Finland’s South Karelia has faced severe economic decline and rising unemployment following the closure of all border crossings with Russia in late 2023, according to reports. The region, which previously relied heavily on cross-border trade and tourism, now loses approximately €1 million daily in revenue, leaving local businesses and communities reeling.
South Karelia’s proximity to St. Petersburg historically fostered strong economic ties with Russia, including retail, tourism, and forestry industries. However, the abrupt border closure disrupted these connections, leading to empty hotels, shuttered shops, and a sharp drop in demand for goods. Sari Tukiainen, a local store owner, described the impact: “Russian customers used to buy clothes in stacks—latest fashion, bling, even winter coats sold out by August.” Her business is now set to close due to declining sales.
Unemployment in Imatra, a town once known for its tourism, has surged to 15%, the highest rate in Finland, as mills and industrial plants reduce staff. The closure also marks a shift from Finland’s historical ties with Russia, including its time as part of the Russian Empire and Cold War-era neutrality. Helsinki’s decision to join NATO and impose sanctions on Moscow in 2022 further strained relations, exacerbating the economic fallout for regions like South Karelia.