international analysis and commentary

Image and economics: what’s at stake at Sochi

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The Winter Olympic Games in Sochi have crystallized the basic tenets of Russia’s uneasy relationship with the West and distilled what is becoming the country’s new identity.

When Vladimir Putin and his government conceived the Sochi Games nine years ago, the motive was twofold: give a boost to and provide an alternative agenda for the restive North Caucasus; and project an image of a new, prosperous and strong country that was able to shrug off the painful legacy of the breakup of the Soviet Union and find its deserved place among the great powers of the world.

When you enter the Sochi Olympic Park today, what you see is a big advertisement installed on the new Formula One stand stating “Russia: Great, New, Open.” This new slogan, projected by Russia, is intended to catch the attention of the West.

However, so far, the Sochi Olympics have not only failed to improve the image of Putin and Russia, they have further tarnished it. Media reports have been filled with comments on the $51 billion price tag, chronic delays and malfunctions, as well as Putin’s personal involvement in the project.

Many pundits have predicted that, similar to the 1980 Summer Olympics in Moscow, the Sochi Games will launch an economic decline in Russia, which will in turn put Putin’s own power in jeopardy.

In addition, Russia and the West failed to build a cordial and mutually beneficial relationship in the 1990s and at the beginning of the 2000s. The West would not accept Russia as it is, demanding it conform to its rules and values, while Russia rejected the offered role of junior partner.

Despite many recent attempts to build bridges and find common ground, the relationship has become increasingly confrontational. Russia has turned to its own civilizational project with such countries as Ukraine and Georgia, forcing them to become geopolitical objects that Russia and the West compete for.

The Winter Games in Sochi have put these contentions in the spotlight and Russia’s charm offensive is failing. So far, the Games are getting negative coverage in the Western media despite numerous positive comments from visitors and athletes who seem to be enjoying their time in the Russian city

Today Sochi consists of three separate towns: two on the coast and one in the mountains, linked by a modern rail service. Four ski resorts have been built in the alpine area prompting International Olympic Committee President Thomas Bach to say, “What took decades in other parts of the world, has been achieved here in just seven years.”

Dozens of new hotels were built with the total number of rooms in Sochi reaching 41,000. Today Sochi has more hotel rooms than Moscow, which raises reasonable doubts about whether they can be filled in the post-Olympic period.

What was a provincial resort with no centralized sewage system or electricity grid and one single road connecting its sprawling parts, has turned into a modern town with several highway systems, dozens of international hotels and pedestrian zones.

In the Soviet era, Sochi was the trendy place to be. Communist party bosses, their wives and lovers would come to Sochi in a demonstration of status. At the time, the resort lacked the infrastructure necessary to host modern middle-class tourism, which is now in place.

Given the scale of the project, it is still difficult to assess to what extent corruption was involved. We do know that most contracts were given to members of Putin’s inner circle, but the rest is speculation. Due to the strict Olympic deadline, the construction had to be finished on time, even if that meant minor glitches in elevators, brown water and a lack of wireless internet in hotels hosting the media.

When the Games are over, the government hopes that many of the more than four million Russians who went to Turkey in 2013 will make Sochi their holiday destination. This, of course, will depend on many factors such as prices and services. The ultimate goal, however, is to make Sochi an international year-round resort that will rival the French Riviera and the Alps.

To that extent, it will not be enough to market to Russian tourists alone. Foreigners will have to be targeted and they could be reluctant after seeing the politically-driven negative reports about the Games.

In that sense, the West’s negative stance toward Putin and the Sochi project could become a self-fulfilling prophecy. As Russia fails to reach out and present a better picture of itself to the world, it could revert to more isolation. The recent conservative and nationalist turn in Russia’s internal policy is a good example of this development.

The stark reality is that the issue of gay rights – which gained great prominence at the eve of the Games – is marginal to most Russians. And according to a recent poll, 51% of Russians believe that gay people should be either legally persecuted or given psychiatric treatment.[1]

This is not to say that Russians are right about LGBT rights, however we have to look at reality rather than what appeals to our mindset and personal circumstances. In terms of individual liberties, Russia can be described as a conservative country that is aiming to catch up economically with the most developed countries in the world. At the moment, it seems that Russia’s leadership is thinking that the only way to develop the country economically is to preserve its political stability and introduce a limited amount of reforms in order to make investment easier.

Development of the country’s crippling infrastructure is a priority too. Russia’s highly centralized system of governance determines the appearance of so-called megaprojects. Before Sochi, the government revamped the city of Kazan to host the 2013 Summer Universiade. Before Kazan, huge funds were spent on the city of Vladivostok to give a boost to the Far East.

It is still unclear to what extent this policy will be effective. Russia needs private investment, which is often driven away by the country’s image. It seems that launching vast projects that are aimed at improving that image does not work. Russia’s government and its ordinary citizens have to try harder to explain their country to the world, while the West must accept Russia as it is and recognize the country’s efforts over the last two decades – of which the Sochi Games are a vivid example.