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Borders, Energy, and Tourism Flow.

This blog is an opinion article written by ETFI researcher Peter Singleton. The blog aims to shed some light on the connections between borders (especially in Easter Europe) energy (especially gas supplies) and tourism (especially the change in tourism flows to certain destinations). It’s based on an analysis of what is happening now in Ukraine, and what the implications might be for international relations between Russia and the West.

The crisis in Ukraine
There is a lot at stake at the moment. Ukraine has a gas bill to pay in the order of 2,5 billion Euros to the Russians failing which on June 3rd,  the gas supply will be cut.Ukraine refuses to pay up until the price is reduced to its original level charged. The Russians doubled the unit price of gas from the moment the crisis started.Russia at the moment supplies one third of all the gas used by European countries. 50% of that gas is supplied via the pipeline which runs throughUkraine. As for borders, the facts on the ground inUkraine appear to be changing the borders that were internationally recognised. Crimea formerly part of Ukraine, is now part of theRussian Federation.

Are there further border changes in store? Lastly, how does this affect tourism flows? The growing incoming tourism toCrimea is now a thing of the past. It is not clear when or if, this will ever return. Whether that shortfall is compensated by Russian domestic tourism remains to be seen. Certainly there is no doubt that political instability and the relations between countries can determine growth or decline in flows of tourists to different areas of the world. Tourist authorities on both ends of the spectrum will do well to adjust their marketing strategies accordingly.

Russia vs the West
In order to start to analyse the crisis inUkraine and its ramifications, we need to look at the history of relations betweenRussia and the West since the late 1980’s. As the Soviet Union approached economic and ideological collapse back then, the balance of power relationship betweenRussia and theUS as super powers began to disappear too. As the Iron curtain fell, theUS was left standing as the only super power, militarily and economically dominant. As far as the current Russian Government is concerned that domination resulted in exploitation and abuse. The Russians of course are not the only critics of the Americans! In a recent speech President Vladimir Putin accused the Americans of riding roughshod over International Law (for example in the case ofIraq) and using their superiority solely for their own imperial gain.

Putin was making his remarks in response to similar accusations by the American Secretary of State John Kerry. For what will not be the first time, the kettle is calling the pot black. What is significant is that both militarily and economically (largely through the growth of its energy industry)Russiais for the first time since the cold war, challenging the power and influence of theUSin a significant way. Not only that but its clear from his speeches that Putin regards parts of neighbouring countries as part of greater Russia too (as he defines it) and is placing nationalistic concerns over international borders.

If this principle remains the policy of the Russian Federation, then we may see other regions populated by predominantly Russian speaking populations coming under the Russian sphere of influence as a pre curser to possibly being annexed in the same way as theCrimeawas. This process seems to be in full swing at this moment inUkraine, prompting the UN to warn that the window of opportunity for a political solution to the crisis is closing rapidly. As long as the Russian station their army in numbers on the border the pro Russian activists inUkrainewill have little fear of the Ukrainian army.

International Intervention is complicated
What of the principles governing intervention in another states affairs, in this caseRussia andUkraine? What exactly does International Law permit and what does it forbid? Even more important who upholds these laws? The basis for international is contained in the UN charter signed in 1946, and the Security Council of the UN should uphold and enforce the charter. In article 2,7 (signed by the Russians, Americans and a host of other countries) it is stated that a sovereign state will only have the right to protect itself through military action when its own borders are breeched and its own territory is under attack.

The only exceptions to this rule are contained in the so called “Right to Protect” addendum to the Charter which allows for a sovereign state to intervene in cases of humanitarian crisis (e.g. Rwanda is a prime example, yet unfortunately intervention did not happen here) in circumstances where for example a genocide is occurring. Under these circumstances the intervening power has the right to protect an indigenous population from its persecutors, possibly its own government. In the case of Russia and Ukraine the situation is complicated by some historical circumstances. As part of the agreement made with Former Russian leader Khrushchev when Crimea became part of Ukraine, the Russians were allowed to maintain a naval garrison on Crimean soil with a limit of 25 thousand naval personnel.

Russian Foreign Minister Lavrov concedes that Russian troops backed up pro Russian militias in the Crimean crisis but insists this was within the limit of 25 thousand in the naval agreement. Leaving aside the questionable legitimacy of the referendum in Crimea there is no doubt thatRussia forcibly annexed The Crimea on the grounds of nationalism, without regard to the sovereign integrity ofUkraine. International law places state sovereignty above nationalism and therefore the UN has condemned the action of the Russians as illegal. Should the priority placed by the Russians on nationality over sovereignty remain unchecked there are increasing dangers not only forUkraine but other neighbouring states who share borders withRussia.

The effect on tourism Flows
Lastly its useful to consider how these situations affect tourism flows. As the scenario inUkraine plays out we are witnessing the breakdown of bi lateral relations betweenRussia and theUS. The travel bans imposed on Russians as sanctions are simply signposts of a much larger shift in attitudes and tourism flows that will result from what may become the cold war - part two. The countries who have recently joined the EU and who have benefitted either in pure investment terms (inward investment from EU funds in infrastructure for example) or in tourism terms (Croatia is a good example with impressive growth over the past 5 years) will be watching this situation closely and with some misgivings. Others who are outside the EU but whose populations see and desire what the EU has to offer will be even more worried.

The political stability, reduction in corruption and enhancement of democratic structure/rule of law- all part of accession to and membership of the EU - are major factors involved in turning raw tourism resources into actual tourism flows. The fact that Croatia for example, albeit with a recent history of unrest, was increasingly seen as stable and secure part of the EU made it a  destination able to attract more and more incoming tourists. When tourism professionals come to make strategic plans they ignore international relations and the threat of political unrest at their peril.

These links between bi-lateral and multi lateral international relations and tourism flows bear more focus and research than has hitherto been the case. The incursion into Crimea, the continuing crisis inUkraineand its economic ramifications particularly in the energy industry has changed the international relations status quo (between US,Russiaand the EU countries but also betweenRussiaand its immediate neighbouring states) in a fundamental way. This change will alter perceptions of security and trustworthiness of destinations, and with them tourist flows will also change. This will be the subject of further research the aim of which will be to monitor the changes in perceptions and try to integrate that information into tourist destination marketing strategies.


Peter Singleton

May 2014

 Disclaimer: The opinions articulated here are those of the author alone, and do not represent those of ETFI as an organisation

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