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Too Far, Too Fast: Sochi, Tourism and Conflict in the Caucasus
Too Far, Too Fast: Sochi, Tourism and Conflict in the Caucasus
Table of Contents
  1. Executive Summary
Isolation of Post-Soviet Conflict Regions Narrows the Road to Peace
Isolation of Post-Soviet Conflict Regions Narrows the Road to Peace
Report 228 / Europe & Central Asia

Too Far, Too Fast: Sochi, Tourism and Conflict in the Caucasus

The recent bombings in the south of Russia could prove a precursor to more violence and instability in the Caucasus if Moscow does not abandon repression for political dialogue.

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Executive Summary

Russia has invested extensive resources and prestige in the Winter Olympics to be held in the Black Sea resort of Sochi, 7-23 February 2014. The tab, an estimated $51 billion, does not include a nationwide security operation to protect the venue against attack by a resilient and ruthless armed jihadi movement. A spate of bombings, including two in December in the southern city of Volgograd, show that North Caucasus Islamist terrorists are determined to strike opportunistically across the country to mar the games and challenge President Vladimir Putin, who has promised a “safe, enjoyable and memorable” Olympic experience. If ripple effects of security for Sochi and the ambitious regional tourism project the games are meant to inaugurate are not to worsen the situation in the war-torn North Caucasus, local communities must be assured they will benefit from the development plans, not fall victims to rapacious local elites or the abuses allegedly accompanying the Games. Equally important, they will need guaranteed long-term security, not simply oppressive security regimes.

To forestall attacks on the Games themselves, which will be held a few hundred kilometres from Europe’s most active armed conflict, the government has transformed Sochi into a tightly-sealed high-security zone. Tens of thousands of troops, police and special forces have been deployed, along with drones, advanced cyber surveillance and a special security regime. 

Even before the Volgograd bombings, which indicated that security cannot be guaranteed across the vastness of Russia’s nine time zones if the terrorists should choose to strike away from Sochi, the Olympic hosts faced many other challenges. Construction of facilities for the Games has been accompanied by serious delays, allegations of corruption and incompetence, violation of residents’ and workers’ rights, relocation without compensation and encroachment on unique ecosystems. The Circassians, one of the region’s main ethnic groups, bitterly criticise the choice of Sochi for the Games, describing the venue as the site of nineteenth-century Russian war crimes against their people. As the Olympic opening ceremonies approach, Moscow has tried to improve its human rights image, releasing among others Mikhail Kho­dor­kov­sky, the former billionaire and Putin political opponent, after ten years in prison, two members of the Pussy Riot punk band and 30 Greenpeace activists.

What has been less noticed is that the Games are to be the curtain raiser for an ambitious, expensive and risky plan to develop tourism across the North Caucasus as a whole, including in parts where active counter-insurgency operations are underway. The North Caucasus Resorts (NCR) project aims to create ten major resorts, including in Dagestan and Chechnya, republics that have been particularly affected by deadly conflict in recent years. The goals are 3.5 million tourists annually and creation of at least 160,000 jobs, at an estimated cost of at least $15 billion.

Planning for the Winter Games has already resulted in heavy-handed security policies in the North Caucasus that are more likely to exacerbate the situation in the region than calm it. In Dagestan, for example, attempts to rehabilitate insurgents and engage in dialogue with moderate Salafis have been replaced by a wave of repression against fundamentalist Muslims. Similar policies have been applied in Ingu­shetia, and security has also been tightened elsewhere.

These measures may temporarily suppress the symptoms of the North Caucasus insurgency, but they cannot solve the core problems. The region needs lasting peace above all, not more massive security operations. Ultimately, comprehensive conflict-resolution is required; currently the government appears committed to a course that boils down to “fighting terrorists until their complete destruction”, as President Putin put it in his 2014 New Year’s address.

Spring rains cover the Rukhi bridge, located on the Georgian-Abkhaz conflict divide, before much needed renovation works began in summer 2016. CRISIS GROUP

Isolation of Post-Soviet Conflict Regions Narrows the Road to Peace

Unresolved conflicts and breakaway territories divide five out of six of the European Union’s Eastern Partnership countries, most of them directly backed by the Russian Federation. But a policy of isolating the people living in these conflict regions narrows the road to peace.

The lung specialist I consulted for bronchitis recently in Abkhazia exuded competence, warmth and the poetic courtesy of Soviet-era intelligentsia. She apologised for the hospital as she flicked through a notebook from a year-old seminar on the latest treatment protocols in Russia. She said she had been lucky to attend the briefing: most doctors from Abkhazia or other conflict or breakaway regions in the former Soviet space do not learn about modern treatments. Most teachers have little access to new international best practices and methods. Police still work according to old manuals.

