Ahhh, Kislovodsk. Love this place. For those unaware, Kislovodsk is approximately 1,500kms SSE from Moscow located in the Stavropol Krai region (North Caucasus) located between the Black and Caspian Seas (each about 300kms away). The resident population of about 150,000 swells to well over 200,000 during the summer holiday period. ?

Temp ranges are acceptable at +25 to +30 during summer and down to a chilly 3 to -3 during winter.

Kislovodsk is mostly known for its extensive natural mineral spas and walking trails through the mountains and there are numerous resorts that specialize in wellness and relaxation. Russians have long regarded Kislovodsk, and the abundance of natural mineral water and clean mountain air, as having therapeutic value. Stressed oligarchs need somewhere to unwind! Prior to the Ukraine conflict, there was strong patronage from western Europeans but I’m told that has slowed to a trickle in the past year or so.

The Speedbox clan have relocated from Syktyvkar to catch up with numerous friends and a very small number of family. Beyond that, there is the impending renovation of our apartment and other real estate matters to action. I had hoped for something of a ‘holiday’ but that hope diminishes as each day passes. We will be here for almost three weeks.

It is peak season now and I have never seen so many people, mostly families, on the streets. Cars and tourist buses are ever present and there is even ‘peak hour’ traffic commencing around 5pm. It lasts for only 30 minutes but indicates the popularity of the city at this time.

As with Syktyvkar, the average age of the motor vehicles on the roads appears generally <5 years old. At a BBQ a few days ago I remarked to friends about recent media reports that Azerbaijan had recorded a 5000% (!) increase in Mercedes Benz imports. This caused great hilarity and others commented that not only Azerbaijan but Armenia, Georgia and Turkey are primary exporters for everything European into Russia. Cars are also coming from China in addition to a raft of other goods. Those are all in addition to the locally manufactured cars including from factories including those previously owned and operated by Renault and Nissan among others.

As mentioned in my report from Syktyvkar, the shops are full with extensive inventory of local and imported products. Again, the memo about sanctions didn’t seem to get through to many international brands although in fairness, the products are nominally delivered to, say, Turkey. But the people at Colgate, Nestle, Apple, Nike et al, in addition to those at Mercedes Benz, Mazda, Toyota, BMW etc cannot be so dimwitted as to not recognise the sales spike of their product in countries neighboring Russia. Plausible deniability I imagine.

There is a lot of new building happening in Kislovodsk. New apartment blocks and commercial premises (particularly new shops) are springing up like mushrooms. New stand-alone houses are also under construction. Trucks carrying cement and building products seem to rumble past frequently. A good friend of ours is a real estate agent and she says that apartment prices are showing significant capital growth – especially at the upper end. Many properties are being sold to retirees from Moscow or St Petersburg (attracted by the health/wellness industry) or to investors from those same cities.

Similarly, our builder remarked that over the past three years, his apartment renovation business has never been busier. He simply doesn’t have the time or the available work crew, to even think about undertaking new building construction.

Unlike Syktyvkar, bank interest rates for mortgages in Kislovodsk are a ghastly 20% for the purchase of existing property. New property attracts a still high 10%. Compared to Syktyvkar, the new property interest rate is double and +4 to 5% on existing property. This localized effort to contain the property boom is having little impact because, as our friend explained, by comparison to Moscow, Kislovodsk property prices are relatively cheap and many purchasers simply pay cash. For locals working in average jobs however, the interest rates are crushing.

The unemployment rate appears very low and like Syktyvkar, there is a distinct absence of homeless/drunks on the streets.

Overall, Kislovodsk is a thriving and comfortable resort city that seems unimpacted by the conflict in Ukraine.

On another note, the recent incursion by Ukraine forces into the Kursk region is a surprising development and it is not clear, to myself at least, what the strategic objective might have been.

Local reports of the size of the Ukrainian force vary – initially it was suggested about 1,000 men from a mechanized brigade with other reports suggesting up to 3,000 men. Whatever the size, local media is alive with reports (and video footage) of the Russian response including artillery, drones and infantry supported by devastating air strikes on Ukrainian columns by the Russian Air Force.

Which begs the question: ‘why?’. There was not the faintest hope of holding the area against Russian forces. The idea that Ukraine forces could occupy a portion of Russian territory is preposterous. Therefore, what was the point? Local media report that the Russian military are engaged in intense fighting to encircle the Ukrainian force. Unless I’m mistaken, few Ukrainian soldiers will escape with their lives.

So, again I ask: why? To prove a point that Ukraine can send expeditionary forces into Russia? Ok, but if they are all killed it seems a foolish waste of scarce manpower. As a PR exercise? I wonder how that sits with the Ukrainian general public as yet more of their sons and husbands are returned in body bags from a futile battle that had no strategic objective. The number of young Ukrainian men killed or seriously wounded to date will already have an impact on Ukrainian demographics for the next decade.

Time will tell and the situation is still evolving but at first pass on the available information, this Ukrainian excursion into the Kursk region of Russia appears to a pointless waste of soldier’s lives.