BOFIT Viikkokatsaus / BOFIT Weekly 2019/26

Last Friday (Jun. 21), President Vladimir Putin signed a decree suspending direct flights between Russia and Georgia citing heightened security concerns. Thousands of protesters took to the streets in the Georgian capital of Tbilisi last week after a representative of the Russian Duma addressed the Georgian parliament as part of a meeting of the Interparliamentary Assembly on Orthodoxy. Relations between Georgia and Russia have stayed tense since the August 2008 war between the two countries. While they have not restored diplomatic ties, tourism and trade have remained brisk.

About a million Russian tourists visited Georgia last year. Given that Russians constitute the largest tourist group, observers estimate that Georgia’s loss in revenues due to the ban on flights could go as high as 300 million euros this year. Russia’s food safety agency (Federal Service for Veterinary and Phytosanitary Surveillance) has also blocked specific wine shipments from Georgia. Russia banned imports of Georgian wines altogether from 2006 to 2013. Russia last year accounted for 13 % of Georgia’s total exports, about a quarter of which was wine.

The ban on flights to Georgia is not the first instance of Russia imposing restrictions on tourism abroad. Russia halted all flights to Egypt in 2015 after a suspected luggage bomb brought down a charter flight from the Red Sea resort town of Sharm el-Sheikh to St. Petersburg. Before the bombing, over 2 million Russians visited Egypt each year. Since then, official figures show the number of Russian tourists visiting Egypt has fallen to less than a thousand annually. Tourist numbers to Egypt failed to recover, even after scheduled direct flights between Cairo and Moscow were re-established last autumn, and there are plans to reinstate charter flights later this year.