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Geographic and Strategic Importance of Crimea

Posted by Larry Doyle on March 4, 2014 7:06 AM |

With all eyes in the markets, if not the world, focused on the ongoing crisis developing in the Ukraine and its southern peninsula known as Crimea, let’s navigate and gain a greater understanding as to the geographic, economic, and political importance of this region.

Crimea is a short, 2 hour plus flight from Moscow or perhaps a half day ride given that it is approximately 850 miles/1400 km due south. More importantly than the proximity of Crimea to Moscow is its geographic location. 

A brief view of this visual depicts the strategic importance of the region located right on the Black Sea and as a doorway into Russia.

From: Moscow, Russia To: Crimea, Ukraine

The immediate thoughts that come to mind when I look at this map are a mix of the Panama Canal and Miami Beach, Florida.

Is it any surprise that Russian President Vladimir Putin has occupied this region given its strategic importance? The question now begs what does the western world do and how will this standoff play out? Is it possible that Crimea will be annexed by Russia? I think it is more than possible. I would bet that it is likely.

It would seem that there is a little chill in the air and a “cold war” is unfolding. The accompanying political risks of retreating to focus more on domestic issues are increasing for our current administration. The market risks are also increasing for investors. Both factors strike me as further reason for our Federal Reserve and foreign central banks to remain accommodating in terms of providing liquidity to the markets and the global economy.

Navigate accordingly.

Larry Doyle

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The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • This commentary in The New York Times, Crimean Officials Claim to Secure Peninsula, would seem to indicate that Ukraine can kiss this peninsula good-bye. http://www.nytimes.com/2014/03/05/world/europe/crimea-ukraine-russia.html?hp&_r=0

  • KD

    LD….. 2300 miles …. a day long ride…..remind me to buckle my seat belt if you are driving!

    • KD,

      HAHAHA….brain cramp on my part and nice catch on yours. 90 miles per hour for 24 hours straight would equate to about 2300 miles. That makes me think of this scene from a classic movie http://youtu.be/toeMce61CkE or a mental image of a best man back in ’87 trying to “get to the church on time’.

      Can’t make this stuff up.

      Thanks for the prompt. It is more like 850-900 miles from Moscow to Crimea. All the more reason why Vladimir might want to keep it. Plus there is probably some good beach volleyball played there. .

  • By VLADIMIR ISACHENKOV

    MOSCOW (AP) — In some ways, the venue Vladimir Putin chose and the emotional lecture he gave the world about Russia’s actions in Ukraine said it all.

    In an hour-long chat with a handful of Kremlin pool reporters at his presidential residence, Putin sat in an easy chair and spoke with the bravado of an ex-KGB agent suspicious of Western plots.

    Wagging his finger at the reporters, the defiant leader dismissed the threat of U.S. and European Union sanctions, alleged that “rampaging neo-Nazis” dominate Ukraine’s capital, and said the Russian and Ukrainian soldiers locked in a standoff in Crimea are actually “brothers in arms.” A look at Putin’s appearance and what it says about the crisis and him.

    STANDING TOUGH

    Putin has long been famous for his cool public demeanor at public appearances that often are carefully stage managed.

    But during Tuesday’s news conference – which was televised live across Russia – he made it clear that he takes the Ukraine crisis personally.

    He accepted questions from the reporters about the threat of war in Ukraine, the Russian military takeover of the country’s Crimean Peninsula, and the looming Western sanctions.

    But he batted them away with his usual mix of disdainful sarcasm and political arguments in a rapid-fire delivery. When someone’s cellphone rang in the middle of live broadcast, something that reportedly makes him mad, Putin paused then continued his speech.

    Putin’s performance seemed to reflect his genuine anger about what he sees as the West’s hypocrisy and its heavy-handed involvement in Ukrainian affairs.

    His remarks also showed what many observers have spotted: his deep involvement and strong personal feelings about the Ukrainian crisis, which he blames on the West.