A policy called “isolation” by residents of such regions – Abkhazia and South Ossetia, which have sought to secede from Georgia, and the Nagorno-Karabakh region at the heart of the dispute between Azerbaijan and Armenia – severely restricts their links with the world and contributes to a sense of living under siege, sometimes for over two decades. A tendency toward isolating populations is in place also in eastern Ukraine for separatist Donetsk and Lugansk. Transnistria, the breakaway region of Moldova, has more trade and travel ties but development has not followed. In all these regions, different though they are, isolation harms the people, creates resentment and causes positions to harden.

In all these regions, different though they are, isolation harms the people, creates resentment and causes positions to harden.

A leading politician in Georgia, speaking privately, recently explained the de-isolation dilemma: those who want to engage the populations in conflict regions more substantively and let the world do so – without recognising their self-proclaimed independence, of course – fear this would “cement de facto realities on the ground”, leaving no incentive for the breakaway entities “to come back” to what they regard as their former countries. On the other hand, isolation proponents wish to put pressure on the breakaway regions, or simply take revenge on them. In the words of a Georgian architect of the approach: “they have made their bed, let them lie in it, whatever that brings.”

Changing isolation-minded approaches is considered perilous by central governments like Tbilisi, Kyiv and Chisinau, which lay claim to these territories. They focus, understandably, on the danger of Russia’s economic and military backing for them. In the case of Nagorno-Karabakh, Baku is angry about the breakaway region’s links with Yerevan and the Armenian diaspora. The central governments fear that support for the people in these conflict regions might translate into their acquisition of resources to reinforce their separatism. They also worry that allowing increased engagement with the outside world is a slippery slope toward the very recognition of these territories that they have sought to prevent.

These conflicts in Europe’s east are unlikely to be resolved soon. They play out at different levels – geostrategic, regional and local – all of which are stuck and have in the past years seen a deterioration. Formal conflict resolution processes can at best manage the conflicts for now, and in Ukraine and Nagorno-Karabakh even that is not easy. Ukraine, Moldova, Georgia, Armenia and Azerbaijan form part of the European Union’s (EU) “Eastern Partnership” – along with Belarus, which has no such conflict. But although the EU would willingly engage with the trapped populations of their breakaway regions, of course without their recognition, there is little diplomatic space for this.

It is hard for governments that have lost control to devise the right approach to breakaway entities, especially when a big power supports that entity militarily, economically and socially or even acknowledges its claim to independence, such as in case of Abkhazia and South Ossetia. Nevertheless, isolation policies tend to forget the ordinary people, whose choices and calculations matter, and local initiatives can present opportunities for progress towards settlements. Opening up these societies to alternatives – to the degree possible given Russia’s involvement in the regions and also their own concerns about Western political agendas - by building professional, educational and business links, irrespective of political status, can improve lives and prepare long-term conflict transformation.

When a Passport is Not a Passport

Work being carried out on Rukhi bridge, located on the Georgian-Abkhaz conflict divide. A long overdue facelift for the bridge started in summer 2016. CRISIS GROUP

Isolation policies have many faces and are rarely so named, since few would openly underwrite an approach that curtails human contacts. So what do they feel like in the conflict regions?

Travel is restricted. I met a young Abkhaz scientist who would have wished to study in Germany. A pair of newlyweds would have loved to experience Italy’s culture. A South Ossetian professor wanted help to attend a Hungarian archaeological conference. A Nagorno-Karabakh businessman was interested in European brandy-making. A fortunate few could afford travel to Europe for medical help. All these people know it is not on the cards.

In Abkhazia and South Ossetia, people mostly obtain Russian passports from consulates created after Moscow recognised their unilaterally declared independence in 2008. Tbilisi and much of the international community consider these passports illegal. Visas are put in them rarely, and mostly in special cases, meaning that most Abkhaz and Ossetians can only travel to Russia.

As an alternative, Tbilisi developed “status-neutral travel documents” in 2011-12, but the idea got little traction among people from the conflict regions. Most did not accept the Georgia country code on them, or traveling to the Tbilisi-controlled territory to acquire them. The divide is deep and loyalties matter.

