www.ssoar.info

Cross-border shopping at the EU's Eastern edge: the cases of Finnish-Russian and Polish-Ukrainian border regions Smętkowski, Maciej; Németh, Sarolta; Eskelinen, Heikki

Veröffentlichungsversion / Published Version Zeitschriftenartikel / journal article

Empfohlene Zitierung / Suggested Citation: Smętkowski, M., Németh, S., & Eskelinen, H. (2017). Cross-border shopping at the EU's Eastern edge: the cases of Finnish-Russian and Polish-Ukrainian border regions. Europa Regional, 24.2016(1/2), 50-64. https://nbn-resolving.org/ urn:nbn:de:0168-ssoar-54419-5

Nutzungsbedingungen: Terms of use: Dieser Text wird unter einer Deposit-Lizenz (Keine This document is made available under Deposit Licence (No Weiterverbreitung - keine Bearbeitung) zur Verfügung gestellt. Redistribution - no modifications). We grant a non-exclusive, non- Gewährt wird ein nicht exklusives, nicht übertragbares, transferable, individual and limited right to using this document. persönliches und beschränktes Recht auf Nutzung dieses This document is solely intended for your personal, non- Dokuments. Dieses Dokument ist ausschließlich für commercial use. All of the copies of this documents must retain den persönlichen, nicht-kommerziellen Gebrauch bestimmt. all copyright information and other information regarding legal Auf sämtlichen Kopien dieses Dokuments müssen alle protection. You are not allowed to alter this document in any Urheberrechtshinweise und sonstigen Hinweise auf gesetzlichen way, to copy it for public or commercial purposes, to exhibit the Schutz beibehalten werden. Sie dürfen dieses Dokument document in public, to perform, distribute or otherwise use the nicht in irgendeiner Weise abändern, noch dürfen Sie document in public. dieses Dokument für öffentliche oder kommerzielle Zwecke By using this particular document, you accept the above-stated vervielfältigen, öffentlich ausstellen, aufführen, vertreiben oder conditions of use. anderweitig nutzen. Mit der Verwendung dieses Dokuments erkennen Sie die Nutzungsbedingungen an. Europa Regional 24, 2016 (2017) I 1-2

Cross-border shopping at the EU’s eastern edge – the cases of Maciej Smętkowski, Sarolta Németh, Heikki Eskelinen: Cross- Finnish-Russian and Polish-Ukrainian border regions border shopping at the EU’s eastern edge Maciej Smętkowski, Sarolta Németh and Heikki Eskelinen

Abstract Zusammenfassung - Grenzüberschreitendes Einkaufen an der Ostgrenze der EU - – die Grenzregionen Finnland-Russland und Polen- This paper investigates cross-border shopping across the Finn - ish-Russian and the Polish-Ukrainian borders since the disin - tegration of the from a comparative perspective. Untersucht wird das grenzüberschreitende Einkaufen zwi - Cross-border shopping can be defined in various ways for di schen Finnland und Russland sowie Polen und der Ukraine verse purposes; this study is interested mainly in the condi seit dem Zerfall der Sowjetunion. Es geht hier hauptsächlich - tioning factors, drivers and forms of this activity in addition to um bestimmende Faktoren, Auslöser und Ausprägungen dieser - its volumes and trends in order to understand its implications Tätigkeit zusätzlich zu ihrem Umfang und ihren Trends, um de to cross-border interaction and regional development. It is ob ren Auswirkungen auf den grenzüberschreitenden Austausch - served that cross-border shopping accounts for a substantial und die regionale Entwicklung zu verstehen. Dieses Einkaufen part of all mobility and that cross-border shopping is charac macht einen wesentlichen Teil der gesamten Mobilität aus und terized by comparable fluctuations across both of the studied ist durch vergleichbare Fluktuationen auf beiden Seiten der borders, while the two cases show some specific features, too. untersuchten Grenzen gekennzeichnet, während es in beiden - A common aspect is that during the first years after the regime Fällen auch einige Spezifika gibt. Ein gemeinsamer Aspekt ist, - change, informal economic activities in various forms played a dass in den ersten Jahren nach dem Regimewechsel eine Schat - major role in border crossings in these two regions. Since then, tenwirtschaft in unterschiedlichen Ausprägungen beim Gren ordinary cross-border shopping tourism supported by the at zübergang eine wichtige Rolle gespielt hat. Seit damals hat der tractiveness of the neighbouring country as a travel and leisure normale grenzüberschreitende Einkaufstourismus, der durch destination has grown in importance in the influx of Russians die Attraktivität des Nachbarlands als Reise- und Freizeitziel - into Finland, whereas most shopping visits by to begünstigt wurde, mit dem Zustrom von Russen nach Finnland - continued to be linked to profit-oriented reselling. Also, an Bedeutung gewonnen, während die meisten Einkaufsbesu par- - changes in exchange rates resulting from geopolitical turns and che von Ukrainern nach Polen weiterhin mit gewinnorientier ticularly economic cycles have proved to be factors in both cases, tem Weiterverkauf verknüpft waren. Veränderungen der De in conditioning short and frequent trips from Finland visenkurse stellten sich in beiden Fällen ebenso als Faktoren - to and (mainly) from Ukraine to Poland for utilizing heraus, insbesondere bei den kurzen und häufigen Fahrten - - differences in prices of excise commodities such as fuel and Finnland-Russland und (hauptsächlich) Ukraine-Polen zur Nut cigarettes. Finally, the study also shows that cross-border shop zung von Preisunterschieden bei besteuerten Gütern wie Kraft ping may have direct implications to regional development, as stoff und Zigaretten. Schließlich wird auch darauf hingewiesen, - local-regional policy stakeholders may see it as an asset: the dass grenzüberschreitendes Einkaufen direkte Auswirkungen - - attraction of shopping tourists from Russia has become a key auf die regionale Entwicklung haben kann, da lokale/regiona development strategy in Southeast Finland despite the vulner le Interessenvertreter darin einen wirtschaftlichen Vorteil se ability to changes in geopolitical conditions. hen: Die Anziehung von Einkaufstouristen aus Russland ist in Shopping tourism; border regions; EU’s eastern border; cross- - ­Südost-Finnland trotz der Anfälligkeit für Veränderungen bei border interactions; development of border regions den geopolitischer Bedingungen eine wichtige Entwicklungs strategie geworden. Einkaufstourismus; Grenzregionen; Ostgrenze der EU; grenzüber- schreitender Austausch; Entwicklung von Grenzregionen

