Crimea and the city of Sevastopol were formally incorporated into the Russian Federation as individual federation subjects on March 17. Putin then designated the two regions as a separate Crimean Federal District, and named Oleg Belaventsev, a graduate of the Sevastopol Higher Military-Naval Engineering College and long-time associate of Russian Defense Minister Sergei Shoygu, to head it.
A native of the Ukrainian SSR, Kozak worked closely with Putin during the mid-2000s as head of the volatile and economically moribund Southern Federal District. On succeeding Putin as president in 2008, Dmitry Medvedev appointed Kozak a deputy prime minister with the sole responsibility of overseeing and coordinating the construction of the infrastructure for the Sochi Winter Olympic Games.
Kozak is expected to unveil proposals for designating Crimea and Sevastopol a special economic zone at a government session on March 24. According to a study by Institute for National Strategy president Mikhail Remizov summarized by “Nezavisimaya gazeta” on March 21, before the decision to designate the two new federation subjects a separate federal district was made public, the Kremlin is seeking extra-budgetary funds to finance the development of Crimea, either by dipping into financial reserves or by persuading Russian investors to fund specific projects as they funded much of the Sochi infrastructure.
Remizov believes that approach may antagonize local businessmen. He also points out that the two regions are very different in terms of mentality, the structure of their administration, and the composition of their respective elites.
It is as yet unclear how Belaventsev will coordinate his duties with Kozak, who as a deputy prime minister is superior to him in rank.
Nor is it clear whether the designation of Crimea and Sevastopol as a separate federal district is a permanent measure, or whether the two regions may at some future date be subsumed into the North Caucasus Federal District. The future of that federal district is currently in doubt following a media campaign last month directed against Aleksandr Khloponin, who has been its head since it was first created four years ago.
Khloponin’s detractors make the point that he cannot claim the credit for the overall decline in recent years in the level of activity of the North Caucasus insurgency, and that he has failed dismally to improve socio-economic conditions.