‘Russian-only’ businesses in Thailand’s Phuket spark backlash

Bangkok, Thailand – A huge influx of Russians in Phuket is producing a backlash from locals, amid complaints of a booming Russian-only economy that covers everything from hair salons to taxi firms.

More than 400,000 Russians arrived on the Thai tourist island between January and July this year, according to authorities, double the number of visitors before Russia’s war against Ukraine.

Many have secured long stay-visas, buying properties and establishing businesses to escape economic turmoil and the possibility of being conscripted following Russian President Vladimir Putin’s full-scale invasion of Ukraine.

In July, Russian Foreign Minister Sergey Lavrov visited Phuket to inaugurate a new consulate to handle the surging number of citizens seeking work and leisure on the island.

The growing Russian presence is bringing rapid change.

Property prices have surged, which, although a boon to Thai owners and realtors, has made it more difficult for renters to find an affordable place on the island.

Russian-only businesses have sprung up, often run through Russian language apps and staffed by people working illegally.

There have also been reports of Russian sex workers operating along the nightlife epicentre of Bangla Road, mainly for Russian clientele.

‘Roubles stay with the Russians’

“We’re affected by these Russians who came to run the whole tourism business,” Prayut Thongmusik, the president of the Phuket van drivers’ club, which represents 200 tourist minibus operators, told Al Jazeera.

“They drive personal vehicles that have not been registered with the Thai transport department as service vehicles, picking up tourists who book them through a Russian app, offering nearly 20 percent cheaper fees than us.”

“They make sure all the roubles stay with the Russians,” Thongmusik added.

On local Facebook pages, posts capture the growing anxiety of locals who fear their jobs are under threat and that Thais are becoming the on-paper owners of tourist businesses on behalf of Russian investors.

Some posts include photos of Russian taxi pick-ups and people believed to be Russian workers.

“These guys make it themselves, eat it themselves,” said one Facebook user. “Russians are stealing Thai jobs. Things will get out of control if we don’t get on top of it.”

Amid growing discontent, Phuket’s police force last month announced the arrest of a number of illegal workers, some of whom had been pointed out by angry locals.

“We arrested three Russian nationals who opened a hair salon after we got a complaint lodged by a Thai citizen,” Lieutenant Colonel Thongchai Matitam told Al Jazeera. “We charged them with breaking the law by doing the jobs reserved for Thais only.”

There are also concerns that the influx of Russian money could be accompanied by business rivalries and crime.

On June 8, Phuket immigration authorities arrested a Kazakh man on suspicion of shooting Russian businessman Dmitry Aleynikov, 44, in broad daylight while he was sitting in his car outside a busy cafe.

On Monday, a 31-year-old Russian man was arrested on the resort island of Koh Samui over his alleged links to scammers operating out of Cambodia.

Multiple Russian criminals have been detained while hiding out in other resorts including Pattaya, which in recent years gained a reputation as a base for fugitive Russian mafia figures.

While authorities in Phuket stress that the overwhelming majority of Thailand’s Russian population is law-abiding, some Russians in Phuket express concern about their nationality being unfairly singled out.

“Even the criminals people see may not be Russians,” Russian expat Sergey Malinin, a tour operator who has lived in Thailand for 25 years, told Al Jazeera.

“To Thai people, all of them are Russians even though they may be Uzbeks, Ukrainians, Georgians”.

Malinin said some Russians work illegally due to Thailand’s restrictive laws on foreign workers, but the big picture is growing cultural and economic ties between the countries.

“Some Russians become criminals because they don’t have legal work in Thailand. They can’t get any more visas… they have money but they can’t find jobs, the only way to stay is to break the law,” he said.

Russians’ substantial contribution to the local economy is especially significant given the sluggish post-pandemic rebound of tourism from China, which is grappling with a slowing economy.

Luxury boat seller Simpsonmarine Phuket said its biggest customers are Russians buying yachts worth many millions of dollars, with the number of Russian buyers rising by 10-20 percent since the war.

On August 15, the Phuket Tourist Association sent a delegation to St Petersburg for a roadshow aimed at pulling in revenue of about $1.7bn from its number-one market, Thai state media reported.

Meanwhile, real estate prices are surging as Russians seek homes away from a conflict with no end in sight.

“Phuket has a limited amount of land, so real estate on the paradise island will only go up in price,” Sofia Malygaeva, a Russian property agent based in Phuket told Al Jazeera, adding that many customers are buying off-plan for 20-30 million baht ($565-$850,000).

“Customers are from Moscow to Siberia, they still have businesses in Russia or work remotely, but they want their family to live in Phuket with kids,” she added.

“They understand it’s a safe place to be.”