50 Maciej Smętkowski, Sarolta Németh, Heikki Eskelinen: Cross-border shopping at the EU’s eastern edge

Introduction Drivers of shopping across a ­border p. 8). It is also worth emphasizing here Cross-border shopping can be defined that each potential visitor interprets the - - in various ways for diverse statistical or Cross-border shopping is a multifaceted existing differences in terms of his or her - - analytical purposes. It may include “any phenomenon, particularly in border ar personal views, that is, what is an attrac purchases made from retailers or provid eas with cultural differences and socio- tive feature for a person can be an unat - ers located in another country, either in economic disparities. As for its motives, tractive one for another. This can be taken - person or via distance selling” (used for the above-mentioned division into rec as a kind of selection mechanism, which instance, when examining issues of con reational and goal-oriented shopping results in a situation where different sumer protection in the Internal Market; is intuitively obvious. On the one hand, forms of cross-border shopping, as also EC 2006, p. 1). An alternative definition shopping can be a supplementary part other forms of border-crossing visits, can by the OECD (2002, p. 147) claims that of a leisure or business visit to the other be common in certain socio-economic or - it occurs when “private individuals buy side of a border (which we may refer to cultural segments of the population and - goods abroad because of lower taxes and as ‘tourism shopping’), but in many cas non-existent in some others. - import them for their own consumption, es it is the primary reason for visiting a In principle, the above distinction be - without declaring them in full in order to neighbouring country (as a ‘shopping tween encouraging and discouraging fac differences avoid paying import duties”. This study tourist’) for utilizing border-related ac tors applies to all forms of cross-border - excludes e-commerce and is not focussed tual and perceived not only in shopping. Nevertheless, assumedly, these so much (or at least, not exclusively) on price, but quality, supplies and other rel conditioning factors and potential drivers - - the tax-rationale behind these instances evant factors (Spierings & van der Velde bear different relevance and influence in - - of ‘small-scale import’. Our interest lies 2013, pp. 7–8). On the other hand, in bor the case when cross-border shopping (re - instead in a diversity of conditioning fac derlands with high economic disparities, lated to reselling the purchases) is a strat tors, drivers and forms of this activity, and including the two cases under considera egy of everyday survival in comparison the ensuing characteristic changes in its tion in this paper, part of cross-border to the case of actual tourism – shopping - volumes and trends particularly in order shopping is linked with informal – yet not tourism motivated by love for variety. For - to understand its implications to (physi necessarily illegal (Koff 2015) – trading instance, in the former case, this activity cal) cross-border mobility and social-cul activities and can be an important source is compared to available opportunities to tural interaction, and thus to specificities of income for many households (Powęska earn additional income from alternative of cross-border regional development. 2008, Bruns et al. 2011). This aspect of sources in the local labour market and it Indeed, cross-border shopping is an cross-border interaction – in the form has to be adapted to the confines of the important element of and motivation for, of ‘bazaar capitalism’ − was particularly border regulations and practices, whereas interaction in many border areas not only visible in the initial period of the socio- in the latter case travel choices are made - in economic terms but also in promoting economic transformation in Central and genuinely up to individual preferences (or socio-cultural encounters and interde Eastern European countries (Smith 1997; tolerance levels of unfamiliarity), and the pendencies (Timothy & Butler 1995; Minghi 1999; Williams & Balaz 2002). level of wealth. - Timothy 2005). This paper investigates In unpacking the phenomenon, Many border regimes, such as the ones - and compares its characteristics, sig Spierings and van der Velde (2008) around the former Soviet Union, have nificance and evolution between south- point out that in addition to the differ been far from stable in terms of the rules - - eastern Finland and the St. Petersburg/ ences in price, quality and assortment and regulations that influence shopping Leningrad Region in Russia and between that may promote cross-border shop behaviour. In addition, the ways how in eastern Poland and . ping, there are also other border-related dividuals see and interpret the existing These two regions along the EU’s eastern differences, such as those in terms of barriers and border-related differences - border provide an interesting setting for accessibility, safety and familiarity that have evolved when they have learnt from comparing the impacts of the disintegra can discourage it. This implies that cross- their experiences through cross-border - tion of the Soviet Union on cross-border border shoppers are recruited from those visits. Both these factors encouraging or - shopping. The paper is structured as fol persons who find a certain destination as discouraging cross-border shopping can lows: a brief discussion on the concep “acceptably unfamiliar” (Spierings and be assumed to be important along the tual approach and the research enquiries van der Velde op.cit, p. 10). According to borders with relative high cultural, socio- - frames the longer, systematic exploration a study on cross-border shopping in 28 economic and institutional differences. of the two case-study regions along the European countries, this aspect of shop Understandably, a threshold to make the - - EU’s eastern border. In the last section, ping “is stressed in particular by some first visit tends to be relatively high on - the findings are compared and summa consumers of the future Members States such a border, but after a visitor has ac rized in a way that both empirical and of Eastern Europe when they go shop quired a certain level of familiarity with theory-laden conclusions are provided. ping in more pleasant stores” (CEC 2004, the local circumstances on the other side, 51 Europa Regional 24, 2016 (2017) I 1-2

Working typology of cross-border shopping and its drivers and conditioning factors

Economic Socio-cultural Administrative

Genuine ‘shopping tourism’ Dierences in prices and Foreign culture and conditions – Requirements, practices and availability of dierent goods attractive or discouraging costs of border crossing and their predictability Perception of goods and services of foreign origin

Cross-border activities Dierences in prices and Social status and utility Requirements, practices and related to petty trade availability of dierent goods of cross-border activities costs of border crossing and their predictability Profitability in terms of local labour market situation

Source: own elaboration by the authors

Tab. 1: Working typology of cross-border shopping and its drivers and conditioning factors

- 2 - the incentives to continue the utilization here are situated along the external bor in Finland). In the following, based on of the existing differences can be signifi der of the European Union: from 1995 such data and specific studies available cant. This supports the development of onwards in the case of Finland and from on informal cross-border activities, the groups of ‘cross-border specialists’, who 2004 in the case of Poland, and they are development of cross-border shopping are often recruited among those who have also Schengen borders from 2001 and is analysed in the two cases focusing on relevant bicultural competences, such 2008 onwards, respectively. In both cases, volumes, motives, number of visitors, and - as language skills. The growth of such the disparities in the average income level the ‘recruitment’ of regular or occasional - - - groups is also fuelled by migratory pro between the neighbouring countries were cross-border shoppers. This analysis - - cesses in border areas. The above argu at considerably high levels after the open derives mainly from the EUBORDERRE - mentation is summarised in the working ing of the border for diverse flows and in GIONS (FP7, 2011–2015) research pro typology for the empirical 1comparison of teraction. However, what should be borne ject, which focused on identifying “chal the two cases: see Table 1. in mind is the fact that while both sides lenges to economic, social and territorial Based on the above, the main research of the studied Polish-Ukrainian border cohesion as well as regional development - questions that guide the comparison of region were among the least developed potentials in3 different borderlands at the the two cases are (1) to what extent cross- areas in their respective countries, the EU’s external frontiers”. (www.euborder - border shopping represents ‘shopping setting is rather different in the case of regions.eu) - tourism’ (shopping being a primary or the Finnish-Russian border. St. Peters The empirical research on cross-border - accompanying leisure activity of holiday burg (surrounded by the separate ad co-operation in these two cases (Finland or business trips abroad) per se, and to ministrative unit of the Leningrad region) and Russia, Poland and Ukraine) was car - what extent it is primarily related to the with the population of five million is the ried out in 2012 and 2013. At that time, informal economy (i.e. cross-border trad second (federal) of Russia, whereas local cooperation was not yet affected by - ers, petty trade); and (2) whether and in the neighbouring region in south-eastern geopolitical challenges related to Russia’s what ways the phenomenon of cross-bor Finland is a sparsely populated industrial annexation of Crimea in 2014 and the 2 In Finland, the consulting firm TAK Ltd (www.tak.fi) in der shopping is seen as a ‘development region which has suffered from a relative - Lappeenranta has specialized in this field of expertise strategy’. decline in recent decades. Cross-border demanded by private and public actors. The findings Comparing the two cases along presented and discussed in the following are based shopping can be of importance for re on the studies conducted by it. For the summary of the EU’s eastern border the key results based on interviews of Russian bor- gional economic growth and employment der-crossers: see TAK (2013), TAK (2014). - 3 The EUBORDERREGIONS project carried out and it thus receives attention in policy- in-depth interviews with key stakeholders of cross- The Finnish-Russian and the Polish- making. For this purpose, data on its vol border co-operation (50 in each case), observati- ons were made as part of four weekly observation Ukrainian border regions investigated umes and forms are collected for official rounds (carried out at the border crossings PL-UA: Medyka- and - and FI-RU: 1 It is worth emphasizing here that this typology and the statistics (as in Poland), or monitored by Vaalimaa-Torfyanovka, Imatra-Svetogorsk and Nuija- following empirical investigation do not include illegal means of case-specific surveys funded maa-Brusnitsnoe), local and national press were revie- cross-border activities such as smuggling. Petty trade wed for identifying various aspects of cross-border by „cross-border specialists’ can be seen semi-legal by regional or interest organizations (as co-operation and interaction, and questionnaires were in the sense that it can be carried out in terms of the collected at an outdoor market in Przemyśl (PL). (For existing rules concerning border crossings, although the details in the data gathering see Németh et al 2015 reselling is typically done informally, without following for the Finnish-Russian case study and Smętkowski the regulations of retail trade. et al 2014 for Polish-Ukrainian case study.)

