CC BY
9DOI: 10.29141/2658-5081-2023-24-1-2 EDN: LBYBYP JEL classification: P 25
Yakov P. Silin Ural State University of Economics, Ekaterinburg, Russia
Natalya V. Novikova Ural State University of Economics, Ekaterinburg, Russia Olesya V. Kharitonenko Ural State University of Economics, Ekaterinburg, Russia
Structural and industrial transformation of resort towns' economies: The case of urban districts in the Republic of Crimea
Abstract. The study of transformation processes in economies of various settlements, including those taking place in urban districts of a health resort type, still lacks a fully-formed methodology. There are no confirmed approaches and clear methods of cognition, which is a consequence of the uniqueness of such type of settlements. The difficulties of studying their structural and industrial transformation and specialisation, its stability / variability increase due to the need to build long time series of economic indicators, since only in such case the findings can be considered reliable. The paper aims to identify the processes of structural and industrial transformation in the economies of urban districts of a health resort type in the Republic of Crimea in different institutional contexts, as well as to justify the factors behind and conditions for occurring changes, and describe the 'genetic code' of the settlements of this type. Methodologically, the paper relies on the regional and municipal economics. The methods include various types of analysis, in particular, structural, time series, bibliometric and content analysis. The data comes from the Crimea's socioeconomic statistics for 1935-2021. The 'genetic code' of the Crimea's economy and resort towns located in its territory consists in the dominance of the health care sector due to the developed health resort activity, which is based on the use of unique natural treatment factors and resources. The findings indicate that this code remains stable despite changing institutional contexts unceasingly reshaped by the state geostrategic interests, the world geopolitical situation, and the political atmosphere in neighboring territories.
Keywords: municipal development; urban districts; resort towns; health resort activity; structural and industrial change; Republic of Crimea.
For citation: Silin Ya. P., Novikova N. V., Kharitonenko O. V. (2023). Structural and industrial transformation of resort towns' economies: The case of urban districts in the Republic of Crimea. Journal of New Economy, vol. 24, no. 1, pp. 26-49. DOI: 10.29141/2658-5081-2023-24-1-2. EDN: LBYBYP.
Article info: received November 3, 2022; received in revised form December 1, 2022; accepted December 14, 2022
Introduction
The patterns of structural changes in municipal economies of urban settlements determine the prospects for local development. However, these processes have been studied only to a limited extent. In conditions of instability and uncertainty it is important to fill this literature gap, because understanding the factors, conditions, trends of economic evolution, municipal economy's 'genetic code', the historical stages of the 'code' formation allows local governments to identify promising trends in the development.
The object of our research is urban districts of a health resort type located in the economic space of the Republic of Crimea.
The majority of prior research on the Crimean Peninsula performed within regional (municipal) economics addressed economic and social processes in its territory [Ametov, 2001; Nekhaychuk, Tarasov, Trofimova, 2015; Maydanevich, 2019], analysed the tourist and recreational potential of the region and the individual municipalities [Laiko, 2014; Yakovenko, 2015]. There are also publications considering the historical aspects of Crimea's development and the influence of various factors and conditions on its economic and social dynamics [Simchenko, Tsekhla, 2016; Popov, 2019].
However, there is a lack of papers on the municipal economic problems of unique urban settlements, the structure of which is dominated by tourist and recreational services, including health resort activities.
The purpose of the study is to justify a structural and industrial transformation of the economy of urban districts of a health resort type, within which their 'genetic code' (specialisation of local economy) is formed and preserved, which is important for ensuring their sustainability and determining evolutionary prospects.
To achieve this goal, we pursued the following objectives:
• to select and systematise statistical indicators that allow identifying urban districts of a health resort type located in the Republic of Crimea;
• to create time series in order to identify structural shifts in the economy of urban districts of a health resort type;
• to substantiate factors and conditions behind structural changes, to establish relationships "structural shifts - economic growth" and formulate the 'genetic code' of the municipal economy.
Urban districts of a health resort type: Theoretical basis and stages of formation in the Republic of Crimea
Currently, in the territory of the Republic of Crimea there are eleven urban districts, which differ in the municipal economic structure and, accordingly, belong to different types of settlements.
To identify urban districts of a health resort type, we have developed our own method, since there are no clear methodological approaches to handle this problem using official statistics.
We have studied a plethora of Russian and foreign scientific literature devoted to the problems of the tourist and recreational industries' development and their impact on the economic and social dynamics of the region of their functioning [Lock, 1983; Oborin, Nagoeva, Kozhushkina, 2020], to health resort activities [Cook, 2010; McHale, 2010; Speier, 2011; Hofer, Honegger, Hubeli, 2012; Aslanov, 2012; Dalstrom, 2013; Loh, 2014], typologies of settlements [Harris, 1943, pp. 86-99; Lappo, 1997], issues of regional development [Boudeville, 1961; Perroux, 1961; Silin, Animitsa, 2020] and municipal economy [Hagerstrand, 1967; Animitsa, Silin, 2021].
Systematisation of the findings made it possible to define an urban district of a health resort type as a special kind of municipalities where natural therapeutic factors (balneological and marine resources, therapeutic mud (peloids), landscape and climatic conditions, etc.) are concentrated and actively used; health resort and social infrastructure facilities operate; the structure of the municipal economy is dominated by health resort activities aimed at meeting the needs of the arriving population in recreation, strengthening and maintaining health, and medical treatment.
Previously, we developed the scientific paradigm of cognition of the economic and social dynamics of resort towns, built on the foundation of three branches of human sciences: economic and social geography (principles underlying the typology of settlements), economic sociology (theory of the consumer society), economics, specifically, municipal economics as the major frontier of municipal science, within which theories of local economic development are actively being shaped [Silin, Kharitonenko, 2022]. This study continues previous elaborations and is a regional projection of this scientific paradigm.
