Home  Journals  National Interests: Priorities and Security  1(382) - 2020 January

The impact of the informal economy in tourism on the economic security of the Krasnodar Krai

Received: 23 April 2019

Received in revised form: 18 May 2019

Accepted: 10 June 2019

Available online: 16 January 2020

Subject Heading: ECONOMIC SECURITY

JEL Classification: G32, L43, Q50, R11

Pages: 32–43

https://doi.org/10.24891/ni.16.1.32

Subject The prevailing informal economy in tourism of the Krasnodar Krai affects the reputation and overall development of tourism in the region. This ends up in the override and abusive practices of officials, thus undeniably putting the region’s economic security at stake.
Objectives The study identifies key breaches and challenges to the development of tourism in the region. We also outline our recommendations for finding proper solutions.
Methods The study involves general methods of research, such as structural and functional analysis, dialectical method, traditional methods of analysis and synthesis. Furthermore, we gather, classify, compare and summarize the relevant data on the subject.
Results The article investigates two illustrative situations revealing a trail of the informal economy. We analyzed gambling businesses and report on their financial indicators underlying our rating of the most profitable areas. The article spotlights key issues and inhibitors hampering the tourism development and sets out some recommendations for improving the situation.
Conclusions and Relevance Breaches in the informal sector affect the economic security regionally and nationally, engendering new threats and risk, inhibiting the overall development of the nation. To ensure the mutually beneficial development of tourism, the government should support and control relevant projects. This will stream more tourists into the region, thus raising tax revenue to the regional budget. The findings can be used by the government to control the current operations of tourist firms in the Krasnodar Krai.

Keywords: informal economy, tourism, Krasnodar Krai, gambling business, Caucasian Natural Reserve, corruption

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