52 Maciej Smętkowski, Sarolta Németh, Heikki Eskelinen: Cross-border shopping at the EU’s eastern edge

- The Finnish-RussianKuopio case study region FIN Russian intervention in the eastern re S - Joensuu gions of Ukraine, which has had a bearing Jyväskylä N on cross-border interaction and co-opera EST - e RUS e LV tion both at the Polish-Ukrainian and the s Petrozabodsk DK t FINLAND s LT Finnish-Russian border regions. Howev O BY er, based on available statistical data on D PL border crossings it was possible to cover Lappeenranta Lahti the period up to 2014 in both cases (for Lake the location of the case study regions, see Ladoga sections “The Finnish-Russian case” and Kotka “The Polish-Ukrainian case” respectively.) The Finnish-Russian case Helsinki RUSSIA 4 - Sankt-Peterburg Gulf of Finland Most of the current 1340 km long Finn - Tihvin ish-Russian border runs through a very Tallinn Narva thinly populated or uninhabited north ern wilderness. This study focuses on the ESTONIA national border border of region/oblast southernmost (circa 135 km long) stretch Novgorod main road of the border through which the major 0 40 km BorIfLovici 2017 Tartu Authors: H. Eskelinen, S. Németh, M. Smętkowski share of the Finnish-Russian interaction scale 1 : 5500000 Cartographer: R. Schwarz (trade, transit traffic, tourism, etc.) takes place, i.e. between the Finnish regions Fig. 1: The Finnish-Russian case study region Etelä-Karjala and Kymenlaakso and the Leningrad region and the Federal City of - St. Petersburg in Russia (see Fig. 1). The history of this borderland is char that the disintegration of the Soviet Union from each other. The only towns adjacent - acterized by several major turns of events. was a major upheaval, facilitating various to each other on the border are Imatra on - The imperial city of St. Petersburg played forms of cross-border interaction based the Finnish side (pop. 28 000) and Sveto - a particularly important role in the de on spatial proximity and repositioning gorsk on the Russian side (pop. 16 000), velopment of south-eastern Finland for Finland geopolitically, including member which already in the 1990s launched the - more than a century (1809–1917) when ship in the EU. concept of ‘twin town’ for promoting their Finland was a semi-autonomous Grand It is worth emphasizing that the vol co-operation (Eskelinen & Kotilainen - Duchy under the Russian Tsar and the umes and forms of cross-border activity 2005). borderline was very close to St. Peters in this cross-border region (Etelä-Karjala For a long time, the Finnish-Russian - - burg. After the October Revolution and and Kymenlaakso in Finland, Leningrad border has been a dividing line between Finnish Independence in 1917, the bor Region and St. Petersburg in Russia) are two cultural and political systems in Eu der was tightly closed and south-eastern to an important degree conditioned by rope and this setting still prevails today - - Finland turned into a cul-de-sac region. the asymmetry in population numbers. in several respects. The Russian-speaking A few decades later (1940/44), the bor Approximately 95 per cent of the region’s minority in Etelä-Karjala and Kymenlaak der was transferred some 150 km to the total population (7 million people) live so is currently approximately 3 per cent - west and the population of the region on the Russian side of the border and of the total population (Alanen 2015), annexed to the Soviet Union was evacu St. Petersburg alone is comparable to resulting from a modest flow of migrants - ated to present-day Finland. After this Finland as a whole. In terms of spatial since the early 1990s. On the Russian side geopolitical turn, the political and eco structure, however, the Leningrad region of the border, the small Finnish-speaking - nomic relations between Finland and (with the exception of St. Petersburg’s population mainly consists of individuals the Soviet Union were organized on the immediate surroundings) and the neigh who work for Finnish-owned companies basis of treaties orchestrating extensive bouring Finnish regions of Kymenlaakso and other organizations in St. Petersburg. - - Border regime co-operation, but border regions did not and Etelä-Karjala are relatively similar: - have any privileged position in these ar sparsely populated, and the main cit - rangements. It is against this background ies are small – the largest ones Vyborg Even though the permeability of the Finn 4 This section utilizes the data materials and results of the Finnish-Russian case study carried out as part of (pop. 80 000) on Russian side and Lap ish-Russian border has clearly increased the FP7 EUBORDERREGIONS project (Nemeth et al. 2015). peenranta (pop. 72 000) on the Finnish since the early 1990s, it is noteworthy side are at the distance of about 60 km that the treaties for the management of 53 Europa Regional 24, 2016 (2017) I 1-2

the border and co-operation between the favourable geographical location as an other nationalities has remained all the - authorities in charge signed between the important gateway and its institutional time very small). Since then, the number Soviet Union and Finland in their renewed status as Russia’s second (federal) city. and percentage of Russians increased al - forms still guide the border-crossing In this setting, the regional economy has most continuously until 2013 when the - practices. From the point of view of a visi benefited from major public investments total number was 12.9 million crossings, - - tor to/from Russia, what has changed is in harbours, roads and other infrastruc approximately 80 per cent of them being that individual tourism is allowed and the tures, and also from investments in in Russians. Some 80 per cent of all travel rouble has become a normal, convertible dustrial production by both domestic and lers between these countries crossed the currency. To a Finnish tourist, the removal foreign firms. border in south-eastern Finland. In 2014, - of the earlier strict travel restrictions in On the Finnish side of the border, the the period of rapid growth turned into a - Russia also are of major importance. south-eastern border regions of Kymen decline when the exchange rate of rouble Finland’s membership in the European laakso and Etelä-Karjala have been un weakened in connection of the Ukrainian - - Union from 1995 onwards did not have dergoing major restructuring processes crisis – the total number of crossings was - any major influence on the number of mainly due to plant closures in their tra down to 11.4 million and the share of Rus crossings due to the fact that there was ditional economic base, particularly in sians declined to 72 per cent. This down 5 - no visa-free period between Finland and the pulp and paper industry. As a result, ward trend has continued in 2015. - Cross-border shopping Russia. More recently, Finland’s partici unemployment rates have risen and the - Visitors from Finland to Russia pation in the Schengen system since 2001 relative standing of these regions in Fin - has in fact improved the possibilities of land has weakened. Due to these contrast - - Russian citizens to travel in Europe as ing trends, the gap between the two sides Tourism during the Soviet era was organ many of them use Finland as a transit of this border in terms of standard eco ized in guided groups, and the strict cus - - route to other countries. However, there nomic indicators such as GDP per capita toms and currency regulations set limits is no Local Border Traffic (LBT) agree has narrowed, especially during the pe to spending in the neighbouring country. - ment in use and there are no initiatives riod from the 2008 financial crisis until Illegal selling of ‘western goods’ such - to introduce such arrangement for facili 2013. However, it is noteworthy here that as jeans and chewing gum for acquiring - tating cross-border interaction. The cost the above outlined convergence in cross- roubles was an important touristic activ - of a visa, which has to be purchased in border economic disparities has not un ity for many Finns visiting Leningrad at - advance, is 40 to 70 euro and many fre dermined incentives for border crossings that time, and it supported the networks - quent travellers use multi-entry visas. in general and cross-border shopping in of the informal economy (Shikalov & Hä Visa-free travel was much discussed be particular. Rather, it can be seen as an mynen 2013). After the regime change in fore the Ukrainian crisis in 2014, and its indication of the rise of a relatively large the early 1990s, individual travelling was - potential impacts were forecasted, but it stratum of Russians who are interested allowed and Finns could buy the so-called - is currently not on the political agenda. in visiting, and can afford to visit, the ‘at Vyborg card, which enabled them to pay The number of offences and irregulari tractively unfamiliar’ neighbouring region a short visa-free visit to this city that had - ties (illegal crossings, forged documents, and country. been the second city of Finland before Border traffic etc.) at the border crossing stations has the Second World War. Many former resi remained small. dents of the city and their descendants Socio-economic conditions In both cases under consideration in searched for their roots there (and also - this paper, Finland-Russia and Poland- hunted for bargains) in the aftermath - The transition period following the col Ukraine, the change of the political and of the collapse of the Soviet Union, but - - lapse of the Soviet Union was difficult economic regime in the eastern neigh this nostalgic tourism soon lost much of - - throughout Russia, including St. Peters bour in the early 1990s, and the result its appeal also partly for the reason that burg and its surroundings. After the cri ing increasing permeability of the border, the Vyborg card was suspended. St. Pe - sis in 1998, the recovery of this Russian have led to a major growth in the number tersburg, for its part, has maintained or border region has been rapid and in terms of border crossings. The sheer figures on even increased its importance as a desti of GDP per capita both these ‘subjects of border crossings reveal a lot on the grand nation due to its size, variety of services - the Federation’ (St. Petersburg and the dynamics of the Finnish-Russian border and sights as well as improved transport Leningrad region) have risen above the since then (see Fig. 2). connections, but for the present purpos - Russian average. This positive change In 1991, the total number of crossings es it has to be emphasized that shopping has been promoted by St. Petersburg’s was 1.3 million, mainly attributable to Finn tourism is not at all a motive for these 5 Short boat trips (Lappeenranta/Vyborg, Helsinki/ - St. Petersburg) have been visa free. For positioning the ish visitors to Russia. In 2000, the number visits. The same is valid for business trips Finnish-Russian visa regime in the Schengen context, see Golunov 2014. was almost 6 million, shared equally be targeting the Russian metropolis, which tween Finns and Russians (the share of also account for a significant share of the 54 Maciej Smętkowski, Sarolta Németh, Heikki Eskelinen: Cross-border shopping at the EU’s eastern edge

Border crossings between Finland and Russia 1994–2014 border crossings from Finland to Russia millions and are due to relatively important trade 14 and investment connections as well as co-operation between civil society and - 12 administrative organizations. Even though neither ‘shopping tour ism’ nor ‘tourism shopping’ (as defined 10 above) play a role in Finnish visits to Finnish-Russian border crossings (TOTAL) Russia, there is a core group of frequent 8 border crossers for economic gain. These Russians visitors, living close to the crossing points, 6 make very short trips for buying fuel and - cigarettes just on the other side of the 4 border. Understandably, this activity de pends on the exchange rate; for instance, - 2 since early 2014, the number of visits - Finns from the Finnish border regions to Rus 0 sia has increased. There is no compre 94 1995 96 97 98 99 2000 01 02 03 04 2005 06 07 08 09 2010 11 12 13 14 hensive data on this very visible form of year cross-border activity; occasional surveys IfL 2017 Draft: H. Eskelinen, S. Németh, M. Smętkowski (e. g., TAK 2002) indicate that in terms of Source: Finnish Border Guard, www.raja.fi Design: R. Schwarz numbers it accounts for more than a half of all crossings from Finland to Russia. Visitors from Russia to Finland Fig. 2: Border crossings between Finland and Russia 1994–2014 -