Institutional forces dominate among the most important factors behind the origin of the Crimean peninsulas resort towns since the middle of the 19th century, in particular, they include the geostrategic interests of the Russian Empire concerning the settlement and economic development of the southern lands; improvement of transport accessibility of the Crimea due to the construction of railways; research and promotion of the medicinal properties of the Crimean nature by authoritative medical scientists [Konda-raki, 1875; Pyankov, 1886; Korsakov, 1895; Voronina, Shvets, 2022, pp. 140-157].
The evolution of the Crimea's tourist and recreational industries is investigated in numerous contributions [Yakovenko, 2016; Yakovenko, Strachkova, 2019]. Various time periods differ in the directions of tourist and recreational space development and specificities of functional, territorial and administrative structure. Following on from the findings and relying on the empirical material we have collected, we assert that each of the stages is closely related to the origin, formation and development of settlements with health resort specialisation. Let us further define the boundaries and content of these stages.
First stage. The beginning of the 19th century - 1917 was the time of the resorts' birth, active and educational tourism and partial recreational development of the territory of the Crimea, which stimulated the development of settlements in the structure of which resort activity was formed.
In 1826, the first Crimean resort appeared, based on the use of healing mud of the Saka Lake. Later, in 1884, the creation of tuberculosis sanatoriums on the southern coast of Crimea began. Thus, Yalta acquired a resort status in the late 19th - early 20th centuries thanks to the popularisation of its healing climate by the court physicians of the Romanov family. The Crimean local historian, a member of the Imperial Russian Geographical Society, described Yalta in 1875 as follows: "The entire population is engaged in gardening, winemaking and tobacco growing. Since the time when the Empress Maria Alexandrovna acquired Livadia in the neighborhood of this town and began to visit her dacha almost annually, Yalta has been flooded with thousands of patients and tourists" [Kondaraki, 1875, p. 82].
Second stage. 1917-1950 saw the formation of the socialist system of spa treatment and recreation, planned tourism and local recreational systems development.
The cores of health resort treatment in the Crimea are settlements that acquire urban features - Yalta, Alushta, Feodosia, Yevpatoria. The highest values of the average annual increase in the number of health resorts and the number of bed places in them were noted in the post-war period of 1945-1950 (Table 1).
Third stage. The period of 1951-1990 was the time when the scale of tourist and recreational activities was growing and regional recreational areas with the centers in urban settlements were emerging. These areas include the Southern one (with the centers in Yalta, Alushta), the Western one (Yevpatoria, Saki) and the South-Eastern one (Sudak, Feodosia).
During this period, the number of health resorts did not go up significantly, but we can see a boost in number of bed places, the number of physicians and mid-level medical personnel, as well as a concentration of health resort activities and consolidation of health resort and health-improving facilities.
Table 1. Most important indicators of the health resort activity in the Crimean region,
1945-1970
Period Number of health resorts, units Number of bed places in health resorts, units Number of physicians, people Number of mid-level medical personnel, people Average annual growth
Number of health resorts, units Number of bed places in health resorts, units Number of physicians, people Number of mid-level medical personnel, people
1945 31 3,677 1,222 2,902 - - - -
1945-1950 111 16,618 2,610 5,725 16 2,588.2 277.6 564.6
1950-1955 126 23,120 3,704 8,608 3 1,300.4 218.8 576.6
1955-1960 97 26,916 5,144 12,750 -5.8 759.2 288 828.4
1960-1965 98 34,623 6,919 16,190 0.2 1,541.4 355 688
1965-1970 105 39,242 8,653 21,834 1.4 923.8 346.8 1,128.8
Source: own compilation based on the data from National economy of the Crimean region. Statistical Yearbook. (1957). Simferopol: Krymizdat Publ., pp. 265-266 (In Russ.); National economy of the Crimean region. Statistical Yearbook. (1967). Odessa: Statistika Publ., pp. 169-170. (In Russ.); National economy of the Crimean region. Statistical Yearbook. (1972). Odessa: Statistika Publ., pp. 115-116. (In Russ.).
Notably, in 1988 the Crimea recorded an absolute maximum of the inbound tourist flow - 8.3 million people, as well as of the number of functioning health resort facilities - 620 units with 81.6 thousand bed places available all year round and 164.2 thousand bed places available in high season, 122 health resorts and boarding houses with treatment [Voronina, Shvets, 2022, p. 141].
Fourth stage. In 1991-2014, the tourist and recreational industries of the region went through the stagnation and market transformations, which escalated the economic and social problems of the municipal economies of the urban districts in the Crimea that became part of Ukraine.
The development and structural transformations of the tourist and recreational sector of the peninsula's economy were significantly influenced by another institutional factor - the collapse of the USSR.
The system of health resort treatment and tourism in the Crimea has entered a period of inbound flows reduction, and consequently, the volume of services decreased. The change of the state system, the established ties and relations, the fall in real incomes of the population, the instability of the economic and political situation in the countries of the former USSR, attempts to transit to a market system of management led to the fact that during 1991-2013 there was an extensive growth of small private accommodation facilities, accompanied by a weakening of the resorts' therapeutic function and an increase in spatial unevenness in the recreational development of the peninsula [Yakovenko, 2015; Yakovenko, Strachkova, 2019].
After 1991, the region's resort specialisation transformed substantially due to a shift from health resort specialisation in favour of tourist orientation (beach and active tourism). In general, there was a decline in organised health resort activity, as well as mountain and foothills tourism with an increase in the share of beach tourism in its spontaneous version. Unorganised holidaymakers noticeably outnumbered vacationers in health resorts; the private sector came out on top, accommodating up to 80 % of holidaymakers in some years.
Fifth stage. The period from 2014 to the present is the stage of transformations in the functional and territorial structures of the tourist and recreational industries due to the inclusion of the Crimea into the Russian Federation that resulted in structural and sectoral shifts within the newly formed municipal economies of urban districts, including of a health resort type.
Since 2020, attention to health and wellness activities has soared thanks to the analysis of the consequences of the COVID-19 pandemic, and the growing relevance of the health capital agenda [Arrow, 1963; Grossman, 1972; Becker, 1993] and the health economics [Culyer, Newhouse, 2000; Fuchs, 2000; Folland, Goodman, Stano, 2010; Okrepilov, 2012].
