PONARS Eurasia
  • About
    • Contact
    • Membership
      • All Members
      • Core Members
      • Collegium Members
      • Associate Members
      • About Membership
    • Ukraine Experts
    • Executive Committee
  • Policy Memos
    • List of Policy Memos
    • Submissions
  • Podcasts
  • Online Academy
  • Events
    • Past Events
  • Recommended
  • Ukraine Experts
Contacts

Address
1957 E St NW,
Washington, DC 20052

adminponars@gwu.edu
202.994.5915

NEWSLETTER
Facebook
Twitter
YouTube
Podcast
PONARS Eurasia
PONARS Eurasia
  • About
    • Contact
    • Membership
      • All Members
      • Core Members
      • Collegium Members
      • Associate Members
      • About Membership
    • Ukraine Experts
    • Executive Committee
  • Policy Memos
    • List of Policy Memos
    • Submissions
  • Podcasts
  • Online Academy
  • Events
    • Past Events
  • Recommended
  • Ukraine Experts
DIGITAL RESOURCES
digital resources

Bookstore 📚

Knowledge Hub

Course Syllabi

Point & Counterpoint

Policy Perspectives

RECOMMENDED
  • The Determinants of Assistance to Ukrainian and Syrian Refugees | New Voices on Eurasia with Volha Charnysh (Feb. 16)

    View
  • Conflicts in the North Caucasus Since 1991 | PONARS Eurasia Online Academy

    View
  • Will Ukraine Wind Up Making Territorial Concessions to Russia? Foreign Affairs Asks the Experts

    View
  • Pro-Kremlin Propaganda’s Failure in Ukraine | New Voices on Eurasia with Aaron Erlich (Jan. 19)

    View
  • Kyiv-Washington Relations in Times of Colossal War: The Ultimate Test of a Strategic Partnership

    View
RSS PONARS Eurasia Podcast
  • The Putin-Xi Summit: What's New In Their Joint Communique ? February 23, 2022
    In this week’s PONARS Eurasia Podcast, Maria Lipman speaks with Russian China experts Vita Spivak and Alexander Gabuev about the February meeting between Vladimir Putin and Xi Jinping, and what it may tell us about where the Russian-Chinese relationship is headed.
  • Exploring the Russian Courts' Ruling to Liquidate the Memorial Society January 28, 2022
    In this week’s PONARS Eurasia Podcast, Maria Lipman chats with scholars Kelly Smith and Benjamin Nathans about the history, achievements, and impending shutdown of the Memorial Society, Russia's oldest and most venerable civic organization, and what its imminent liquidation portends for the Russian civil society.
  • Russia's 2021 census and the Kremlin's nationalities policy [Lipman Series 2021] December 9, 2021
    In this week’s PONARS Eurasia Podcast, Maria Lipman chats with social scientist Andrey Shcherbak about the quality of the data collected in the recent population census and the goals of Vladimir Putin's government's nationalities policy
  • Active citizens of any kind are under threat [Lipman Series 2021] November 5, 2021
    In this week’s PONARS Eurasia Podcast, Maria Lipman chats with Alexander Verkhovsky about the Kremlin's ever expanding toolkit against political and civic activists, journalists, and other dissidents.
  • Russia's Legislative Elections followup [Lipman Series 2021] October 4, 2021
    In this week’s PONARS Eurasia Podcast, Maria Lipman chats with Tanya Lokot and Nikolay Petrov about the results of Russia’s legislative elections and about what comes next.
  • Why Is the Kremlin Nervous? [Lipman Series 2021] September 14, 2021
    In this week’s PONARS Eurasia Podcast, Maria Lipman chats with Ben Noble and Nikolay Petrov about Russia’s September 17-19 legislative elections, repressive measures against electoral challengers, and whether to expect anything other than preordained results.
  • Vaccine Hesitancy in Russia, France, and the United States [Lipman Series 2021] August 31, 2021
    In this week's PONARS Eurasia Podcast episode, Maria Lipman chats with Denis Volkov, Naira Davlashyan, and Peter Slevin about why COVID-19 vaccination rates are still so low across the globe, comparing vaccine hesitant constituencies across Russia, France, and the United States.  
  • Is Russia Becoming More Soviet? [Lipman Series 2021] July 26, 2021
      In a new PONARS Eurasia Podcast episode, Maria Lipman chats with Maxim Trudolyubov about the current tightening of the Russian political sphere, asking whether or not it’s helpful to draw comparisons to the late Soviet period.
  • The Evolution of Russia's Political Regime [Lipman Series 2021] June 21, 2021
    In this week's episode of the PONARS Eurasia Podcast, Maria Lipman chats with Grigory Golosov and Henry Hale about the evolution of Russia's political regime, and what to expect in the lead-up to September's Duma elections.
  • Volodymyr Zelensky: Year Two [Lipman Series 2021] May 24, 2021
    In this week's episode of the PONARS Eurasia Podcast, Maria Lipman chats with Sergiy Kudelia and Georgiy Kasianov about Ukrainian President Zelensky's second year in office, and how he has handled the political turbulence of the past year.
  • Policy Memos | Аналитика