The disorderly state of the Russian econo my and society had a visible impact on the trips by Russians – varying from 60 to 80 most frequent visitors – 0.2 per cent of the behaviour of Russian visitors in Finland in per cent − are shopping trips followed by persons who paid a visit to Finland from the early 1990s. Many of them had to earn holiday trips. The share of work-related Russia in 2012 made 122 trips a year on 6 - - currency by selling whatever they could or business trips of the total number is average – probably work as carriers for - carry with them on the so called ‘red only 10 per cent or less. In this millen informal cross-border trade. Understand squares’ or ‘shadow squares’, i.e. illegal nium, around 90 per cent of all Russian ably, this flow of informal exports has var markets. This activity was well organized, visitors have come from the two border ied according to how the Russian customs but it largely disappeared in a few years regions, that is, from St. Petersburg and regulations and practices are interpreted - (Nokki 2015, pp. 25–27). As a result, the the Leningrad region, and the share of and implemented. It has also created a - original stigma attached to Russian visi immediate border regions (Vyborg and specific group of short-term visitors, so- - tors as ‘poor pedlars’ – illustrated by sign its surroundings) has clearly fallen. The called ‘kilogrannies’, who come along only - posts reading ‘Russians one at a time’ on share of St. Petersburg has grown consid for circumventing the Russian regulations - shop windows – disappeared, and their erably and it reached 80 per cent in 2012. on the maximum allowed volume of im potential as solvent customers – ‘Rus Notwithstanding this trend, only 21 per ported goods (50 kilograms per person). sian spoken’ − was gradually recognized cent of St. Peterburgians had ever visited In this way, the Finnish-Russian border - - - - (Katajala 1997). Finland according to the 2010 survey. serves as an informal economic resource From the humble beginnings in the ear This implies that frequent visitors ac for some local citizens (Stammler Goss - ly 1990s, the number of trips from Russia count for an important share of the trips. mann 2012). - to Finland through the crossing points In 2010, 35 per cent of respondents vis In addition to weekly commuters for in south-eastern Finland (Etelä-Karjala ited Finland at least once a month and in work and business and the above-men and Kymenlaakso) has grown manifold: 2012, this share was even higher (41 per tioned carriers, frequent border-crossers from 0.2 million in 1992 to 1.1 million in cent). The relatively small group of the include those Russians who have bought - 2000, and further to 4.1 million in 2013. second homes in Finland and stay at these 6 As was already mentioned, the volumes and com- - More recently, however, the downward position of Russian cross-border shopping are not dachas or villas during weekends and hol covered in official statistics in Finland. Notwithstanding turn has been steep; the total number of that, the evolution of this phenomenon has been idays. Most of the over 3000 such proper monitored in detail due to its economic importance in these visits was 3.6 million in 2014 (see the south-eastern border regions. ties bought in 2000–2011 are located in Figure 2). A clear-cut majority of these south-eastern Finland. In addition, some 55 Europa Regional 24, 2016 (2017) I 1-2

- - Russians have bought time-share apart people in the eastern border region speak Ukrainian side, and the rest between the ments. According to Lipkina (2013), Russian. Inside Finland, the main compet Lubelskie Voivodship in Poland and the - Finland represents safety, nature and itor for the south-eastern border region and Oblasts in Ukraine (see positive difference, that is, positive un as the destination for Russian visitors is Fig. 3). Altogether, these border regions familiarity, to a typical Russian second Helsinki, which attracts particularly the occupy an area of 85 000 sq km and have home owner. Understandably, (tourism) shopping tourists interested in more a population of 7.85 million, of which - shopping is an integral part of this way of expensive furniture, fashion and design just more than 50 per cent on the Polish living in these two countries. items. Thus, shopping tourism from Rus side of the border. Its major include As a whole, the surveys on cross-border sia to Finland also acts as a mechanism Lublin (343 000 residents) and Rzeszów shopping trips from Russia to Finland transmitting fashion and consumption (185 000) in Poland, and Lviv (757 000) - - clearly indicate that – notwithstanding styles (Gurova 2015). and (213 000) in Ukraine. Due to the above mentioned cross-border carri When the importance of Russian visi the lack of any distinct differences in the - - ers – it has become primarily a middle- tors for jobs and economic recovery in features of the border traffic which can be - class or even an upper middle-class phe south-eastern Finland was recognized, observed between the Lubelskie and Pod - - nomenon. In 2012, a Russian tourist spent it was given a prominent role in regional karpackie Voivodships with their neigh 303 euro/trip for goods and services in and local development initiatives. Region bouring Ukrainian regions, the character - Finland on average. This sums up to the al actors forecasted the prospects of this istics of the border interaction described - total volume of 1154 million (879 million activity, especially in the case of poten below refer to the entire length of the - euros on products and 274 million on ser tial visa-free travel. In addition, Russian border, whereas the selected qualitative - vices). The largest item groups were food shopping tourism was given a visible role analyses relate only to the Podkarpackie stuffs and clothing, followed by household in land use planning, but this was not ac Voivodship and the ; both of - - goods and shoes. As for services, the bulk cepted by the authorities in charge at the which were subject of field research as of the spending goes to cafes and res ministerial level (Fritsch & Eskelinen part of the EUBORDEREGIONS FP7 pro - taurants, accommodation and spas. This 2015). More recently, since early 2014, ject. - demand has led to major investments in however, the interest in this potential re The analysed cross-border region has areas close to the border where the ca gional growth sector has diminished for a long shared history dating back to the pacity constraints of shopping and other the obvious reason that the value of the eleventh century, being a part of the - tourism facilities were more binding than rouble has declined. As a result, the flow Polish Kingdom and its successors, the - in the Helsinki region, at two hours’ drive of Russian visitors has declined and fu Polish-Lithuanian Commonwealth, the - from the border. An illustrative example is ture prospects remain uncertain. Interest Austro-Hungarian Empire (the southern Holiday Club Saimaa in Imatra, which, in ingly, this turn in the volatile evolution of part of the region in focus) in the pe addition to a spa hotel and holiday resort cross-border shopping has revealed how riod 1772–1918 and the Second Polish - - (opened in November 2011 with 1300 different forms of cross-border economic Republic before the Second World War. - beds and rentable villas), also incorpo interaction are linked to each other in a The region in focus here was not perma rates a shopping centre and a golf court. complex fashion. Russian shopping tour nently divided between Poland and the - Typical Russian visitors are the young and ism in Finland and Finnish investments Soviet Union (and Ukraine following its - middle‐aged, especially families with chil in the retail sector in St. Petersburg have demise) until in the wake of the Second dren, combining shopping and leisure in created a segment of Russian custom World War and the . The Finland. ers who are well familiar with Finnish establishment of the border afterwards - What comes to the reasons for shopping food. Since imports to Russia have been severed the historical socio-economic tourism to Finland among relatively well- banned, cross-border carriers have found ties and significantly disrupted the settle - to-do population in St. Petersburg and its a niche by carrying food from Finland for ment system that had evolved as a result surroundings, both rational and emotion sale at semiformal stands and kiosks in of those connections, ultimately resulting al motives are frequently mentioned in Russia (Brednikova & Nikiforova 2015). in the marginalisation of the areas lying The Polish-Ukrainian case the surveys on this phenomenon. Prices of 7 on both sides of the border. Part of the several international brands are lower in border runs along the course of the rivers - Finland due to Russian import tariffs and The Polish-Ukrainian border spans and , whilst the rest do not follow the reimbursement of VAT at the border, 535 km, of which 239 km stretches be any natural features. - Border regime and many Russian customers trust that tween the Podkarpackie Voivodship on these products are originals. For poten the Polish side and the Lviv Oblast on the 7 This section utilizes the data materials and results of tial Russian customers in St. Petersburg, the Polish-Ukrainian case study carried out as part of Until 1989, the border between Poland the FP7 EUBORDERREGIONS project (Smętkowski the alternative EU destination is Estonia, et al. 2014). and the Ukrainian SSR had a low level of where the price level is lower and most permeability with only one road border 56 Maciej Smętkowski, Sarolta Németh, Heikki Eskelinen: Cross-border shopping at the EU’s eastern edge

Warszawa The Polish-Ukrainian case study region - relative difference exceeds 30 per cent. Siedlce - Kobrin The main reason is the large role of ag Brest Pinsk riculture characterised by low produc Biała Podlaska BELARUS - W tivity both in the Polish and in Ukrainian is ła Pripy g at u border regions. Another important struc B - tural factor bearing on various forms of Puławy Radom cross-border interaction, such as shop Lublin ping tourism, is the striking economic

Kovel' difference between the two sides of the Ostrowiec Chełm border. In 2013, the GDP per capita in Świętokrzyski LUBELSKIE - VOIVODSHIP VOLHYNIA OBLAST the Polish border region was 6500 EUR,