A composite indicator-based assessment of the health resort potential of urban districts in the Republic of Crimea
In accordance with the foregoing essential characteristics of urban districts of a health resort type, we carried out a staged identification of resort towns from the totality of settlements located in the Republic of Crimea.
At the first stage, we have selected six absolute indicators tracked by official statistics, which characterise the activities of specialised accommodation facilities (health resorts and recreation facilities):
• the number of specialised accommodation facilities, units;
• the number of rooms, units;
• the number of bed places in the room supply, units;
• the number of overnight stays, units;
• the number of accommodated persons, thousand people;
• income from services provided, million rubles.
The dominance of health resorts' performance indicators allows us to separate those urban districts in which the leading industry in the structure of the municipal economy is the provision of health resort services as opposed to the tourist component (Tables 2, 3).
Table 2. Key performance indicators of specialised accommodation facilities
in the Republic of Crimea, 2021
Number, units Number of rooms, units Number of bed places, units*
Urban district
Health Recreation Health Recreation Health Recreation
resorts facilities resorts facilities resorts facilities
Yalta 45 47 7,123 2,148 15,080 5,273
Yevpatoria 30 40 6,664 2,793 14,512 7,907
Alushta 16 51 3,296 4,112 7,422 8,873
Saki 8 15 1,804 548 3,301 1,743
Sudak 3 19 881 1,659 1,669 3,494
Feodosia 2 42 2 732 6,060
Simferopol 0 9 0 181 0 511
Kerch 2 18 594 1,791
Armyansk 0 1 0 0
Krasnop erekopsk 0 0 0 0 0 0
Dzhankoy 0 0 0 0 0 0
Republic of Crimea, total 109 415 20,892 22,999 44,054 57,508
Number of accommodated persons, thousand people Income from services
Urban district Number of overnight stays, thousand units provided (excluding VAT, excise taxes and similar payments), million rubles
Health Recreation Health Recreation Health Recreation
resorts facilities resorts facilities resorts facilities
Yalta 2,559.8 331.5 228.6 39.5 10,605.7 815.7
Yevpatoria 1,831.3 600.4 118.4 47.8 2,916.5 1,049.7
Alushta 1,379.2 566.9 102.0 84.5 3,014.2 1,917.0
Saki 770.0 136,2 54.6 10.8 3,245.1 280.1
Sudak 291.8 193.4 21.9 22.7 571.1 274.9
Feodosia 417.5 46.7 824.3
Simferopol 0 9.4 0 3,295 0 13.0
Kerch 67.8 12.7 63.2
Armyansk 0 0 0
Krasnop erekopsk 0 0 0 0 0 0
Dzhankoy 0 0 0 0 0 0
Republic of Crimea, total 7,163.9 3,479.7 532.0 399.1 20,937.7 7,726.6
Source: own compilation based on the data from Activity of collective accommodation facilities in municipalities of the Republic of Crimea for 2021. Statistical Bulletin. (2022). Simferopol: Krymstat Publ., pp. 9-20. (In Russ.)
Notes: * means for specialised accommodation facilities (health resorts and recreation facilities), the values are given in the month (day) of their maximum; ... means data are not published by statistical authorities in order to ensure the confidentiality of primary statistical data received from organisations in accordance with Article 9 of Federal law no. 282-FZ of November 29, 2007 "On official statistical accounting and the system of state statistics in the Russian Federation".
Table 3. The share of health resorts in the performance indicators of specialised accommodation facilities of the Republic of Crimea in 2021, %
Urban district Number of rooms Number of bed places Number of overnight stays Number of accommodated persons Income from services provided (excluding VAT, excise taxes and similar payments)
Yalta 76.83 74.09 88.53 85.27 92.86
Yevpatoria 70.47 64.73 75.31 71.24 73.53
Alushta 44.49 45.55 70.87 54.69 61.13
Saki 76.70 65.44 84.97 83.49 92.05
Sudak 34.69 32.33 60.14 49.10 67,51
All urban districts of a health resort type 66.30 62.88 80.00 73.39 82.96
Republic of Crimea, total 47.60 43.38 67.31 57.14 73.04
Source: own compilation based on the data from Activity of collective accommodation facilities in municipalities of the Republic of Crimea for 2021. Statistical Bulletin. (2022). Simferopol: Krymstat Publ., pp. 9-20. (In Russ.)
The presented data show the following.
1. Health resorts are present in seven out of the eleven urban districts of the Republic of Crimea. However, in Sudak, Feodosia and Kerch, their number is insignificant - 2-3 units, while recreation facilities are more widely represented there. There are no health resorts in the regional capital - Simferopol, as well as in Armyansk, though there is a small number of recreation facilities. The urban districts of Krasno-perekopsk and Dzhankoy do not have any of such facilities at all.
2. Yalta and Yevpatoria are leaders in terms of the number of health resorts located in their territory as of 2021 (45 and 30 units, respectively). These two towns concentrate the largest number of overnight stays (4,391.1 thousand overnight stays, or 61.3 % of the regional value in the Republic of Crimea) and the highest number of persons accommodated in health resorts (347 thousand people, or 65.2 % of the regional value).
3. As of2021, leaders in the number of persons accommodated in health resorts were as follows: Yalta (228.6 thousand people) took the first place, two times lower indicators were achieved in Yevpatoria (118.4 thousand people) and Alushta (102.0 thousand people).
4. Recreation facilities dominate in the number of facilities, the number of rooms and the number of bed places in absolute regional figures of the Republic of Crimea.
At the same time, health resorts, despite being small in number, earn more than 70 % of the income from the services in the total income of specialised accommodation facilities, are accountable for 67.31 % of the number of overnight stays and
57.14 % of the number of accommodated persons. So, we can conclude that the stay of recreants in recreation facilities is shorter in time compared to staying in health resorts, covers a smaller number of the arriving population and represents a cheaper segment of the tourist and recreational services market.