This is also why many in Abkhazia also say it is too optimistic to expect large numbers to take Georgian passports when Tbilisi finally receives the visa-free regime with the EU expected by year’s end. Abkhazia’s own de facto foreign passport is considered illegal by Georgia and not recognised by others, except Russia and the other three countries that recognise it. Some legal experts argue that if used purely for identity, that document would not imply recognition. But since Russia annexed Crimea, the appetite in the West for imaginative solutions is minimal, not to speak of migration concerns.

Nagorno-Karabakh residents mostly hold an Armenian passport with a serial number tied to Karabakh residence into which Western embassies will rarely stamp visas. Azerbaijan also keeps a watchful eye for those who may represent Karabakh abroad even in apolitical civil society forums. Political hurdles block some much-needed dialogue, and even overshadow sports and culture. Would a football team representing a breakaway republic abroad be a sports enterprise or a political statement – or both?

Abkhaz register in Russia and Karabakh Armenians register in Armenia, though the latter get regular passports and can travel more easily. But this forces them deeper into political dependency on third actors, and further away from those they would need to be addressing to reach a long-term settlement.

The Sukhumi to Moscow train, passing through Novyi Afon station in Abkhazia. CRISIS GROUP

Abkhaz from all walks of life – intellectuals from Sukhumi, war veterans from Gudauta, youths looking for jobs in the ancient monastery town of Novyi Afon on the coast – spoke of frustration at exclusion from the Europe they feel they belong to. Many call it a human rights violation that their visa applications are not even considered. However, the considerations have less to do with human rights than with politics of the conflict. But political hurdles also mean there could be space for pragmatic solutions.

Transnistria, perhaps because there is no prominent ethnic component, is a rare post-Soviet conflict that evidences some pragmatism.

Although a part of the population holds Russian passports, some also have Ukrainian and even Romanian passports, and a number of residents have Moldovan passports, which became more attractive with the visa-free EU access gained in 2014. But these solutions are hard to replicate.

Holding Back Education

Education and healthcare work have been held back in the conflict regions, where infrastructure was destroyed and post-war dilapidation followed. Like the Abkhaz doctor, professionals struggle to keep their knowledge current.

Education and healthcare work have been held back in the conflict regions, where infrastructure was destroyed and post-war dilapidation followed.

Russian social and economic development and military aid supports Abkhazia, Ossetia and Transnistria. Armenia and its diaspora assist Nagorno-Karabakh. But support for human development is fitful. Russians occasionally invite doctors and teachers for training. Armenians seem more systematic about aiding Nagorno-Karabakh professionals. To a small degree, international organisations also help in health and education, but they are careful to avoid classical, long-term development strategies that could get them into political trouble. 

Regional governments should give more space to allow for external actors like the EU to provide more professional training and exchanges, locally and in Europe, without raising excessive central government concerns. Better trained, more empowered doctors, teachers and police would produce a more competent, better-adjusted population, whatever the political future.

The environment is another apolitical sphere where the need for basic technology and know-how are high. Waste water management and garbage disposal need investment, especially after a generation of neglect. An ex-leader admitted that this could improve the Black Sea coast, shared by six countries and Abkhazia’s greatest tourist attraction. Engagement would benefit everyone, irrespective of geo-political disputes.

It is local people who must buy into settlement processes, but a new generation has come of age in Abkhazia, South Ossetia and Nagorno-Karabakh knowing no Georgians or Azerbaijanis on the other side of the front lines and considering them enemies. Their world may be smaller thanks to the internet but it is also very far away due to isolation. In eastern Ukraine, a propaganda war is working to deepen the polarisation.

The isolation leads to entrenched self-sufficiency and saps any appetite for developing links across divides or recalibrating calculations about the conflicts. Yet, it is such links that can ultimately work to restore the ripped social fabric in eastern Ukraine or, in Karabakh, inspire some rethinking of the cost of conflict, and pave the way to enable compromise and sustainable transformation.

Economies in Limbo

One of Sukhumi’s Black Sea piers; some piers host cafés and restaurants. CRISIS GROUP

Among conflict-region residents, there are always complaints about the lack of jobs and the attendant ills, from depression to drugs. Shadow business exists across borders, maintaining contacts but creating vested interests that perpetuate the conflicts. In the Georgian-Abkhaz context, there is for instance trade in the local cash-crop, hazelnuts. In eastern Ukraine, the scale is larger: coal from separatist areas goes, at least partly, to Kyiv-controlled Ukraine. Corruption, locals admit, is rampant. The term “kontraband” is used in all the conflict regions to describe informal trade that includes alcohol, tobacco and even drugs.