POLAND Zamość whereas it was 1600 EUR in the neigh Tarnobrzeg Luts'k - Stalowa Wola Novovolynsk bouring Ukrainian region (SSCU 2014). ła is W This disparity is clearly linked to the dis similarity in the systemic transformation S a n

B processes in these two countries; Poland Tarnów u g being a forerunner and the crisis-ridden Rzeszów - Ukraine lagging much behind. In addition, POKARPACKIE LVIV OBLAST VOIVODSHIP the spatial structures of the border re - Przemyśl L'viv gions differ from each other in the sense D nis that the socio-economic potential is pre ter UKRAINE ' dominantly concentrated in Lviv on the Sa n 0 50 km Ukrainian side, whereas the Polish side

Prešov scale 1 : 3250000 of the border is characterised by a more

SLOVAKIA Source: own elaboration polycentric structure (GUS 2009). national border border of voivod- IfL 2017 In terms of the socio-cultural sphere, ship/oblast Authors: H. Eskelinen, S. Németh, - Košice M. Smętkowski main road Cartographer: R. Schwarz however, the two sides of the border are much closer to each other than in the eco nomic sphere in the sense that although Fig. 3: The Polish-Ukrainian case study region - the share of minorities is low (less than one per cent) on both sides, the similar ity of the two languages enables a fairly - crossing point and one railway border again by the agreement on local border easy communication and many aspects of crossing point available for passengers traffic (LBT), according to which travel cultural heritage are common or similar - along its entire length. Soon after Ukraine lers living within a 30 km radius from the (e. g. from the period of Austro-Hungarian - had gained independence, this number in border were released from the obligation Empire). Border traffic creased to five road border crossings and to obtain a visa. Not surprisingly, this ar - two railway crossings handling passenger rangement has been criticised as it does traffic. As to the rules and regulations con not include the residents of Lviv, situated Compared to Poland’s other borders - cerning border crossings, the agreement about 60 km from the border. Another with non-EU countries, the traffic at the on visa-free traffic between Poland and point of criticism has concerned the visa Ukrainian border is of the highest inten - Ukraine was concluded in 1997, but visas fees which were quite substantial (EUR sity. Since 2001, passenger traffic at the were re-introduced for Ukrainian citizens 35 for the Schengen visa) in terms of pur Polish-Ukrainian border has steadily and - in 2003 as part of Poland’s preparations chasing power in Ukraine. This problem, distinctly outnumbered passenger traffic - to EU membership. Because they were is however, was solved by the introduction at the Polish-Belorussian border. The year sued to Ukrainian citizens free of charge, of free-of-charge ‘national’ visas in 2013, 2006 saw the record number of cross the impact of this requirement was small which permit entry to Poland. ings, close to 20 million, whereas in 2013 Socio-economic and spatial-cultural until Poland’s accession to the Schengen conditions 16.7 million crossings were recorded at Area in December 2007, which led to the Polish-Ukrainian border (57 per cent - the tightening of the border regime and crossings being made in the Podkarpackie - included the introduction of charges for In economic terms, both sides of the bor Voivodship) (see Fig. 4). The most popular visas issued to Ukrainian citizens. From der are lagging behind the respective na border crossing points included Medyka, 1 July 2009 the visa regime was eased tional averages in GDP per capita – this the only border crossing point along this 57 Europa Regional 24, 2016 (2017) I 1-2

- Border crossings between Poland and Ukraine 1992–2014 border that can handle pedestrian traffic millions (4.5 million travellers), Korczowa, a vil 20 lage situated along the main transport - corridor A4 motorway (2.7 million), and 18 Dorohusk and Hrebenne (each 2.7 mil lion) in the Lubelskie Voivodship. Total - 16 In general, the number of crossings - has been characterized by major fluctua tions, which are to a large degree con 14 ditioned by the behaviour of frequent border-crossers dealing with informal 12 cross-border trade. This activity, for its part, has been dependent on business 10 - conditions such as the economic crises in

Ukraine, the so-called 1998 ‘Russian cri 8 Ukrainians sis’ and, more recently, the global financial crisis in 2008. Interestingly, the share of 6 Polish nationals rose rapidly during the first years of this millennium, but then fell 4 from 67 per cent in 2008 to a mere 14 per cent in 2013. In comparison, the impact of the changes in the visa regime in the 2 years 2003 and 2007 on border traffic is much less visible due to the fact that the 0 92 93 94 1995 96 97 98 99 2000 01 02 03 04 2005 06 07 08 09 2010 11 12 13 14 rather fast growth of Ukrainian economy year in those years raised personal incomes - IfL 2017 Draft: H. Eskelinen, S. Németh, and increased the number of arrivals of M. Smętkowski - Source: prepared by the authors based on GUS, Border Guarddata and KOMORNICKI 2009 Design: R. Schwarz Ukrainians to Poland. More recently, how ever, the impact of the adoption of the lo Fig, 4: Border crossings between Poland and Ukraine 1992–2014 cal border traffic agreement in 2009 gave - a boost to short-distance cross-border trips. These local visitors currently ac - count for approximately two-thirds of cities on the Polish side) was among the VAT return service, which is not available - 8 Ukrainians visiting Poland, compared to five biggest of such facilities in Poland at all shops (Bar Kołelis & Dopierała 43 per cent in 2009. This trend has con (Krok & Smętkowski 2006). 2014). Overall, the benefits arising from tinued in 2015. This form of trade exchange collapsed this kind of border trade are limited to a Cross-border shopping after the so-called ‘Russian crisis’ of 1998, small number of , whereas Visitors from Ukraine to Poland - which was reflected, for instance, in the a growing sense of peripheralisation is drastic decrease in revenues from the out visible in other municipalities situated

In the first period after 1991, the arrival of door market fees paid to the budget of the along the border (Janicki 2010; Bański - Ukrainians to Poland was associated with above mentioned Przemyśl in 1997–2000 & Janicki 2013). the petty trade of industrial goods from (Smętkowski 2002). Furthermore, ac Based on the Central Statistical Office - countries formed after the disintegration cording to a 2012 survey of customers at statistics (GUS 2014), the total value of - of the USSR. In the following years, due to the markets of Przemyśl and Medyka (sit purchases made by Ukrainians in Poland shortages and high prices of some goods uated in the direct vicinity of the border in 2013 can be estimated at approximate in the Ukrainian market, many people crossing point), Ukrainians were major ly PLN 4.6 billion (approximately EUR travelled to Poland in order to buy food, buyers for only 5 per cent of the stands, 8 During the past decade, a number of such modern shopping facilities have been built in Przemyśl, inclu- cosmetics and furniture especially. Their while their share had been almost 25 per ding the shopping mall Galeria Sanowa with 60 retail purchasing power was increased by re- cent in 2001. This decline is due to the and service outlets, supermarkets (Carrefour, Tesco) as well as DIY stores (Castorama, Nomi) and a num- sales of excise goods such as Ukrainian fact that shopping malls, discount stores ber of discount stores (Biedronka, Lidl). In addition, in 2011 a shopping mall, Korczowa Dolina, was opened cigarettes and alcohol, which were sold and DIY stores have become their main 2 km from the border in the vicinity of the second largest border crossing point in Korczowa. Currently, it at open bazaars – a market of this kind shopping destinations. An important offers 48 000 sq. metres of retail space. operating in Przemyśl (one of the border factor in this change is the possibility of 58 Maciej Smętkowski, Sarolta Németh, Heikki Eskelinen: Cross-border shopping at the EU’s eastern edge