At the second stage we analysed indicators of the concentration of health resort activity:
• the number of health resorts per unit area of the urban district, units/10 km2;
• the number of rooms in health resorts per unit area of the urban district, units/ km2;
• the number of bed places in health resorts per unit area of the urban district, units/km2;
• the number of overnight stays in health resorts per unit area of the urban district, units/km2;
• the number of persons accommodated in health resorts per unit area of the urban district, people/km2;
• income from the provided health and resort services received from the unit area of the urban district, million rubles/km2.
We believe that these indicators most accurately reflect the concentration of health and resort activities, since the urban districts of the Republic of Crimea differ significantly in size. In particular, Alushta (599.9 km2), Sudak (539.5 km2) and Yalta (282.9 km2) are characterised by a large area, while Yevpatoria (65.5 km2) and Saki (28.7 km2) are quite compact.
The selected indicators illustrate the process of concentration of health resort activity, as well as its performance from different angles (Tables 4, 5). In particular, they tell about:
• the infrastructure of health resorts that has developed in the urban districts (the number of facilities, the number of rooms and the number of bed places);
• preferences of those receiving health and resort services (number of overnight stays and number of persons accommodated in health resorts);
• the performance of the health resorts in a specific territory (income from the services provided).
Using the above indicators, we assessed the degree of concentration of health and resort activities in the urban districts of the Republic of Crimea, based on official statistical information (Yalta, Yevpatoria, Alushta, Saki, Sudak). For six urban districts (Feo-dosia, Simferopol, Kerch, Armyansk, Krasnoperekopsk, Dzhankoy), such an analysis cannot be performed due to either the complete absence of the observation object or the insignificance of its size, and therefore, absence of information published by statistical autorities in order to ensure the confidentiality of primary statistical data.
Table 4. Partial indicators for calculating the aggregates of the health resort activity concentration in the urban districts of the Republic of Crimea, 2021
Urban district Area, km2 as of December 31,2020 Health resorts
Number of facilities per 10 km2, units /10 km2 Number of rooms per 1 km2, units/km2 Number of bed places per 1 km2, units/km2 Number of overnight stays, units/km2 Number of persons accommodated, persons/km2 Income from the provided services, million rubles/ km2
Yalta 282.9 1.59 25.18 53.31 9,048.43 808.06 37.49
Yevpatoria 65.5 4.58 101.74 221.56 27,958.78 1,807.63 44.53
Alushta 599.9 0.27 5.49 12.37 2,299.05 1 70.03 5.02
Saki 28.7 2.79 62.86 115.02 26,829.27 1,902.44 113.07
Sudak 539.5 0.06 1.63 3.09 540.87 40.59 1.06
Republic of Crimea 26,081.6 0.04 0.80 1.69 274.67 20.40 0.80
Source: own compilation based on the data from Regions of the Republic of Crimea in 2020. Statistical Yearbook. (2021). Simferopol: Krymstat Publ., p. 11. (In Russ.)
Table 5. Transformed partial indicators and the aggregates of the health resort activity concentration in urban districts of the Republic of Crimea, 2021
Urban district Health resorts Sum of transformed selected indicators Aggregate of the health resort activity concentration For reference: the share of employees in the sector of health and social services, % of the total number of employees
Number of facilities per 10 km2, units /10 km2 Number of rooms per 1 km2, units/km2 Number of bed places per 1 km2, units/km2 Number of overnight stays, units/km2 Number of persons accommodated, persons/km2 Income from the provided services, million rubles/km2
Yalta 39.75 31.48 31.54 32.94 39.61 46.86 222.18 37.03 28.78
Yevpatoria 114.50 127.18 131.1 101.79 88.61 55.66 618.84 103.14 34.14
Alushta 6.75 6.86 7.32 8.37 8.33 6.28 43.91 7.32 35.20
Saki 69.75 78.58 68.06 97.68 93.26 141.34 548.67 91.45 42.70
Sudak 1.50 2.04 1.83 1.97 1.99 1.33 10.66 1.78 19.98
Republic of Crimea - - - - - - - - 15.45
Since the selected partial indicators represent values that differ in the method of measurement and characterise the concentration of health resort activity from different angles, we normalized indicators in order to ensure their comparability by calculating the ratio between the indicator value for the urban district to the regional average for the Republic of Crimea.
The values of transformed partial indicators and aggregates of the concentration of health resort activity in the urban districts of the Republic of Crimea are presented in Table 5. The highest aggregate was recorded in the urban districts of Yevpatoria (103.14) and Saki (91.45). Despite the fact that they did not occupy leading positions in absolute terms, the picture has changed taking into account their compact areas. The third value in terms of the concentration belongs to Yalta (37.03), followed by Alushta (7.32) with a noticeable lag.
We also found a connection between the values under consideration and the share of health care in the sectoral structure of the municipalities' economies. In particular, Yevpatoria and Saki recorded the highest value of the share of people employed in healthcare from the total number of people employed - 34.14 and 42.70 %, respectively.
The results obtained show that Sudak is currently not included in the group of urban districts of a health resort type, since recreation and tourism organisations are more represented and function most effectively in its territory. For the purposes of our study, we classified this settlement as an "urban district dominated by a tourist industry".
Thus, the objects of the further analysis will be four urban districts of the Republic of Crimea, which with good reason can be attributed to the urban districts of a health resort type - Evpatoria, Saki, Yalta and Alushta.
Transformations in the economy of urban districts of a health resort type
in the Republic of Crimea
Let us consider the processes of structural and industrial transformation of the municipal economies of urban districts of a health resort type in the Republic of Crimea.
Conclusions about the stability of regional specialisation will be scientifically reasoned and verified if we examine the dynamics of the industrial structure indicators over a sufficiently long period of time. In this paper, the arguments and conclusions are based on the collected and systematised official statistical information on the development of the Crimean Peninsula's economy for more than eighty years - from 1935 to 2021.
Obtaining comparable information for this time period was fraught with certain difficulties.
