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Business on hold: Crimean entrepreneurs tell their stories

0 17 March 2014

Crimea has been in limbo for weeks now, and it remains to be seen what will happen after the region voted to join the Russian Federation yesterday. The US has threatened Russia with sanctions, including potential economic isolation, and the other seven G8 countries have halted preparations for the G8 summit in Sochi. The threat of war in Ukraine has caused the euro and dollar exchange rates to rise sharply against the ruble. Protracted diplomatic negotiations have begun, with not just the future of Crimea on the table, but also that of eastern Ukraine. 

In the run up to the referendum online business journal Hopes and Fears asked some Crimea-based entrepreneurs about what impact the ongoing crisis was having on their businesses. 

Igor Petrov

Co-owner of startup-accelerator Ant.Lab

Our business is based in Simferopol and Sevastopol and attracts people involved in IT projects. We have links with various investors, some of whom are Russian – we are on friendly terms with several Moscow-based investment funds. But at the moment all work is at a standstill. 

Every business with an intellectual basis is paralysed – it’s impossible to think in the midst of this situation. People are too busy dealing with their personal problems. Many people are afraid – nobody wants soldiers with machine guns in the streets. Nobody knows what their orders are. If a crowd forms will they start shooting?

We only just opened an office in Simferopol. Luckily, the events in the Crimea started when we were still looking over the rental contracts for a premises, so we don’t have to pay rent and that means we haven’t suffered too heavy losses. 

Someone I know has an online store selling goods throughout Ukraine and in Russia. Last month she had three orders, but subsequently two of them were cancelled. Before, her orders were always in the tens.  

There are a huge number of people living in Crimea who are happy that the Russians have arrived. The roots of this support are economic. Their living conditions have got worse, in the most part because of Yanukovich shamelessly robbing the country. Now they are putting their hope in Russia. 

Those who don’t listen to Dmitri Kiselev and don’t watch “Russia 24” understand everything. But there are people who don’t speak Ukrainian and only watch the Russian channels. They believe that Russia will bring money here, and give the people of Crimea everything they could possibly want. They think it will bring them a happy, prosperous life, but miracles don’t happen. 

Sergei Bozhenko

Founder of

Our main office is in Crimea – I’m here now. Our department in Crimea serves the whole of Ukraine, whereas our office in Kiev only operates there. Our business is essentially at a standstill – our capacity has fallen by 80%. 

In Crimea, understandably, everyone is worried. Instead of doing business, throughout Ukraine people are thinking about how to keep their families safe. 

Nobody believes that the Russian troops will just leave. They will stay here, but in what capacity no one knows. If Crimea ands up becoming part of Russia, then Russia will ask for more of Ukraine as well. Crimea will most likely become a quasi-state, like Transdniestria or Abkhazia, and then business here will be impossible. We’ll be cut off from doing business with the whole of Ukraine if that happens, so we are thinking about where to move to away from Crimea.

Crimea relies on tourism and agriculture. If the situation continues, there won’t be any resorts, because Ukrainians won’t come here anymore, and now the Russians have a beautiful new resort in Sochi. Agriculture here would be impossible without water from the Dneiper, brought here by the North Crimean Canal. Who knows if Ukraine will want to give water to Crimea? 

We still don’t know what to do. We are having discussions, working through different options. All the money that we have made in Ukraine has been put into franchises around the world, in Russia, Bulgaria, Kazakhstan, Belarus. We planned to add the Czech Republic to that list, and then to move further into Europe. Now that our main business in the Ukraine is out of action, all these developments are impossible. 

Sergei Khodunov

Owner of “Zhar-Pizza” pizzeria

Tensions here rose sharply when the Russian troops entered. At the moment there are a lot of people both for and against the intervention. And, to be honest, there is a war of information going on – Crimea is completely blocked off, they are only showing our local channel. We don’t even understand the point of the conflict ourselves. 

Business is business, but at the moment I am much more concerned with my children’s futures. I don’t want war to break out between the two states, and I don’t want civil war either. In my opinion the Russian troops should leave Crimea, and the actions of the neo-nazis in Kiev should be stopped as well. I support the idea that Crimea should be federal republic. I think that Crimea should be granted greater autonomy. 

The tourist season has already been disrupted; in fact there simply won’t be one. The people who come here spend money during the tourist season, but the people who live here are here all year round, and if they don’t have money then neither will I. In principal I should close the pizzeria, put the employees onto unemployment benefits, and head off to the job centre. I’ll end up having to get a shovel, start working the land, and ensure my existence that way.

Source: Hopes and Fears

Top image via Shutterstock

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