- 1.1 billion), which represented as much cent in 2008. The share of long distance against the Ukrainian hryvnia (the value - as 25 per cent of the aggregate value of trips has decreased; around 80 per cent of of hryvnia fell by 47 per cent in the pe official Polish exports to Ukraine. The the respondents reported that they made riod 2005–2008). However, with the out main groups of commodities included their purchases within a 30 km distance break of the economic crisis in Ukraine in - building materials (37 per cent), car from the state border. 2008, there was a significant decrease in parts and accessories (21 per cent), au As for the purposes of border crossings, the number of Poles traveling abroad. In - - dio and TV (16 per cent), foodstuffs (12 traditional tourism plays an insignificant the same year, the opportunities to carry per cent), whereas other groups such as role when compared to shopping and pet excise goods through the border were re clothing and footwear, interior materials, ty trade – only 1.4 per cent in 2003 and duced drastically by the implementation toiletries and cosmetics accounted for 0.8 per cent in 2013 of the visitors from of new regulations. This led to protests by - approximately 5 per cent each. In recent Ukraine reported leisure tourism as the border region residents engaged in the - years, the share of foodstuffs in the shop purpose of their journey. In 2013, there transport of cigarettes, even blocking the - ping basket has decreased considerably were only approximately 50 000 Ukrain largest border crossing point in Medyka. (it was 32 per cent in 2003). This change ian citizens staying overnight at the ac Shopping is still the most important - - reflects the improved living conditions of commodation facilities in the border motive for border crossings. In 2013, not Ukrainians, and also the structural devel regions in Poland, including accommoda less than 88 per cent of Polish travellers to opments in the industries of these two tion during transit travels. Also, visits to Ukraine declared it as the main purpose - - countries, especially in comparison to the family or friends accounted for only 1.4 for their journey, although the scale of this 1990s, when the shortages of commodi per cent of the travellers, compared to activity has decreased considerably in re ties in the Ukrainian market, including 6.8 per cent in 2003. cent years; 2.3 million of border crossings Visitors from Poland to Ukraine - food, were the main factor encouraging in 2013 compared to 5.2 million in 2009 border trade (Miszczuk 2007). Growth (see Figure 2). The total value of pur - in the average value of purchases reflects Before 1991, the number of visitors chases, estimated at approximately EUR the same trend – it is currently in excess from Poland to Ukraine was small and 60 million annually, was small in compari of EUR 150 per customer, compared to they traded mainly Western goods such son to the value of imports from Ukraine - EUR 40–50 in 2003. as clothes and cosmetics unavailable on (3 per cent). Furthermore, the average For increasing their purchasing pow the USSR market. Earnings were spent by spending by a Polish traveller in Ukraine er, visitors from Ukraine to Poland still buying mostly gold and jewellery. After (50 EUR) is nearly three times lower than - bring products for sale, mainly cigarettes, the opening of the border, profit-oriented the amount spent by a Ukrainian visitor in despite the severe restrictions of its im trips continued to play an important role Poland, although this sum has increased - ports implemented in 2008. Alcohol is in border crossings and most travellers significantly in comparison to 2003, when - - also brought to the country, although on focused on selling cheap goods coming it was under EUR 10. An additional rea a much smaller scale. Owing to wide dis from the countries formed after the dis son for the decline in the number of cross- parities in the price levels, the bulk of the solution of the USSR. From 1994 to 1997, border shopping trips results from the - - revealed smuggling cases are associated this flow of visitors declined, but this more stringent restrictions on imports of with cigarettes; in 2012, a pack of ciga downward trend turned in the aftermath excise goods from Ukraine, which has un - - rettes cost EUR 2.32 on the Polish side of the Russian crisis (Komornicki 2008). dermined the profitability of cross-border the border and EUR 0.77 on the Ukrain Typically, Polish visitors to Ukraine pur visits. Most of these shopping trips are ian side (FRONTEX 2012). However, it chased fuel and excise goods for their very short – 90 per cent within a 30 km should be noted that due to the gradual own use or for resale. In the next stage, distance from the border. Understandably, - - price convergence of fuel prices and the after Poland’s accession to the European this concerns especially the trips made in - more stringent customs restrictions, ille Union, the number of border crossings order to fill up the car, which in fact ac gal trading activities of excise goods have grew manifold. The proliferation of traf counts for no less than two thirds of the - - become far less profitable than before. fic on weekends, which was not observed aggregate value of purchases. The other - The share of Ukrainian travellers cross at other Polish external borders with key commodities are cigarettes and alco - ing the border at least several times a non-EU countries, indicated that the pur hol, which both account for 10 per cent of week has not changed over the years and chase of excise goods in Ukraine had be the aggregate volume of the purchases by remains at a level of 65 per cent, which come for a large group of Poles not only Polish visitors in Ukraine. quite clearly indicates that such visits are an additional source of income, but it The total number of Polish overnight motivated by profit-oriented reselling. In was also combined with leisure activities tourist visitors in the border regions - 2013, 90 per cent of surveyed travellers (Komornicki 2009). Partly, this was also of Ukraine is hard to estimate but is declared shopping as the main purpose due to the growth of incomes in Poland probably not higher than 100 000 an of their visit, compared to around 80 per and the appreciation of the Polish zloty nually (Rettinger 2010). The analyses 59 Europa Regional 24, 2016 (2017) I 1-2

- of declarations submitted by travellers of the utilization of border-related price At the Polish-Ukrainian border, cross- - crossing the border clearly show that differences. This setting has not changed border petty trading has a tradition dat leisure tourists account for a tiny share to any major extent since 1990s. Fuel and ing back to the 1970s, but it flourished es of this traffic, and even this fraction has cigarettes can be bought on the Russian pecially in the 1990s, when large outdoor - been on a decline. This tourism mainly side at lower prices and for this reason market facilities (‘bazaars’) on the Polish - comprises group tours, with destinations most visits from the neighbouring coun side of the border appeared following the in Lviv and the so-called Golden Horse try are very short in both space and time. opening up of the border. More recently, shoe of Ukraine, a tourist route covering As indicated above concerning both cases, Ukrainian ‘cross-border specialists’ have - major castles and palaces of the region. the number of these visits is sensitive to become customers of shopping malls Such trips are in many cases emotionally the exchange rate and the regulations of and discount stores, even though bor - motivated and associated with nostalgic the border regime (the latter effectively der crossings are still accompanied by memories of the lost Polish borderlands, limits imports for sale and prohibits im the smuggling of small amounts of excise - i.e. the region which formed part of the ports of alcohol in connection with one- goods, mainly cigarettes to Poland. The Polish territory before the Second World day trips). ‘Tourism shopping’ (shopping scale of border traffic is mainly condi War. At the same time, the number of performed in connection with proper tioned by the overall economic situation - - visitors to Ukraine travelling by air has tourism and business trips) from Finland in Ukraine (and the resultant purchasing - - recently increased, the EURO 2012 UEFA to Russia plays almost no role at all. Con power of citizens) and by price differ European Championship being an impor sidering cross-border shopping in the ences on the two sides, whereas admin tant case-specific reason for this change. other direction, carried out by Russian istrative barriers such as the visa regime Conclusions visitors in Finland, volumes, drivers and do not affect overall flows, but may shape - - forms of this activity are very different. to a certain extent its geographical range. - The key findings from the two case stud During the first years of a more open bor Currently, about two-thirds of these cross- - ies can be interpreted along the working der in the early 1990s, the typical form border travellers live within the area cov - - typology presented at the beginning of of Russian tourism to Finland was a com ered by the local border traffic agreement - this paper (in Tab. 1), which makes a dis bination of small-scale trading and shop in comparison to 40 per cent in 2008. tinction between different forms of shop ping at low-price markets. Since then, it Crossings from Ukraine to Poland for ping and its drivers. has evolved towards rather large-scale other reasons than shopping related to - As a brief summary, it can be observed middle-class shopping tourism that is petty trade are relatively infrequent and - from the above that cross-border shop connected to an outward looking way of tourism remains largely undeveloped. The ping accounts for a substantial part of all living. Finland represents positive unfa main driver that encourage Ukrainians to - - mobility and that cross-border shopping miliarity to certain relatively well-to-do visit the Polish border region is related to is characterized by comparable fluctua Russian travellers – the often-mentioned differences in prices of goods. The major tions across both of the studied borders. attractions are spas, clean urban milieus, ity of them make purchases with a view - An aspect common to the two examined traffic safety and well-equipped villas in to further resale with a profit (brokerage) cases is that during the first years after silent natural environments. prevail. This form of shopping is an im - - the regime change, informal economic Aspects of both stability and volatility portant source of income for a large part activities in various forms played a ma may be detected in relation to develop of residents living in the Ukrainian border jor role in border crossings in these two ments in shopping tourism across the zone. The ‘emotional aspect’ of shopping regions. Since then, however, different studied Finnish-Russian border. Most is associated with the highly appreciated developments have taken place: ordinary Finnish visitors to Russia are relatively quality of Polish products (which is also a cross-border shopping tourism supported frequent travellers and thus they are known factor in cross-border shopping by by the attractiveness of the neighbouring well familiar with the requirements and Russians in Finland) and the considerably - country as a travel and leisure destination practices of border crossings, which have improved shopping conditions as a result - has grown in importance in the influx of been relatively stable throughout the pe of the move from traditional bazaars to - Russians into Finland, whereas most riod under consideration. It is also inter modern shopping malls. - shopping visits by Ukrainians to Poland esting to note that while in early 2014 the Volatility can be traced in the develop - continued to be linked to profit-oriented Ukrainian crisis and its economic reper ment of shopping tourism in this border - reselling. cussions put an end to the growth trend region as well, yet with some other di Looking behind these phenomena, one in Russian (shopping) tourism to Finland, rect causes in the background. The num can detect various drivers. Already within the indirect impacts of the crisis have ber of cross-border trips from Poland to the Finnish-Russian case, there is a major been quite reverse on the ‘fuel rally’ from Ukraine grew manifold between 2002 and asymmetry. Shopping trips from Finland Finland to Russia which has got a boost 2007, but has since fallen to their earlier to Russia are a representative example from the declined value of the rouble. relatively limited level. There are several 60 Maciej Smętkowski, Sarolta Németh, Heikki Eskelinen: Cross-border shopping at the EU’s eastern edge