Firstly, the territory in question was changing its state, administrative and political status, the institutional background was also altering. In particular, in 1935, the object of the study was delineated by the borders of the Crimean ASSR as part of the USSR, in 2000 - the Autonomous Republic of Crimea as part of Ukraine, in 2021 -the Republic of Crimea as part of the Russian Federation. The need to collect indicators on the territories of different states has created difficulties in obtaining comparable values.
Secondly, during the studied period, there was a transition to international accounting standards. In particular, the primary accounting unit ceased to be the industries of the national economy (All-Union Classifier of National Economy Industries (OKONH system)), giving way to types of economic activity (Russian Classification of Economic Activities (OKVED system)), and only the recalculation of absolute and relative values allowed us to obtain data on the enlarged industrial structure in comparable terms.
The indicators of the industrial structure of urban districts collected for 87 years (1935-2021), calculated by the number of employed persons, allow us to identify sectors of the economy that developed inertially, as well as sectors that have undergone serious changes as a result of transformational processes.
The transformations that took place in the economic structure of urban districts of a health resort type in 1935-2021 proceeded in different directions, however, the following general trends and relationships can be distinguished.
1. Stable dominance of health care and the health resort activities in the sectoral structure of the economy of municipalities - urban districts of a health resort type.
During the period under review, this industry was town-forming in three of the four studied urban districts - Yalta, Yevpatoria, Alushta (Table 6). Thus, according to data for 1987, 26.6 % of workers were employed in the resort economy of Yevpatoria, while the services sector created 46.3% jobs in the economy1. In the fourth urban district - Saki, according to the statistical indicators as of 2021, the dominance of a health resort activity in economic processes was also notable.
For 87 years, in three of the four urban districts of a health resort type, the proportion of people employed in the sector of health and social services has increased markedly (Saki - by 39.22 %, Yevpatoria - by 7.62 %, Alushta - by 0.7 %).
1 Comprehensive plan of economic and social development of the city of Yevpatoria for 1986-1990 and for the period up to 2000. Sections I-VI. Evpatoria, 1987. p. 39. (In Russ.)
Table 6. Industrial structure of urban districts of a health resort type in the Republic of Crimea, 1935-2021 (by the number of people employed), %
Type of economic activity 1935 2000 2021 Change from 1935 to 2021
Yalta
Agriculture, forestry, hunting, fishing and fish farming 5.2 2.10 0.46 -5.16
Transportation and storage 7.36 7.86 3.57 -3.79
Manufacturing industries 9.43 5.55 10.06 0.63
Construction 11.75 6.24 2.69 -9.06
Wholesale and retail trade; repair of motor vehicles and motorcycles 7.30 3.97 3.59 -3.71
Finance and insurance 0.63 0.99 0.58 -0.05
Professional activities, including scientific and technical 0 3.15 3.52 3.52
Public administration and military security; social security 6.29 2.15 7.14 0.85
Education 4.21 7.20 17.94 13.73
Activities in the field of health care and social services 28.2 32.97 28.78 0.26
Cultural activities, sport, organisation of leisure and entertainment 1.66 2.14 4,34 2.68
Provision of other services 17.23 25.69 17.32 0.09
Total by urban district - 100 100 -
Yevpatoria
Agriculture, forestry, hunting, fishing and fish farming 9.22 0.12 0.41 -8.81
Transportation and storage 5.47 9.17 4.96 -0.51
Manufacturing industries 14.39 10.8 12.88 -1.51
Construction 10.28 3.84 0.58 -9.7
Wholesale and retail trade; repair of motor vehicles and motorcycles 10.00 4.35 6.86 -3.14
Finance and insurance 1.25 0.92 0.95 -0.3
Professional activities, including scientific and technical 0 0.24 1.12 1.12
Public administration and military security; social security 4.50 3.24 14.43 9.93
Education 7.47 13.30 17,77 10.3
Activities in the field of health care and social services 26.52 29.70 34.14 7.62
Cultural activities, sport, organisation of leisure and entertainment 1.26 2.26 2.59 1.33
Provision of other services 9.64 22.09 3.30 -6.34
Total by urban district 100 100 100 -
Saki
Agriculture, forestry, hunting, fishing and fish farming 3.11 0.56 4.00 0.89
Transportation and storage 10,.0 1.10 0.76 -9.74
Manufacturing industries 42.27 27.49 21.40 -20.90
Construction 14.13 3.60 0.92 -13.20
Wholesale and retail trade; repair of motor vehicles and motorcycles 9.00 9.26 3.09 -5.91
Finance and insurance 0.46 0 0.29 -0.17
Professional activities, including scientific and technical 0 0.68 2.00 2.00
Table 6 (concluded)
Type of economic activity 1935 2000 2021 Change from 1935 to 2021
Public administration and military security; social security 4.50 4.32 10.20 5.66
Education 1.61 15.08 9.05 7.44
Activities in the field of health care and social services 3.52 12.99 42.70 39.22
Cultural activities, sport, organisation of leisure and entertainment 1.04 1.24 1.24 0.20
Provision of other services 9.86 23.68 4.40 -5.6
Total by urban district 100 100 100 -
Alushta
Agriculture, forestry, hunting, fishing and fish farming 23,28 12.15 1.56 -21.72
Transportation and storage 0.46 5.68 2.42 1.96
Manufacturing industries 5.75 3.94 18.70 12.95
Construction 10.16 4.40 0.22 -9.94
Wholesale and retail trade; repair of motor vehicles and motorcycles 5.83 4.79 4.21 -1.62
Finance and insurance 1.50 1.21 0.21 -1.29
Professional activities, including scientific and technical 0 0.12 0.82 0.82
Public administration and military security; social security 3.71 3.61 6.46 2.75
Education 4.12 11.04 13.30 9.22
Activities in the field of health care and social services 34.49 21.01 35.20 0.70
Cultural activities, sport, organisation of leisure and entertainment 0.33 2.17 4.34 4.01
Provision of other services 10.37 29.88 12.50 2.16
Total by urban district 100 100 100 -
Source: own compilation based on the data from Statistical handbook of the national economy and culture of the Crimean ASSR. (1936). Simferopol: Department of National Economic Accounting of the Crimean ASSR, pp. 182-184. (In Russ.); Regional indicators of the development of the Autonomous Republic of Crimea (2001). Simferopol: Derzhkomstat of Ukraine, Chief Department of Statistics in the Autonomous Republic of Crimea, pp. 11-13; Passport of the municipality. Federal State Statistics Service. https://www.gks.ru/scripts/db_inet2/passport/munr.aspx?base=munst35 .
