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Russia’s tourism investments in the North Caucasus

sources: New York Times, Rossiyskaya Gazeta

Mount Elbrus highest mountains in europe Great North Caucasus  mountains beautiful landscape scenery

Mount Elbrus, the highest peak of Europe

At the World Economic Forum of 2011, Russian president Dmitry Medvedev presented a huge-scale investment in North Caucasus – a $15 billion project to put a European-style ski area in each of the 7 republics of the North Caucasus.

According to official statistics from the Russian National Tourist Office, 90% of the tourists in North Caucasus republics are Russians. In 2011, when the $15 billion project was adopted, the Russian authorities were hoping to rise the popularity of the region and also attract (and double) the number of foreign tourists.The Northern Caucasus Resorts company (see their website here) promised that Russia’s complex visa procedures will be streamlined to make it easier for European skiers.

Davos 2011 Video presentation of the project for the World Economic Forum

 

The 2014 Sochi Olympics were meant to achieve this purpose, but given the current circumstances in Crimea and the unsure prospects of future military actions, tourism in Russia is being anything but encouraged.

However,  the Northern Caucasus Resorts company cites the example of Tel Aviv, where people have learnt to survive in a tense area, and says that the government will protect the tourists, even if that means deploying metal detectors on ski lifts and fencing off the resorts.

North Caucasus ski resorts mountains Chechnya Ingushetia Dagestan kabardino Karachay

There are very few, if any, world-class ski resorts in Russia. Russia is a flat country for the most part, and the only other mountainous regions are located far off in Eastern Russia. The North Caucasus with its impressive mountains peaks (highest of Europe), its gentle climate ( it’s the warmest part of Russia) and its relatively convenient location (close proximity to Europe) – makes it all an attractive location for Russia’s world-class money-making ski resorts.

According to them, the development of an enormous infrastructure is a strategy to break the cycle of poverty and violence. North Caucasus has an unemployment rate of over 50% and a weak infrastructure, if any.

The question is – will the money really flow into the local communities and benefit the severely impoverished population?

The following are a few of the projects being developed in the Caucasian republics.

KARACHAY-CHERKESSIA

A Russian company opened a small portion of its resort near the dilapidated village of Arkhyz as a test site, advertising a bunny slope, a chairlift and a gondola imported from France, along with plans to install another gondola and open7 ski runs next season.

Arkhyz valley in the Caucasus mountains

Arkhyz valley in the Caucasus mountains

 

A Russian magnate who won a large government contract for the Games in Sochi and will help coordinate preparations for the 2018 World Cup has built 2 modern hotels — called Romantik-1 and Romantik-2 — along the slopes.

Despite the flow of government money, people in town say they have seen little, if any, trickle-down effect.

 For now, said Pavel Vedentsov, a 25-year-old transplant from St. Petersburg who manages the mountain staff members and ski patrol, skiers will have to content themselves with a single trail for beginners that closes at 5 p.m.

“There isn’t much to do at night,” Mr. Vedentsov said. The bars have not yet been built.

Asked about the risk of terrorism in the region, Mr. Vereshchagin conceded that it was a concern but said the danger had been exaggerated. In more violent republics like Dagestan and Chechnya, he said, the company would provide transportation from regional airports directly to the resorts.

Aleksandr Khloponin, the presidential envoy for the North Caucasus, told the editor of a Russian news site in an interview that Russian tourists were not easily intimidated.

“Is it less dangerous in Egypt?” he asked, naming a popular destination for Russian vacationers. “Or in Libya, or on the Moroccan coast? Nothing will scare away one of our tourists.”

Gregory Shvedov, editor of The Caucasian Knot, a regional online news agency, said in an interview that he was skeptical of the returns Northern Caucasus Resorts would bring to local communities.

“If it is all owned by the state, by huge companies based in Moscow, then I don’t see the benefit in this,” Mr. Shvedov said.

He emphasized that increasing minority ownership and integrating small, local businesses into the plan could create thousands of jobs in a new tourism industry. “But are they doing all of this?” he said. “We don’t see it.”

An Arkhyz street vendor. “Just look how great things here are now,” said one vendor. “Does it seem like people are working?”

Neither, it seems, do residents. While the government money started flowing three years ago, they say they have seen little, if any, trickle-down effect.

On a recent day in Arkhyz, just 5 miles from the resort, women were selling handpicked teas and luminescent honeys flavored with mint and barberry, but customers were few and far between.

“Just look how great things here are now,” said Shamshiyat Batasheva, 53, who was offering hand-knit socks for sale. “Does it seem like people are working?”

Residents complained that the workers at the resort had been brought in from outside the region. “Wherever that money is going, it isn’t coming to us,” Ms. Batasheva said. “We can count on that.”

