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Russia to get more benefits from investing in Crimea’s tourism - economist

March 13, 2014, 17:35 UTC+3 MOSCOW
Crimea could be the best solution of the long-term development of the Russian economy
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© ITAR-TASS/Alexei Pavlishak

MOSCOW, March 13,  /ITAR-TASS/. The Russian economy may get  even more benefits from investing in Crimea’s tourism industry in the long term than into large-scale transport projects, rector of the National Research University - Higher School of Economics professor Yaroslav Kuzminov told Itar-Tass on Thursday.

He spoke of economic prospects of Crimea that plans to hold a referendum on accession to Russia on March 16.

Modernisation of Crimea’s travel industry requires heavy investments, Kuzminov says, adding that the source for such investments “can be only national savings that in any case should be retargeted from transport projects that have already been announced.”

“It is rather difficult to compare economic effects. Nevertheless, I would risk to say that Crimea is the best solution from the point of view of the long-term development of the Russian economy, even if we compare this with a big transport ring around Moscow or expansion of railroads in Siberia,” he said.

According to Kuzminov’s estimates, Russia’s middle class spends 27,4 billion US dollars per year for holidaying abroad.

“It is quite a reasonable task for 2020 to retarget the domestic effective demand for the Black Sea coast (Crimea and Sochi) just by 30% ,” he said, noting that “inevitable reduction of the rouble’s purchasing capacity will increase attractiveness of ‘domestic’ resorts, if they provide minimally acceptable quality of services.”

After the collapse of the Soviet Union the obvious place of Crimea in Ukraine’s economy and in Russia as a resort capable of accommodating 10 million travellers a year turned out to be non-demanded and was substituted by Mediterranean resorts, Kuzminov said. He named among reasons weakness of Ukraine’s economy, first of all of its budget and effective demand, and practically an absolute lack of property protection.

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