constitution

As the Russian euphoria from reclaiming Crimea begins to ease, new tensions are emerging. Crimea, for all its historical significance to the borders of old Russian empires, will require a great deal of funds to prop up, according to the Washington Post. The Russian economy is not doing well, with  capital flight rising to nearly $64 billion in the first three months of this year, and with the added burden of Crimea, it is unclear where Russia will secure the funds necessary to support candidates, cement borders, and keep aid flowing.

As for the transition within Crimea, the Parliament recently adopted a Kremlin backed constitution, taking yet another step to reabsorption into Russia despite the strong objections of the ethnic Tatar minority. As these moves have continued, the US has doubled down on its largely symbolic sanctions of a few weeks ago and imposed new ones on the Crimean-based gas company Chernomoneftegaz, blocking Gazprom’s bid for a controlling stake in the company.

These mark the third round of sanctions since the crisis erupted. Business leaders and government officials are concerned by the heightening rhetoric (with comparisons made to the height of the Cold War).

News Briefs:

  • Thus far, no candidate has won an outright majority in the Afghan election. This news, while expected, means that the election will proceed to runoffs to cement one candidate’s majority. The partial vote count, released yesterday, includes 7% of the results from 26 of the country’s 34 provinces. Abdullah Abdullah and Ashraf Ghani appear to be the prime candidates for the runoff. Ghani’s estimate share is 37.6% while Abduallah Abdullah received 41.9%. Zalmay Rassoul, inititally considered a frontrunner, came in a distant third, with 9.8%.
  • The IMF has released a report on the recent performance of Iran’s economy and its outlook. According to the report, Iran’s economy shrank by 1.7% in 2013, the second straight year of overall contraction since sweeping economic sanctions were imposed by Western powers. However, the IMF projects that Iran’s economy will rebound by 1.5% in the current year due to the relief from sanctions. Masood Ahmed, the IMF’s Middle East and Central Asia director, said that Iran’s economic woes were “beginning to level off.”
  • US Chairman of House Foreign Affairs Committee Ed Royce will lead a small delegation to Ukraine, Armenia, and Azerbaijan during the two-week recess of Congress. In an email sent out by his staff, he declared that “the US should do what we can to bolster [Ukraine’s] government against Russian aggression. [Armenia] is a country struggling to build democracy and prosperity…. This was the first genocide of the past century and must be remembered. The US has strong energy and regional security interests in Azerbaijan.”
  • The Iran-Pakistan pipeline’s prospects for completion are looking worse than ever. As we reported earlier, Saudi Arabia recently gave $1.5 billion to Pakistan, a surprising move from a country that consistently refuses to give credit for oil imports. The United States has also been putting pressure on Pakistan to abandon the project, and the Saudi “gift” was ostensibly aimed at persuading Pakistan to sell weapons to Riyadh that would be sent to rebel groups fighting Bashar-al-Assad in Syria.
  • Gazprom will buy a 100% stake in KyrgyzGazProm, the Kyrgyz state-run oil and gas firm. CEO Alexei Miller stated that that access to KyrgyzGazProm will allow Gazprom to develop the Kyrgyz market and assist in economic development. In perhaps related news, the Asian Development Bank projected that Kyrgyzstan’s GDP will increase 6.5% this year and an additional 5.5% in 2015, an excellent growth estimate for the struggling economy.

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