    He also seems to see Ukraine as a defining moment of his 14-year rule and a key turning point for post-Cold War Europe.

    PUTIN’S RATIONALE

    Putin acknowledged that the Ukrainians who rallied against their president, Viktor Yanukovych, were driven by anger against corruption and nepotism in his government. But Putin said the nation’s new government is merely “replacing some cheats with others.”

    He denounced the ouster of Yanukovych as an “unconstitutional coup and armed seizure of power.” Putin claimed that the radical nationalists wearing swastika-like bands had come to control Kiev, and alleged that the snipers who shot and killed scores of people during the protesters were provocateurs, not government soldiers.

    “Armed, masked militants are roaming around Kiev,” he said. Asked if Russia would recognize the outcome of Ukraine’s election set for May, he said, “We will not if such terror continues.”

    He insisted that Yanukovych, who fled to Russia, remains the only legitimate leader of Ukraine. But he also spoke about Yanukovych with disdain, saying he has failed in his presidential duties.

    U.S.-TRAINED RADICALS

    Putin accused the West of staging the massive protests in the Ukrainian capital in order to reduce Russia’s clout there. He claimed that radical demonstrators involved in violent clashes with police in Kiev were trained by Western instructors.

    “I have a feeling that they sit somewhere in a lab in America over a big puddle and conduct experiments, as if with rats, without understanding the consequences of what they are doing,” he said.

    He said the ouster of Yanukovych hours after he had signed a deal to surrender much of his power and hold early elections has plunged Ukraine into chaos and put it on the verge of breakup.

    “READY TO USE ALL MEANS”

    Putin said that “we reserve the right to use all means we have” to protect Russian speakers in eastern Ukraine from violent Ukrainian nationalists. But he added that he hopes there will be no need for sending Russian troops there.

    “We don’t want to enslave anyone or dictate anything,” he said. “But we won’t be able to stay aside, if we see them being hunted down, destroyed and harassed.”

    He made it clear that Russia doesn’t see the Ukrainian military as a serious adversary, saying that the Russian and the Ukrainian soldiers are “brothers in arms” who will stand “on one side of the barricades.”

    He said that weeklong war games in western Russian that involved 150,000 troops, hundreds of tanks and dozens of combat jets, had been planned earlier and weren’t linked to the developments in Ukraine, adding that he ordered them back to their bases.

    STANDOFF IN CRIMEA

    Putin says that Russian forces in Ukraine’s strategic region of Crimea, which hosts a major Russian naval base, have beefed up security to fend off threats from Ukrainian nationalists. He denied that the troops, who have overtaken Ukrainian military bases across Crimea, were Russian and described them as local “self-defense forces.”

    Putin said that Moscow has no intention to annex Crimea. At the same time, he strongly supported a local referendum on Crimea’s status, saying that people there have the right to determine their fate.

    TURNING TABLE ON THE WEST

    Putin rejected Western accusations of Russian aggression against Ukraine, saying the U.S. should know better, given what it has done.

    “We have to remind them about the U.S. action in Iraq, Afghanistan and Libya, where they acted without any sanction of the United Nations Security Council, or wilfully interpreted its resolution as in the case of Libya,” he said. “Our partners, particularly in the United States, always clearly formulate their geopolitical and state interests and aggressively pursue them. They try to pull the rest of the world under them and start hitting those who put up resistance, eventually finishing them off, as a rule.”

    He did not mention that the Soviet Union invaded Afghanistan in December 1979, starting a war that lasted for nearly a decade and precipitated the collapse of the Soviet Union.

    THINK TWICE ABOUT SANCTIONS

    Putin has shrugged off Western threats to impose political and economic sanctions against Russia over its actions in Ukraine, saying that they will backfire against the West.

    “In the modern world, where everything is linked and everyone depends on others in one way or another, we can incur damage to one another, but it would be mutual damage,” he said.

    Asked about the possibility that members of the Group of Eight will not show up at its summit scheduled in Sochi in June, he said: “If they don’t want to come, it’s OK.”






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