During the period under review, we can notice clear trend in the development of the municipal economy of urban districts of a health resort type. Benefiting from competitive advantages is increasing by involving a unique local resource base in economic turnover, as well as the formation of a health economy, the importance of which has increased many times in the conditions of the COVID-19 pandemic.
Thus, the most significant strengthening of health resort activity is observed in urban districts focused on the development of the local resource base or possessing unique natural resources (such as peloids in Saki and Yevpatoria, widely known outside the Crimean Peninsula).
In resort towns, this activity is town-forming, plays a vital role in filling local budgets and forms the core of the 'genetic code' of the municipal economy, which has passed the test of time.
2. Changes in the territorial structure of health and resort activities in the space of the Crimean Peninsula.
The strengthening of the positions of the health resort industries in Yevpatoria, Saki and Alushta led to the relocalisation of the centers, and decreased the dominance of the Yalta resort and climatic area (Table 7). In 1934, 61.50 % of the regional volume of overnight stays in health resorts were concentrated in this area (or 4,397.6 thousand units), and in 2021 - 35.73 % (or 2,559.8 thousand units), the decline amounted to 25.77 % (- 1837.8 thousand units in absolute terms). On the contrary, they have increased their importance in the health resort area "Evpatoria - Saki" - up to 12.62 % (from 1,693.9 to 2,601.3 thousand units) and Alushta - by 12.00 % (from 518.6 to 1,379.2 thousand units).
Table 7. Territorial distribution of people improving health in health resorts of the
Republic of Crimea, 1934-2021
Resort and climatic areas Number of overnight stays in health resorts, thousand units
absolute values, thousand units % to the region-wide value
1934 2018 2021 Change from 1934 to 2021 1934 2018 2021 Change from 1934 to 2021
Yevpatoria - Saki 1,693.9 2,422.3 2,601.3 907.4 23.69 40.9 36,.1 12.62
Yalta 4,397.6 2,141.5 2,559.8 -1,837.8 61.50 36.16 35.73 -25.77
Alushta 518.6 797.5 1,379.2 860.6 7.25 13.47 19.25 12.0
East coast (Sudak, Feodosia) 540.1 406.3 414.8 -125.3 7.55 6.86 5.79 -1.76
Republic of Crimea 7,150.2 5,922.2 7,163.9 13.7 100 100 100 0
Source: own compilation based on the data from Statistical handbook of the national economy and culture of the Crimean ASSR. (1936). Simferopol: Publication of the Department of National Economic Accounting of the Crimean ASSR, p. 161. (In Russ.); Activities of collective accommodation facilities for municipalities of the Republic of Crimea for 2021. Statistical Bulletin. (2022). Simferopol: Krymizdat Publ.; Individual request data from the Office of the Federal State Statistics Service for the Republic of Crimea and Sevastopol. (In Russ.)
The Eastern coast of Crimea, whose key positions are determined by Sudak and Feodosia, has reduced its importance in health and resort services due to the reorientation of these loci to the tourist industry development.
We should note that in absolute terms, the number of overnight stays in health resorts of the Crimea for 88 years (1934-2022) has not changed significantly and amounted to a little more than 7 thousand.
3. Exclusion of industries that pollute the environment and hinder the development of health resort activities from the structure of municipal economies.
Until 1917, the economy of the Crimea was predominantly agrarian, but after the industrialisation of the Crimean region during the pre-war five-year plans, it became industrial-agrarian. Industry in Crimea developed through the use of local raw materials: iron ore, salt wealth, building materials, various agricultural raw materials1.
For example, the emergence of the chemical industry is associated with unique salt deposits, which in 1916 allowed to begin the production of bromine in small batches on the basis of the resources of the Saka Lake. In Soviet times, large-scale production of bromine, bromide salts, and magnesium chloride was organised at the first chemical enterprise - the Saki Chemical Plant [Simchenko, Tsekhla, 2016, p. 141].
However, in 1991, a resolution of the Supreme Council of the Crimean ASSR "On the environmental situation associated with the activities of chemical industry enterprises and urgent measures to improve the environmental situation in Crimea" was adopted2, according to which the work of chemical enterprises was recognised as incompatible with recreational tasks of a unique region and further placement of new economic entities of given profile and expansion of existing economic entities was excluded.
In particular, a chemical plant in Saki and experimental mechanical and foundry-galvanising plants in Yevpatoria stopped functioning. These changes led to a decrease in the share of industrial production in the structure of the municipal economy: Saki - by 20.92%, Yevpatoria - by 1.51% for 1935-2021.
Concurrently, there was no sharp decline in the relative importance of industrial production in the Yalta and Alushta urban districts due to the active development of the food industry, which uses local resources as raw materials and creates products to meet the demand of both local and arriving populations, as well as sales outside the region. For example, in Yalta and Alushta, the production of wines from local grape varieties is actively developing (OOO "Livadia Wines", PAO "Massandra"), OOO "Yevpatoria Classic Wine Factory" operates in Yevpatoria.
In addition, the production of bakery and confectionery products is actively developing (Yalta Bakery, Yevpatoria Bakery - branches of AO Krymkhleb), meat products (Yalta Meat Factory; OOO Rikon, Saki), mineral water (OOO Crimean Waters, Saki), ice cream (OOO "AGRO", Saki), perfumes and cosmetics (Yalta, Saki, Alushta), as well as milk processing (OOO "Beg", Alushta).
