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Russian PM visits Crimea as some Russian troops withdraw from Ukraine border

  • Crimea Medvedev_Leff (1).jpg

    March 31, 2014 - Russian Prime Minister Dmitry speaks at a meeting for the economic development of Crimea in Simferopol, Crimea. Medvedev is visiting Crimea to consider priorities for its economic development following the Russian takeover. (AP)

  • Crimea Medvedev_Cham.jpg

    March 31, 2014: Russian Prime Minister Dmitry Medvedev, third right, smiles while visiting a city children's hospital in Simferopol, Crimea. (AP Photo/RIA-Novosti, Alexander Astafyev, Government Press Service)

Russia’s prime minister made a surprise visit to Crimea Monday to ease worry over economic problems in the region, as Russia withdrew some of its troops stationed near the Ukrainian border.

Russian Prime Minister Dmitry Medvedev promised to quickly pour funds into the newly annexed peninsula so residents see positive changes after the Russian takeover.

Medvedev, who led a delegation of Cabinet ministers to Crimea, pledged that Russia will quickly boost salaries and pensions there and pour in resources to improve education, health care and local infrastructure. A special government ministry has been created to oversee Crimea's development.

Meanwhile, the Russian Foreign Ministry said one motorized infantry battalion is withdrawing from a region near Ukrainian’s eastern border, Reuters reported, citing Russian state news agencies.

The U.S. reacted cautiously to the move, with Defense Secretary Chuck Hagel saying that "tens of thousands" of Russian troops still remained along the Ukrainian border. He called that "a tremendous buildup."

A battalion consists of about 500 troops.

The new government in Ukraine said the action was confusing, at best, and possibly disingenuous.

"We have information that Russia is carrying out incomprehensible maneuvers on the border with Ukraine," Ukrainian Foreign Ministry spokesman Yevgen Perebyinis said. "Troops in some places are moving backward, some of them are moving forward. Which is why, obviously, we are worried by these movements of armed forces. We have no clear explanation from the Russian side about the aim of these movements."

Secretary of State John Kerry said during diplomacy talks Sunday that progress on resolving the crisis over Ukraine depended on a troop pullback from the border.

Russia's takeover of Crimea, a strategic region on the Black Sea, its troop building on Ukraine's borders and its attempts to compel constitutional changes in Ukraine have markedly raised tensions with the West and prompted fears that Moscow intends to invade other areas of Ukraine. The concerns were stoked by the large numbers of troops Russia had along the Ukrainian border for what Moscow said were military exercises.

Russian President Vladimir Putin told German Chancellor Angela Merkel in a Monday phone call that some troops were being withdrawn, Merkel's office said.

Alexander Rozmaznin, deputy chief of the Ukrainian armed forces command center, confirmed a drop in Russian troop numbers along the border.

In Washington, the State Department remained watchful. "If reports that Russia is removing some troops from the border region are accurate, it would be a welcome preliminary step," agency spokeswoman Jen Psaki said.

Russia annexed Crimea from Ukraine in March 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.

Russian Prime Minister Medvedev led a Russian government meeting Monday, attended by Crimean leaders and outlined moves to revive the region's struggling economy. He made televised remarks at the meeting while sitting at a large desk flanked with Russian flags.

``Our aim is to make the peninsula as attractive as possible to investors, so that it can generate sufficient income for its own development. There are opportunities for this - we have taken everything into consideration,'' Medvedev said, according to Reuters.

"People in Crimea mustn't lose anything after joining Russia, they must only make gains," Medvedev continued. "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. He pledged Russia will increase wages for some 140,000 state workers in Crimea, boost pensions, protect energy links with the peninsula and improve its roads, railways and airports.

Medvedev also said Russia will encourage tourism and try to ensure that air tickets are cheap enough to encourage more Russians to visit. "We must create a new investment history for Crimea, which will be more successful than what it has been," Medvedev said.

The need to ensure a stable power supply was a main focus Monday. Crimea currently gets about 80 percent 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.

The region has an estimated 55 billion ruble (about $1.5 billion) budget deficit, and the peninsula has been dependent on Ukraine for 85 percent of its electricity, 90 percent of its drinking water and much of its food. The reliability of those supplies is now in question, Reuters reported.

Making no mistake about Russia's view of the strategic peninsula, Deputy Prime Minister Dmitry Rogozin tweeted a photo of himself upon arrival in Crimea with the words "Crimea is ours, and that's that."

The U.S. and the European Union have slapped travel bans and asset freezes on members of Russian President Vladimir Putin's inner circle for the annexation and warned that Russia will face even more painful sanctions if it tries to invade eastern Ukraine.

Russia could launch a national card payment system in the next six months after adjusting legislation, the chief executive of Russia's top lender Sberbank told President Vladimir Putin Monday. Russian officials said last week they would develop Russia's own credit card system to reduce reliance on Visa and Mastercard after the Western firms placed restrictions on Russian banks in connection with U.S. sanctions.

Russia has pushed for Ukraine to become a federation where regions would have broad powers -- a clear attempt to preserve its leverage there by relying on Russian-speaking regions in the east and south. The U.S. says it's up to the Ukrainians to determine the structure of their government and Ukraine's new government has rejected Moscow's push for federalization.

The Associated Press and Reuters contributed to this report.