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.
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.
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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.