Crimea crisis: Russian Prime Minister Dmitry Medvedev sets economic plan

On a surprise visit to Crimea, Russia's prime minister promised to quickly pour funds into the newly annexed peninsula which he said will become a top tourist destination for Russian vacationers.

Dmitry Medvedev, who led a delegation of Cabinet ministers to Crimea on Monday, pledged that Russia will quickly boost salaries and pensions there and pour in resources to improve education, health care and local infrastructure.

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Russia annexed Crimea from Ukraine earlier this month after a hastily called referendum held just two weeks after Russian forces had overtaken the Black Sea region. Ukraine and the West have rejected the vote.

"People in Crimea mustn't lose anything after joining Russia, they must only make gains," Medvedev said in televised remarks.

"People expect us to create conditions for calm and respectable life, confidence in tomorrow, the feeling of being part of a strong country. We must meet these expectations."

He said the government will create a special economic zone in Crimea, a peninsula of 2 million people, that will create incentives for business with lower taxes and simpler rules.

"We must create a new investment history for Crimea, which will be more successful than what it has been," Medvedev said.

Medvedev also said Russia will seek to develop Crimea as a top tourist destination and will try to ensure that air tickets are cheap enough to encourage more Russians to travel there.

Russia's defence minister, meanwhile, announced Monday that all Crimean men of conscription age will get a deferral from the draft for one year.

Deputy Prime Minister Dmitry Rogozin, part of Medvedev's retinue, tweeted a photo of himself upon arrival in Crimea, with the words "Crimea is ours, and that's that."

Power, water supply issues in Crimea

Medvedev particularly emphasized the need to ensure a stable power supply. Crimea currently gets about 80 per cent of its electricity and a similar share of its water from Ukraine, and power cutoffs last week raised fears that the Ukrainian government could use energy as a weapon to bargain with Russia.

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Medvedev said Russia already has made sure that Crimea has enough backup power capacity to ensure an uninterrupted electricity supply. He added that Russia will work on long-term solutions to Crimea's energy problem that could involve linking the region to Russia's power grid or developing local power generation.

He said efforts will also be made to quickly repair water supply infrastructure to reduce loss of water. In the future, Crimea could get water supplies from Russia or create its own water reservoirs.