While shadow business generally finds a way, developing local small and medium-sized enterprises is an uphill struggle. Investor confidence is low but the bigger hurdles are tied to politics: business cooperation with entities in conflict regions quickly hits status and legal issues. Georgia’s 2008 Law on Occupied Territories aimed to protect the country’s territorial integrity by penalising, among others, businesses with actors in Abkhazia and South Ossetia. Tbilisi has also sought to block investment. Ukraine is preparing a law on occupation.

Transnistria is again unique: textile production provides income and has helped ease disputes. The output, large enough to support meaningful export, gives Tiraspol an incentive to back the application to Transnistria of Moldova’s free trade deal with the EU. 

There is no similar large-scale business interest in Abkhazia or South Ossetia, which also have tendencies to self-isolate as a result of the conflict. South Ossetia seals its boundaries with Georgia, and there are few commercial exchanges. Abkhaz businessmen say registering on the Tbilisi side of the divide would be a non-starter. Even to test whether pragmatic solutions can be found to address legal considerations and legacies alike would require developing production capacities in these forgotten regions, which comes back to investment.

Abkhazia’s main economic focus has traditionally been tourism and agriculture. Pre-war, an older leader said, the territory supplied the Soviet Union with half the tangerines which Turkey now ships to Russia. After the 1990s conflict, both sectors broke down. Tangerine orchards were not maintained and nearly 75 per cent of their capacity was lost; tourism suffered too, although today, Abkhaz sources say, 1.5 million people visit yearly, mainly from Russia. Finding a way to facilitate investment needed to boost small and medium business in agriculture would not only create jobs, but also help open up a society that has felt besieged.

A small business in Gali, near the Georgian-Abkhaz conflict divide. CRISIS GROUP

Nagorno-Karabakh is in practice increasingly integrated into the Armenian economy. For instance, an Armenian producer grows some of his tobacco in Karabakh and completes the cigarettes in Armenia. No exchange is likely across the heavily-mined line of contact with Azerbaijan, however, until a political framework is found. Baku makes clear its strongly negative reaction to any outside investment in the breakaway territory’s development. 

When political solutions to the conflicts are found, major investment will be needed to rebuild the conflict regions. But for now, the question is how best to develop small-and medium-scale businesses that can improve local lives, open horizons and might create productive links across the divides.

What Engagement Could Do

Summertime on Sukhumi's seaside promenade. CRISIS GROUP

So how can isolated regions be opened up without crossing the red line of territorial-integrity? It requires Tbilisi, Kyiv, Chisinau and Baku to consider a shift in their thinking about affected populations, as opposed to thinking about the de facto leaderships in place in the conflict regions. Steps like offering free health care to people from separatist Donbas; prioritising education opportunities abroad for Abkhaz and Ossetians; developing professional capacities of Karabakh Armenian teachers would be a good start.

The EU has resources and frameworks to help: in 2007, it offered a creative “engagement-without-recognition” policy for Georgia’s breakaway entities. The 2008 war changed the landscape, however. Georgia then favored a restrictive line that in practice limited much engagement; the 2014 annexation of Crimea made the context more sensitive. However, the framework is there and could be repurposed for pragmatic, apolitical solutions there and in other conflict regions.

Encouraging conflict-region students to study at European universities, despite visa and diploma recognition issues, would be an important start. Other academic cooperation would also be useful, such as inviting more scholars for conferences and academic exchanges.

Offering apolitical professionals from conflict regions training for new qualifications abroad would do much good. Doctors specialised in chronic disease management, infectious diseases, trauma medicine and psychology and teachers might benefit most. Farmers learning modern farming techniques could boost the local agricultural sectors.

Engaging the conflict regions in status-neutral discussion of environmental issues – waste water treatment, garbage management and timber extraction – and helping to address them in practice, is equally urgent. Sustainable energy experts could help optimise the use of energy.

Supporting small-and medium-sized enterprises in agriculture, tourism, service or water production could build new constituencies with forward-looking interests and a wider frame of reference.

While comprehensive political solutions seem distant, engaging populations in the conflict regions can help break their isolation and thus create a much-needed peace resource.

Local and regional conflict grievances would still need to be addressed, but they would not be the sole focus. While comprehensive political solutions seem distant, engaging populations in the conflict regions can help break their isolation and thus create a much-needed peace resource.

The treatment prescribed by my Abkhaz doctor worked well. But many of her colleagues, especially the younger ones, crave more learning. Without a more open road to it and the other advantages of contact with the outside world, the populations of the breakaway regions will remain trapped ever more firmly in their isolated status quo.