Inscribed on the UNESCO World Heritage List in 1999, the Western Caucasus site has what the UN agency calls “a remarkable diversity of geology, ecosystems and species. It is of global significance as a center of plant diversity, containing extensive tracts of undisturbed mountain forests unique on the European scale.”
The World Heritage site is at the far western end of the Greater Caucasus Mountains within Krasnodar Kray and the republics of Adygea and Karachevo-Cherkessia.
The Western Caucasus World Heritage Site has 60 mammal species, including wolf, bear, lynx, wild boar, Caucasian deer, tur, chamois, and reintroduced European bison, which are globally endangered. There are 246 bird species, including many found nowhere else, of which 24 are nationally threatened and 24 globally threatened.
The ski resorts project has been named Altitude 5642, for the height of Elbrus, the highest mountain in the Caucasus.
Project Altitude 5642 developer, North Caucasus Resorts, plans five mountain ski resorts:
- Lagonaki (Krasnodar Territory, the Republic of Adygea) – this location would impact the World Heritage site
- Arkhyz (Karachay-Cherkessia)
- Elbrus-Bezengi (Kabardino-Balkaria)
- Mamison (Republic of North Ossetia – Alania)
- Matlas (Republic of Dagestan)
Oother 4 projects and their economic impact Russia’s tourism investments in the North Caucasus
Mount Fisht is located in the Western Caucasus mountains, in the republic of Adygea. It has an altitude of 2867 meters (9400 feet).
The North Caucasus (Adygea, Kabardino-Balkaria, Karachay-Cherkessia, Dagestan, Chechnya, Ingushetia) is the poorest region of Russia. It has the highest youth population and also the highest unemployment rate.
The official statistics for unemployment vary slightly from one republic to another, and many hold temporary jobs leaving them with an insecure future. More than half of the incomes are below the poverty line, and in case of temporary jobs – employees have often trouble receiving payments on time.
The republics survive on subsidies from the federal budget allocated by Moscow (which controls the management and exploitation of all natural resources in the area). The centralized allocation of tax revenues to Moscow restricts regional growth.
The infrastructure is lacking: water, electricity, natural gas. Due to increased poverty, corruption is rife, making it hard for the population to access services without offering bribe. Certain regions in Chechnya are still heavily land-mined, making it not only dangerous but also blocking rural populations from fending for themselves through agriculture. No international mine-clearing experts have been allowed in since the end of the second war.
Rich in natural resources
The North Caucasus region is one of the oldest hydrocarbon-producing areas of the Former Soviet Union, production having begun since mid-XIX century. In 1864, after winning the Russian-Circassian war, Russia opened the first oil refinery in Krasnodar-Krai (which had been part of Circassia).
Today, Russia ranks third in the world in oil production after Saudi Arabia and the United States. The North Caucasus is a key hydrocarbon energy distribution network that sustains much of Europe (including major states like Germany which affects their political relations).
In 2012, Vladimir Putin declared that Russia’s key goal was to maintain its position as one of the world’s largest oil producers. The aim is to maintain annual output at around 505 million tons over the coming years, and increase it to 535 million tons by 2030.
Chechnya’s “known” hydrocarbon reserves are estimated at 350 million tons of oil and 67 billion cubic metres of natural gas. In 2011 alone, Rosneft’s (Russian state company) pumped 800,000 tons of oil from the Chechen republic.
In 2006, the chairman of the Chechen People’s Assembly declared that Rosneft gains about 600 million dollars from selling oil produced in Chechnya, while Chechnya’s budget gets no more than 1 million dollars.(source)
In recent months, Chechen Republic head Ramzan Kadyrov has repeatedly criticized Rosneft for not paying taxes in Chechnya and for “not allowing us to develop our oil and gas industry.”
“Gazeta” (Russian newspaper) argued that “passing over oil-drilling license to Chechnya will let the Chechen administration control production and cash flow. This means that Chechnya would have serious political tools. Moscow will never agree to it.”
Dagestan provides additional free access to the Caspian Sea. Geologists estimate – 161 million tons of oil and gas condensate reserves (10.4 million have already been explored) and up to 155 billion cubic meters of natural gas.