CHECHNYA – Billionaire builds $500 million ski resort

The Veduchi project – with Chechnya’s mountains in the background

2011 interview – Billionaire and businessman Ruslan Baysarov, “close friend” of Chechen leader Ramzan Kadyrov, is building a big hotel complex in Veduchi, along with 20 chalets “in the national architectural style,” 19 ski tracks with varying degrees of difficulty, nine ski lifts and other pleasant tourist facilities — like a spa center or a heated open-air pool.

The Russian company Mostovik is responsible for the construction work.

Regarding the republic’s instability and lack of security, Baysarov says “the head of the region should ensure its security” — the head being his close friend, Ramzan Kadyrov. Kadyrov has been accused by international Human a Rights NGO’s of gross human rights violations, torture and murder against Chechen civilians. He is strongly supported by the Kremlin.

https://i2.wp.com/www.chechentourism.ru/wp-content/uploads/2013/07/proekt-kurorta-chechnya-veduchi-11-1024x682.jpg

Not all residents of the republic are positive to the idea of building a ski resort in Chechnya, noting that the authorities should better concentrate their efforts on restoring the republic’s industrial potentials, not on implementing the projects that can bring profits only to a small group of people.

“After two wars our republic has almost no large enterprises or factories,” said Saikhan T., a resident of Chechnya, who had once worked for one of the local ministries. He also noted the mass unemployment in the republic.

“There’s practically no economy here, but we keep building all these high rise ‘Grozny-City’, ski resorts, recreation centres and the like. People need enterprises, where they can work and earn money, rather than the place where they could spend it. Nobody needs entertainments instead of bread,” said Saikhan.

https://i0.wp.com/bsdg.ru/wp-content/uploads/2014/03/Veduchi.jpg

Note – Chechnya’s  unemployment rate stands at 80%. Corruption is rife, bribes must be paid on every level. Infrastructure (roads, electricity etc) are non-existent is lacking in many areas.

Promotion event for the Veduchi ski resort in 2013 – Russian business people and celebrities were also invited to the event. (source: RIA Novosti)

The ceremony ended with colorful fireworks.

DAGESTAN

Northern Caucasus Resorts, the Northern Caucasus resort property company, has said that 1.32 billion Euros will be invested in the construction and development of the Matlas ski resort in the Republic of Dagestan as part of the North Caucasian tourist cluster project, according to Interfax.

Dagestan Matlas resort project North Caucasus mountains

The sum will cover the construction of internal and external transportation lanes, resorts and ski slope development.

The resort will be able to accommodate 9,900 visitors. Four 5-star, six 4-star, and ten 3-star hotels, as well as lodges, apartments and a golf centre will be build as part of the project.

Khunzakh plateau Matlas dagestan

Khunzakh plateau near Matlas dagestan

ADYGEA

Lago-Naki, Adygea (The Caucasian Biosphere Reserve) which will be negatively impacted by the new projects (click on photo to see more)

Lago-Naki, Adygea (The Caucasian Biosphere Reserve) which will be negatively impacted by the new projects (click on photo to see more)

 

February 3, 2012 (ENS) – The Russian government is preparing to allow construction of a cluster of ski resorts and roads in the Caucasus region that will alter one of Europe’s few untouched mountain wilderness areas. The development is expected to impact two biosphere nature reserves, two national parks, wildlife sanctuaries and a World Heritage Site.

Previously, the construction of tourist infrastructure in protected areas has been either illegal or restricted by Russian federal environmental laws.

Read more here Russia Allows Ski Resort in Caucasus World Heritage Site

CONCLUSION

North Caucasus – a region with high tourism potential, which could offer a window out of the poverty that’s ravaging the region and feeding the social and political instability. But, just like in the oil business (an abundant resource in the region), any profit will most likely never benefit its residents.

Experienced personnel will be brought from outside (leaving no jobs for locals), all services will be provided within the enclosed resorts (local businesses will not benefit), profits will go to big tourist companies (instead of local communities), and the middle-upper class clients will be living cocooned in their luxury resorts, protected by metal detectors on ski lifts and fenced resorts.

Why is Russia so eager to invest 

North Caucasus has obvious high tourist potential. But there is another major reason for the sudden influx of billions of dollars.

Russia is running out of oil/gas resources due to lack of alternative extraction methods and modern technologies. Though North Caucasus has huge unexplored resources, it risks oil depletion alike Siberia. Russia needs new technologies and foreign investments in order to avoid a future Siberia scenario. But investors are cautious of an insecure war-torn Caucasus.

The Sochi Olympics and the grandiose ski resort plans are part of a plan to make Caucasus attractive to tourists and investors alike, and give it a more “investment-friendly” face. Despite criticism, a very confident Russia constantly brings up Israel as example of how a country can flourish in a war atmosphere.

Razvaliny Koki Vainakh towers North Caucasus mountains Inghusetia

Ingushetia

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