The Russian government is pushing for tourism investment into the northern Caucasus, believing the economic benefits of the 2014 Winter Olympics in nearby Sochi could be extended to the region known largely to the world as the site of the bitter Chechnya conflict.
“North Caucasus is a very depressed region economically, as everyone knows. But it is close to Sochi – 20 minutes by helicopter – and if we can create jobs in the region, it will improve the situation greatly. The experience around the world is that the tourism industry creates jobs. In France there are 59 million tourists coming just to the ski resorts,” said Akhmed Bilalov, vice-president of the Russian Olympic Committee and chairman of the North Caucasus Resorts Company, which plans to build five ski resorts in the region. He spoke to fDi Magazine at the extravagant north Caucasus stand at the Mipim 2011 exhibition in Cannes, complete with snowy photo-session backdrop.
A popular vacation spot during Soviet times, the Caucasus has since become notorious for violence and lawlessness. The hope is that it can be restyled as both a winter and summer resort area after the Winter Olympics in 2014. Promoters point out that the Caucasus has reliable snowfall lasting 240 days in places, and its mountains are higher than the Alps. The domestic tourism market they hope to capitalise on is large, estimated at 20 million, although only 1% of Russians can ski.
As part of a $15bn regeneration scheme, the Russian government is putting $2bn into infrastructure in the area, according to Mr Bilalov and financing for the tourism projects will be arranged through Russian banks. This includes $1.6bn in state guarantees for investors. There is talk of creating a special economic zone that would offer 10-year tax holidays to investors, but this has not yet been confirmed.
Certainly investors will need some enticements and guarantees before looking too seriously at the war-ravaged region. But Mr Bilalov said that perceptions of security risk are highly relative, and ever shifting. “No place today has total safety – not even Davos, and there are security problems in the US, UK, France, all the major tourist destinations,” he said. “Events in north Africa have recreated the security map. In this context, Russia is one of the most stable places in the world.”