1 See, for example: Statistical and economic atlas of the Crimea. (1922). Simferopol: Krymizdat Publ. (In Russ.); National economy of the Crimea. Market review. (1925-1929). Simferopol: Krymplan Publ. (In Russ.); Popov S. P. Crimea: Productive forces. (1929). Simferopol: Krymgosizdat Publ. (In Russ.)
2 Bulletin of the Supreme Soviet of the Crimean ASSR. July 20, 1991 no. 81-1, Article 64. (In Russ.)
4. Stimulating the development of related activities in the territories of urban districts (multiplier effect).
Health resort and tourist recreational activities act as multipliers, forming impulses for the development of related segments of the municipal economy in a limited locus - spheres of circulation (wholesale and retail trade) and services (hotels and catering establishments, cultural, sports, leisure and entertainment organisations) (Table 8).
Table 8. Concentration of the services sector institutions in the Republic of Crimea, 2020
(multiplier effect)
Number of enterprises and organisations per 10 thousand inhabitants
Functional specialisation Number Structure Wholesale and retail trade Hotels and catering establishments Health care Culture, sports, leisure and entertainment organisations
Urban districts of a health resort type 4 Yalta, Yevpatoria, Alushta, Saki 30.41 22.87 10.07 5.48
Urban district dominated by a tourist complex 1 Sudak 16.14 25.77 3.73 5.59
Seat of regional government 1 Simferopol 88.34 13.82 11.79 5.70
Port and industrial center with a developed resort function 1 Feodosia 24.89 16.99 5.80 5.80
Port and industrial center 1 Kerch 13.03 4.74 3.95 2.04
Industrial center 2 Armyansk, Krasnoperekopsk 7.47 1.66 2.49 2.28
Transport hub 1 Dzhankoi 19.25 3.21 4.81 1.87
The average value for the Republic of Crimea 29.91 9.92 5.74 3.46
Source: own compilation based on the data from Regions of the Republic of Crimea. Statistical Yearbook. (2020). Simferopol: Krymstat Publ., pp. 11, 230-236. (In Russ.)
In the urban districts of a health resort type of the Republic of Crimea, we see significantly higher concentration of hotels and catering establishments (2.3 times), health care facilities (1.8 times), cultural, sports, leisure and entertainment organisations (1.6 times), wholesale and retail trade (1.02 times) compared to the regional average. Municipalities with a different functional specialisation are significantly behind in this indicator: port and industrial (Kerch) or industrial (Armyansk, Krasnop-erekopsk) centers, transport hub (Dzhankoy).
Factors and conditions behind the predicted transformations in the economy of urban districts of a health resort type in the Republic of Crimea
Let us outline the prospects for structural and industrial transformations of the economy of urban districts of a health resort type in the Republic of Crimea, based on the fact that modern geopolitical processes are an important factor in these transformations.
Researchers note that the functioning and development of health resort and tourist activities largely depends on the geopolitical situation in the world, which determines the socioeconomic and political well-being of the territories of the resorts and neighboring regions [Layko, 2014; Simchenko, Tsekhla, 2016; Maydanevich, 2019].
This dependence manifested itself after the start of Russia's special military operation in Ukraine in February 2022. According to experts, due to logistical problems associated with the closure of flights, the tourist flow to the Crimean Peninsula decreased by 40-50 %*. Regional authorities predicted that in 2022 the Republic of Crimea will be visited by about 3 million fewer people than in 2021. Experts in the hotel industry state that about 15-20 % of facilities are forced to be closed for conservation in order to reduce losses, and revenue due to low prices has nosedived even in hotels with relatively high occupancy. Experts' forecasts for 2023 and beyond are also directly determined by the probability of restoring air passenger traffic, since alternative routes to Crimea are not suitable for many potential tourists, increasing their physical, time and transport costs.
Currently, only preliminary conclusions can be drawn about the impact of geopolitical processes caused by the start of a special military operation on the economy of the Republic of Crimea and the functioning of its health and resort activities. The following are the results of the analysis of official operational statistics.
The changes in the consumer market of goods and services is a sensitive indicator of the success of the health resort and tourism industries, since the arriving population considerably increases the effective demand for consumer goods and services.
Analysis of changes in key indicators of the consumer goods and services market of the Republic of Crimea from January to September 2021-2022, calculated at comparable prices (Table 9) suggests a noticeable drop in retail trade turnover in September 2022 (by - 11.8 %) and the volume of paid services to the population (by - 23.7 %) compared to the same period in 2021. Among paid services, the services of specialised collective accommodation facilities were highlighted - their sizes decreased by
1 Gasparyan T. There were not enough vacationers in Crimea. Kommersant. The Kuban-Black Sea Regional Edition, September 14, 2022. https://www.kommersant.ru/doc/5557342 (In Russ.); Rosturizm summed up the preliminary results of the summer season in Crimea. RIA novosti. https://crimea.ria.ru/20220912/rosturizm-podvel-predvaritelnye-itogi-letnego-sezona-v-krymu-1124474807.html (In Russ.)
33.0 %, including health resorts - by 28.7 %. In general, from January to September, the services of these organisations 'sank' by 19.5 %.
Table 9. Changes in key indicators of the consumer goods and services market in the Republic of Crimea from January to September 2021-2022 (in comparable prices)
2022, % compared to the same
Indicator period of 2021
September January -September
Retail trade turnover 88.2 97.4
Volume of paid services to the population, 76.3 91.8
including services of travel agencies, tour operators, other booking services and related services 76.6 110.6
hotel services and similar services for the provision of 76.5 76.6
temporary accommodation
medical services 52.8 89.1
services of specialised collective accommodation 67.0 71.5
facilities,
including health resorts 71.3 80.5
Source: own compilation based on the data from Socioeconomic situation of the Republic of Crimea in January - August 2022. (2022). Simferopol: Krymstat Publ., pp. 4, 29. (In Russ.)