Three pipelines pass through it: the Baku-Novorossiysk oil pipeline (274 km), Mozdok-Kazimagomed (297 km) and Makat-North Caucasus (129.4 km) gas pipelines.
Besides oil and gas, Dagestan has considerable deposits of brown coal, oil shale, peat, sulphide, iodine and bromine, carbon dioxide and abundant siliceous and ferrous deposits.
Lukoil is expected to develop the North Caspian production capacity to 320 kbd of oil and 13 billion cubic meters of natural gas per year by 2020. Lukoil expects that the increase in production will be able to offset declines that are anticipated from Western Siberia by that time.
The Siberian oil fields are set to be depleted by 2020. Has Siberia had enough of Russia?
History of oil exploitation in the Caucasus
The production of the northern Caucasus increased from 100,000 poods in 1877 to 1,656,000 poods in 1889. Note: poods were the early Russian measure of production and that there are 8.33 poods per barrel.
In 1884 – 1914 Georgia exported a total of around 165 million barrels of oil of oil. The oil came from Grozny (Chechnya) and Maykop (Adygea), even though there were considerable (and yet unexploited) oil reserves in Georgia.
The oil fields around Grozny were first developed in 1893, with 386 wells by 1917 which grew steadily. After the 1990’s war destruction, only 100 operating oil wells had survived out of 1500 oil wells in and around Grozny.
Recently, Lukoil (Russian company) carried out a series of explorations which uncovered numerous new oil/ gas reserves in Dagestan’s Caspian Sea and Chechnya.
Main oil refineries: Maykop (Adygea), Grozny (Chechnya), Guria (Georgia), Caspian Sea (Dagestan)
In 2013, the Russian government ordered that the governors in Dagestan, Ingushetia, North Ossetia and Kabardino-Balkaria be appointed instead of being directly elected. By compromising democracy, Moscow incites a hostile unstable climate in the region.
Promises of industrial investments have been made in order to “alleviate poverty” in the region. A $15 billion tourist development plan was established in 2011 to “stem terrorism”.
The profit results from the exploitation of local resources is greater than the investments of companies or the federal budget allocated by Moscow. The Caucasus ski resorts plan will not alleviate the situation since specialized personnel is being brought from major Russian cities and profits redirected to major Russian tourist companies instead of local businesses (read more – Russia’s tourism investments in the North Caucasus).
Tourism investments, Sochi Olympics and oil
Russia is running out of resources due to lack of alternative extraction methods and modern technologies. Though North Caucasus has large unexplored resources, it risks resource depletion like Siberia.
The Sochi Olympics and the ski resort plans are part of a plan to make Caucasus a tourist attraction and give it a “investment-friendly” face. Russia brings up Israel as example of how a country can flourish in a war atmosphere.
Life in rural Abkhazia – a presumably “independent” breakaway state of Georgia, which is under Russian defacto control.
Life in rural Chechnya
Next to poverty, the people of Chechnya are confronted with the consequences of two wars which killed over 100.000 people and destroyed villages and towns. Civilians live with fear of arbitrary arrest or kidnap by authorities (see Forced disappearances – crime against humanity)
Myahdi (widower, father of 3) who participates in the documentary, was arrested in a market later on.
The rebuilding efforts have concentrated in central Grozny. People whose houses have been destroyed still live stranded in dire conditions. See more below (latter part of the report)
Ingushetia has the highest unemployment rate in North Caucasus. On top of poverty, it is also one of the most unsafe regions.
The news report below analyzes the general atmosphere in which people live every day, marked by constant fear.
Lago-Naki plateau is located at 2.200 meters altitude, in the eastern part of Adygea (and western part of neighboring Krasnodar-Krai).
70 millions of years ago, Lago-Naki plateau was the bottom of Tethys Ocean.
Lagonaki is listed as UNESCO World Heritage site, still the Russian authorities have approved plans for a ski resort in Lagonaki, which will negatively impact the pristine environment. Russia Allows Ski Resort in Caucasus World Heritage Site
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.
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.
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.
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.
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.”
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.
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.
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)
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.
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.
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
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.