reasons for this change. Shopping in the shopping. Shopping behaviour reflecting Hence, it is not matched by consumption - crisis-ridden Ukraine has lost much of its socio-cultural factors is less responsive to of tourism services in a particular region. - - appeal for the residents of the border are changes in market conditions than that Instead, cross-border shopping triggered - as, unpredictable waiting times at the bor based on monetary calculations (driven by price differences and aiming at resell der considerably curtail visits abroad (in by economic conditions). In general, ing is important for the survival of some cluding those taken for recreational and cross-border shopping between Poland households of the settlements in closer - - leisure purposes). Also, the emergence of and Ukraine has been conditioned by proximity of the border, as an ‘informal - alternative opportunities for improving fluctuations in economic conditions (in resource’ or coping strategy of individu one’s financial situation by emigrating cluding exchange rates, income level and als to raise their standards of living. How for work in highly-developed European its changes, labour market situation), to ever, taking into account the large scale of Union countries has also undermined the a larger extent than between Finland and shopping related cross-border mobility in - economic motives of informal small-scale Russia. Also the recent increase of the this border region, the number of visitors - cross-border business. In effect, the dis development gap between Poland and with medium and high incomes has been - appearance of economic motives could Ukraine as result of the current crisis in also growing, which may lead in the fu - not be compensated for by an emergence the latter have led to growth in the num ture to the development of a greater range of positive socio-cultural drives for cross ber of Ukrainian visitors for shopping of tourism services. ing from Poland to Ukraine to engage in related to petty trade. The prevalence of shopping tourism. This was reinforced by shopping in this form is very significant a heightened barrier effect of the border and genuine ‘shopping tourism’ driven - and the deteriorating overall perception by socio-cultural factors has a very small - of the neighbouring country as a conse share in Ukrainians visits in Poland and quence of the political and economic cri vice-versa. sis there. The inevitable result has been As a final note, one may make a few the contraction of cross-border shopping claims and draw some comparisons based - in this direction. on the two studied examples of border - Overall, the investigation of the two cas regions in terms of the implications of - es on the EU’s external border illustrates cross-border shopping to regional de - that cross-border shopping is a multi velopment. Genuine shopping tourists - faceted phenomenon being affected by can be seen as a resource of being situ various economic and socio-cultural fac ated near the border especially when the - tors as well as administrative and (geo) visitors represent an affluent purchasing - political conditions. In these two cases, power as well as a particular love of vari - the border regimes have provided an ety motivating their tourism to the neigh - increasingly stable environment for vari bouring country. Regions on the receiving ous cross-border activities (at least until side can consciously promote their attrac 2014). For instance, EU membership of tiveness in terms of the assortment and Finland and Poland and the introduction quality of products, by making crossing - of the Schengen regime did not change the border technically smoother as well shopping tourism to any major extent, as by providing a generally appealing en - although the Local Border Traffic (LBT) vironment for the visitors – provided they introduced in 2009 seems to be of impor are well aware of the socio-cultural and tance for shopping visits to Poland. In the economic drivers of their mobility. This Finnish-Russian case, ‘genuine’ shopping has indeed been the case of the Finnish tourism linked to ‘emotional’ and socio- regions’ development strategies, who cultural factors grew fast until 2013 in saw the opportunity and reacted fast in - the Russia to Finland direction, whereas order to reignite their economic growth, the opposite flow of visits is largely mo which had experienced industrial decline - tivated by one single, economic factor, for decades. By comparison, cross-border - i.e. the difference in the price of fuel. Un shopping of the ‘petty trade’ type, which - derstandably, the economic implications has been prevailing in the Polish-Ukrain of the geopolitical crisis since 2014 has ian case, is triggered chiefly by price dif had opposite repercussions on these two ferences and has engaged predominantly aspects of border crossings related to low-income segments of the population. 61 Europa Regional 24, 2016 (2017) I 1-2

References -

Fritsch, M., H. Eskelinen (2015): Plan Krok, K., M. (Smętkowski eds.) (2006): Alanen A. (2015): Venäjänkielisiä yli ning strategically or by the book? – Cross-border co-operation of Poland 70 000 Suomessa. Tieto & Trendit Contentious land use planning in after Enlargement. Focus on Eastern - 4/2015. Tilastokeskus. (www.stat.fi). south-eastern Finland. Manuscript. Border. Warszawa. - Bar-Kołelis, D., Ł. Dopierała (2014), (Submitted to Planning Practice & Re Lipkina, O. (2013): Motives for Russian Ukrainian Cross-Border Shoppers In search). Second Home Ownership in Finland. fluence at the Polish and Romanian Golunov, S. (2015): Tourism across the Scandinavian Journal of Hospitability - Borders. A Comparative Study from EU-Russian Border: Official Strategies and Tourism 13(4), pp. 299–316. Suceava and Lublin, Revista Română de vs. Unofficial Tactics. Eurasia Border Minghi, J.V. (1999): Borderland ‘day tour - - Geografie Politică, Vol. 16(2), pp. 78–87. Review 5(2), pp. 19–34. ists’ from the East: Trieste’s transitory Bański, J., W. Janicki (2013): The influ Gurova, O. (2015): Fashion and the Con shopping fair, Visions in Leisure and ence of the EU’s eastern frontier on sumer Revolution in Contemporary Business 4(17), pp. 32–49. the socioeconomic situation of border Russia. London and New York. Miszczuk, A. (2007): Zewnętrzna granica - areas, European Urban and Regional GUS (2008): Polish-Ukrainian border area Unii europejskiej – Ukraina możliwości Studies vol. 20(3), pp. 299–313. profile, Statistical office. Rzeszów. wykorzystania dla dynamizacji pro - Brednikova, O., E. Nikiforova (2015): GUS (2014): Border traffic and movement cesów rozwojowych (eng. External EU St Petersburg Under the Food Em of goods and services at the European border with Ukraine. Opportunities - - bargo: Informal Finnish-Russian Union’s external border on the territory for boosting development process), Cross-Border Trade as a Coping Strat of Poland in 2013, Central Statistical Of Expertyza na potrzeby Strategii Polski egy. EUROBORDERSCAPES Newsletter fice. Warsaw. Wschodniej 2020, pp. 656–680. No 5 (www.euborderscapes.eu/index. Janicki, W. (2010), The influence of the Németh, S., M. Fritsch, H. Eskelinen php?id=newsletter40). Polish-Ukrainian border on the socio- (2015): Cross-Border Cooperation and - Bruns, B., J. Miggelbrink, K. Müller economic situation of selected border Interaction between Southeast Finland - - (2011): Smuggling and small-scale communes. In: Michalski, T., A. Kucz and its Neighbouring Russian Regions - trade as part of informal economic prac abski (eds.): Selected aspects of trans of Leningrad Oblast and St. Petersburg. tices. Empirical findings from the East formation in countries of Central and Case Study Report. Publications of the - ern external EU border. International Central-Eastern Europe. University of University of Eastern Finland. Reports Journal of Sociology and Social Policy Gdańsk, pp. 208–233. and Studies in Social Sciences and Busi - 31(11/12), pp. 664–680. Katajala, K. (ed.) (1997): Uusi raja – ness Studies No 7. Joensuu. - - CEC (2004): Qualitative Study on Cross uusi tilanne. [in:] Itä-Suomi ja Pietari. Nokki, J. (2015): Nuijamaan neljä vu Border Shopping in 28 European Coun Kirjoituksia toimeentulosta suurkau osikymmentä. (http://www.tulli.fi/fi/ tries, survey requested by Directorate pungin vaikutuspiirissä. Studia Carelica suomen_tulli/tulli_tutuksi/tullimuseo/ - General Health and Consumer. (http:// Humanistica 9. Kitee. nuijamaan_tullin_historia.pdf). ec.europa.eu/public_opinion/archives/ Komornicki, T. (2008): Transborder OECD (2002): Measuring the Non-Ob quali/ql_cbs2004_en.pdf). transport. The case of Poland’s present served Economy: A Handbook. OECD - EC (European Commission) (2006): and future Schengen area boundaries. Publications Service. Paris.