The monthly dynamics of the indices of the physical volume of retail trade, food services, paid services to the population in the Republic of Crimea from January to September 2021-2022 clearly illustrates the turning point - April 2022, when the protracted nature of political confrontation in neighboring territories became clear (Table 10). At the peak of the holiday season, in June - August 2022, the indicators seriously lagged behind 2021, which indicates a decrease in the influx of visitors due to the manifestation of the geopolitical factor.
According to a survey of businesses' leaders, the key reasons behind the limited activities of the service sector organisations in the third quarter of 2022, were "uncertainty of the economic situation", "insufficient demand for this type of service" and "lack of financial resources"1.
Financial performance of organisations in the goods and services market of the Republic of Crimea from January to August 2021-2022 (Table 11) confirm the conclusions made earlier. During this period, profits for the following types of economic activity fell dramatically: "activities of hotels and food services enterprises" - by 77.8 percentage points; "activities in tourism" - by 68.2 percentage points; "activities in the sector of health and social services" - by 56.9 percentage points.
1 Socioeconomic situation of the Republic of Crimea in January - September 2022. (2022). Simferopol: Krymstat Publ., p. 32. (In Russ.)
Table 10. Indices of physical volume of retail trade, food services, paid services to the population in the Republic of Crimea for January - September 2021-2022, % compared to
the corresponding period of the previous year
Month Retail turnover Turnover of food services Paid services to the population
2021 2022 2021 2022 2021 2022
January 97.1 113.5 103.6 123.5 107.7 122.1
February 100.5 109.2 103.6 121.9 105.9 125.2
March 99.1 104.3 107.0 111.4 120.8 103.9
April 149.8 95.3 379.8 98.8 218.4 94.1
May 128.3 100.6 907.3 89.6 195.2 92.9
June 115.7 97.8 561.6 93.4 169.2 84.0
July 108.2 89.2 120.2 77.8 126.5 80.1
August 109.5 89.2 100.2 96.4 118.6 84.7
September 106.9 88.2 96.6 77.4 116.4 76.3
Source: own compilation based on the data from Socioeconomic situation of the Republic of Crimea in January - August 2022. (2022). Simferopol: Krymstat Publ., pp. 22, 27, 28. (In Russ.)
Table 11. Financial performance of organisations in the goods and services market of the Republic of Crimea for January to August 2021-2022
Types of economic activity Net financial result (profit minus loss), million rubles Profit of organisations Loss of organisations
share of profitable organisations, % profit margin, January -August 2022, % to the corresponding period of 2021 share of unprofitable organisations, % loss, January - August 2022, % to the corresponding period of 2021
Retail trade, except for trade in motor vehicles and motorcycles 3,490.9 80.0 96.7 20.0 31.7
Hotels and food services -66.4 37.0 22.2 63.0 394.7
Health and social services 699.6 61.4 43.1 38.6 677.1
Tourism 551.0 53.8 31.8 46.2 462.8
Source: own compilation based on the data from Socioeconomic situation of the Republic of Crimea in January - August 2022. (2022). Simferopol: Krymstat Publ., pp. 53-58. (In Russ.)
The share of profitable hotels and food services enterprises amounted to only 37.0 % of their total number; in tourism, this figure reached 53.8 %, in the sector of health and social services - 61.4 %.
The express analysis of operational statistical information testifies to the serious impact of modern geopolitical processes on the socioeconomic development of the
Republic of Crimea, as well as the functioning of economic entities of the tourist and recreational industries in general and the health resorts in particular. The nature of transport logistics in 2023 directly depends on the change in the political situation. Currently, it is quite difficult to predict when the air service will be opened, which hinders management decisions on the development of the health resort and tourist business, on the investment of new projects.
The results of the study suggest that health resort activity acts as a kind of 'genetic code' of the economic and social development of the Republic of Crimea, an important element of regional sustainability. The preservation of this economic sector creates conditions for the stability of the life of the entire peninsula.
In modern conditions, state support of the tourist and recreational industries of the region is vital. In this regard, the Government of the Russian Federation has made a very important and timely decision to allocate 1.6 billion rubles from the reserve fund in 2022 to provide subsidies to the Republic of Crimea (1,497 billion rubles) and Sevastopol (113.5 million rubles). Thanks to this measure, the regions can issue a one-time payment to at least one and a half thousand economic entities in the sphere under consideration.
Conclusion
The findings prove the existence of processes of structural and industrial transformation of the economy of unique settlements - urban districts of a health resort type located in the territory of the Republic of Crimea.
The study of the region evolution shows that the most noticeable changes are closely related to a set of institutional factors - the state geostrategic interests, the world geopolitical situation, the political situation in neighboring territories.
The revealed structural shifts made it possible to identify a stable 'genetic code' of the studied municipalities, namely the dominance of the health care sector due to the development of health resort activities based on the use of unique natural healing factors (balneological and marine resources, peloids, landscape and climatic conditions, etc.).
The empirical material we have collected confirms the existence of a close connection between the upward dynamics of the development of health resort activities and economic growth, economic well-being of municipalities and the entire region of their localisation - the Republic of Crimea. The economic activity and economic dynamics of resort towns largely depend on the inbound flow of visitors who seek to receive treatment and health improvement services.
Finally, let us point to that federal authorities, as well as regional authorities of the Republic of Crimea and local governments, when developing strategic documents
and choosing areas of support, should take into account the need to maintain the unique specialisation of the region and its municipalities.
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Information about the authors
Yakov P. Silin, Dr. Sc. (Econ.), Prof., Rector, Prof. of Regional, Municipal Economics and Governance Dept. Ural State University of Economics, Ekaterinburg, Russia. Email: [email protected]
Natalya V. Novikova, Dr. Sc. (Econ.), Associate Prof., Prof. of Regional, Municipal Economics and Governance Dept. Ural State University of Economics, Ekaterinburg, Russia. E-mail: [email protected]
Olesya V. Kharitonenko, Applicant for Candidate Degree of Regional, Municipal Economics and Governance Dept. Ural State University of Economics, Ekaterinburg, Russia. E-mail: [email protected]
© Silin Ya. P., Novikova N. V., Kharitonenko O. V., 2023