Questions and Answers on the Euro In: Leibenath, M., E. Korcelli-Olejniczak, Powęska, H. (2008): The character and barometer on consumer protection in R. Knippschild (eds.): Cross-border conditions for development of cross- the Internal Market (MEMO/06/349 Governance and Sustainable Spatial border shopping in Poland in the period on Eurobarometer 252) Brussels, Development: Mind the Gaps!. Berlin- of transformation, Electronic Journal of - 27. 12. 2006. URL: europa.eu/rapid/ Heildelberg, pp. 133–146. Polish Agricultural Universities, Vol. 11 press-release_MEMO-06–349_en.pdf, Koff, H. (2015): Informal Economies in (4), http://www.ejpau.media.pl/vol - - last accessed in 11. 2016. European and American Cross-border ume11/issue4/abs-09.html. Eskelinen H., J. Kotilainen (2005): A Vi Regions. Journal of Borderlands Stud Rettinger, R. (2010): Stan i perspektywy sion of a Twin City: Exploring the Only ies Vol. 30, pp. 469–487. rozwoju bazy noclegowej w obwodzie - Case of Adjacent Urban Settlements at Komornicki, T. (2009): Przepływy osób i lwowskim (eng. Status and prospects the Finnish-Russian Border. Journal of towarów przez polski odcinek wschod of development of hotel accommodation Borderlands Studies 20(2), pp. 31–46. niej granicy Unii Europejskiej – analiza in Lviv region), Prace Komsji Geogafii - Finnish Border Guard, www.raja.fi. przestrzenna (eng. Flows of people and Przemysłu Nr 16. Warszawa-Kraków, FRONTEX (2012): Eastern Borders – An goods across the Polish section of the pp. 226–236. - nual Overview 2012. Warsaw. EU east border – spatial analysis), Final Shikalov, Y., T. Hämynen (2013): Viipurin FRONTEX (2013): Eastern Borders – An report, IGiPZ PAN. Warszawa. kadotetut vuodet. Helsinki. nual Risk Analysis 2013. Warsaw. 62 Maciej Smętkowski, Sarolta Németh, Heikki Eskelinen: Cross-border shopping at the EU’s eastern edge

-

Smith, A. (1997): The new geo-economies SSCU (2014): Statistical publication Re - - of central and eastern Europe. In: Lee, gions of Ukraine, Part ІI. . Prof. (emeritus) Heikki Eskelinen - R., J. Wills (eds.): Geographies of econo TAK (2002): Värtsilä-Niirala rajanylity Dr. Sarolta Németh mies. London. spaikan palvelutarvekartoitus. Tutki University of Eastern Finland - Spierings, B., M. van der Velde (2008): musraportti, INTERREG III A Karjala Karelian Institute - - Shopping, Borders and Unfamiliar (unpublished). Yliopistokatu 2 - ity: Consumer Mobility in Europe. Ti TAK (2013): http://www.tak.fi/wp-con FIN-80140 Joensuu jdschrift voor Economische en Sociale tent/uploads/2013/10/tak-rajatutki Finland Geografie Vol. 99(4), pp. 497–505. mus-2012-esittelymateriaali.pdf. [email protected] - - Spierings, B., M. van der Velde (2013): TAK (2014): http://www.tredea.fi/ [email protected] Cross-Border Differences and Unfamili site/assets/files/6372/tak_rajatutki - arity: Shopping Mobility in the Dutch- mus_2014_pasi_nurkka_tak_oy.pdf. Dr hab. Maciej Smętkowski Geman Rhine-Waal Euroregion. Europe Timothy, D.J. (2005): Aspects of Tourism, University of Warsaw an Planning Studies Vol. 21(1), pp. 5–23. Shopping Tourism, Retail and Leisure, Centre for European Regional and Smętkowski, M. (2002): Rola położenia Channel View Publications. Clevedon. Local Studies (EUROREG) - przygranicznego w rozwoju lokalnym – Timothy, D.J., R.W. Butler (1995): Cross- Krakowskie Przedmieście str. 30 - przykład miasta Przemyśla (eng. The Border Shopping a North American Per PL-00–927 Warsaw role of border location in local devel spective, Annals of Tourism Research, Poland opment – case study of City Przemyśl), Vol. 22 (1). [email protected] Studia Regionalne i Lokalne Vol. 2–3(9), van der Velde, M., T. van Naerssen (eds.) pp. 141–155. (2016): Mobility and Migration Choices: Smętkowski, M., M. Kozak, O. Mrinska Thresholds to Crossing Borders. Border - (2014): Poland-Ukraine Case Study Regions Series. Ashgate. Report, Working Paper, http://www. Williams, A. M., Balaz V. (2002): Inter euborderregions.eu/files/5_CSR%20 national Petty Trading: Challenging - - PL-UA_Euroreg.pdf. Practices in Trans-Carpathian Ukraine, Stammler Gossmann, A. (2012): Winter- International Journal of Urban and Re tyres-for-a-flower-bed: Shuttle trade on gional Research, Vol. 26(2), pp. 323– the Finnish-Russian border. In: Bruns, 342. B., J. Miggelbrink (2012): Subverting Borders. Doing Research on Smuggling and Small-Scale Trade. Wiesbaden.

63 Europa Regional 24, 2016 (2017) I 1-2

Peзюме Résumé

Трансграничная розничная торговля на восточной гра- Shopping transfrontalier à la limite orientale de l’UE – le Мачей Сментковски, Саролта Немет, Хейкки Эскелинен Maciej Smętkowski, Sarolta Németh et Heikki Eskelinen нице ЕС − приграничные регионы Финляндии-России cas des régions frontalières finno-russe et polono-ukrai- и Польши-Украины nienne - - - В статье рассматривается трансграничная розничная Cet article étudie le shopping transfrontalier à travers les fron - торговля между Финляндией и Россией, а также Поль tières finno-russe et polono-ukrainienne depuis la désintégra - - шей и Украиной после распада Советского Союза в срав tion de l’Union soviétique, dans une perspective comparative. нительной перспективе. Трансграничные покупки мож Le shopping transfrontalier peut être défini de manière diffé но по-разному классифицировать для различных целей. rente en fonction de divers objectifs ; cette étude s’intéresse Проведённое исследование посвящено определяющим principalement aux facteurs conditionnants, aux moteurs et aux - - факторам, акторам и проявлениям этой деятельности, а formes de cette activité ainsi qu’à son volume et ses tendances также её объёму и тенденциям с тем, чтобы проанализиро afin de comprendre ses implications dans les interactions trans - вать их влияние на трансграничный обмен и региональное frontalières et le développement régional. On observe que les развитие. Показано, что трансграничная розничная тор achats transfrontaliers représentent une partie importante de говля является существенной частью общей мобильности la mobilité dans son ensemble et qu’ils se caractérisent par des - населения и характеризуется схожими сдвигами по обе fluctuations comparables à travers les deux frontières étudiées, - стороны рассматриваемых границ, в то же время в обоих alors que chaque cas présente également certaines caractéris случаях имеются и некоторые специфические особенно tiques spécifiques. Un aspect commun réside dans le fait que, сти. Общим является то, что в течение первых лет после durant les premières années après le changement de régime, смены режима важную роль в трансграничных связях в des activités économiques informelles de diverses formes - различных формах играла теневая экономика. С тех пор ont joué un rôle majeur dans les passages aux frontières de за счёт притока россиян в Финляндию выросло значение ces deux régions. Depuis lors, le tourisme de shopping trans обычного трансграничного торгового туризма, которому frontalier ordinaire, soutenu par l’attrait du pays voisin en tant благоприятствовала привлекательность соседней страны, que destination de voyage et de loisirs, a gagné en importance с точки зрения возможностей туризма и отдыха, в то время dans l’afflux des Russes en Finlande, alors que la plupart des - как большинство торговых поездок украинцев в Польшу visites d’achat des Ukrainiens vers la Pologne restaient liées à по-прежнему связано с прибыльной перепродажей това la revente dans un but lucratif. De plus, les variations des taux ра. Кроме того, изменения валютных курсов, в результате de change découlant des retournements géopolitiques et des en particulier геополитических и экономических процессов, являются cycles économiques se sont révélées être des facteurs dans les в обоих случаях определяющими факторами, особенно deux cas, en tant que conditions pour effectuer при коротких и частых поездках из Финляндии в Россию des voyages courts et fréquents de la Finlande vers la Russie и (в основном) из Украины в Польшу при использовании et (surtout) de l’Ukraine vers la Pologne, afin de profiter des - - ценовых различий для налогооблагаемых товаров, таких différences de prix des produits soumis à des impôts indirects, - как автомобильное топливо и сигареты. Наконец, иссле comme le carburant et les cigarettes. Enfin, l’étude montre éga дование также показывает, что трансграничные покупки lement que le shopping transfrontalier peut avoir des consé могут иметь прямое влияние на региональное развитие, quences directes sur le développement régional, puisque les так как заинтересованные местные/региональные акторы acteurs politiques locaux et régionaux peuvent le considérer - рассматривают розничную трансграничную торговлю как comme un atout : l’attraction des touristes au shopping de la - экономическое преимущество. Приток торговых туристов Russie est devenue une stratégie de développement clé en Fin из России в Юго-Восточную Финляндию, несмотря на вос lande du sud-est, en dépit de la vulnérabilité aux changements приимчивость к изменениям геополитического характера, de conditions géopolitiques. Tourisme de shopping; régions frontalières; frontière orientale de стал важной стратегией развития. Торговый туризм; приграничные регионы; восточная гра- l’UE; interactions transfrontalières; développement des régions ница ЕС; трансграничный обмен; развитие приграничных frontalières регионов

64