Sochi 2014: The Political Economy of Russia’s Mega-Projects

  • September 27, 2013
  • Robert Orttung

Billions of people around the world watch the Olympics and even more viewers tune in to the World Cup soccer championship. These events not only draw large audiences, but many people are willing to interrupt their daily schedule to watch them.            

Such games are always a mix of commerce and politics. Traditionally, big cities in Western countries with developed democracies and advanced market economies hosted such events in an effort to boost their international profile on the global tourist market, hopefully influencing more visitors to vacation nearby while spending money in local hotels and restaurants. Of course, national leaders recognized the political possibilities of the Olympic Games early on. Hitler used the 1936 Berlin Olympics to promote Nazism while Japan welcomed the world to Tokyo in 1964 to announce its return to the international community after World War Two. The Soviets recognized the propaganda possibilities when they joined the Olympic movement in 1952, and they hoped to showcase socialist successes in Moscow in 1980, although the invasion of Afghanistan and the subsequent U.S. boycott crimped their plans.

Vladimir Putin, an avid sportsman, needed little convincing that bringing the Olympics back to Russia was a good idea. Most likely the idea for hosting the Olympics, and the enormous construction projects associated with them, developed with the input of oligarch Vladimir Potanin and Krasnodar Krai governor Aleksandr Tkachev, but Putin has since made the Sochi mega-event a personal priority. The games serve three primary functions for his regime: building Russia’s international image, defining the priorities of regional development, and maintaining regime support among important elite groups and the masses.

International Image Building

The International Olympic Committee’s decision to award the 2014 games to Russia at the 2007 meeting in Guatemala marked a moment of success for Putin personally and for Russia as a country. After the humiliation of the collapse of the Soviet Union and the economic decline of the 1990s, Russia sought to use the Olympics as a way to proclaim that it had emerged from a decade of chaotic change with the strength and vitality to host the world’s premier athletes at a planned state-of-the-art winter resort.

Flush with oil money and the confidence flowing from having imposed his stamp on Russian politics, Putin sought to use the Olympics as a way of showing that Russia could compete effectively in the global capitalist system. Unlike the earlier Berlin or Moscow games, these Olympics did not espouse a particular ideology. Rather they sought to show that Russia could manage its affairs no worse than the West and stood in the same rank with emerging countries like China, South Africa, and Brazil, who had also recently hosted or won bids to organize similar global events.

Regional Development

Mega-projects in Russia serve as a de facto regional development program in the absence of more coherent priority-setting or policy-making processes. Building on a Soviet-era legacy of projects, such as Magnitogorsk, ”virgin lands,” and the Baikal-Amur railway, Russia today has developed a string of mega-events that spin off mega-projects that benefit select sites. The result has directed tremendous resources to a small group of cities, including Vladivostok ($20 billion in projects to host the 2012 APEC conference), Kazan (nearly $7 billion to host the July 2013 Universiade), Sochi ($50 billion for the Olympics so far), and the 11 cities slated to host the 2018 World Cup.

Focusing scarce development resources on these specific cities de facto resolves a long-running debate over Russia’s regional development policy. The government has offered various plans that would either work to bring all regions up to a minimal level of development or focus resources on “locomotive” regions that already show promising results in the hopes that their success will raise the level of nearby poorer regions. Pursuing mega-projects effectively settles the debate in favor of the relatively successful cities by devoting high priority and extensive resources to their development.

Mega-projects provide a vehicle well suited for Russia’s centralized and vertically organized policy-making process. The basic decision to pursue mega-events and mega-projects is made at the top. The projects are then funded through extensive access to state resources. Of course, lower-level policymakers, urban planning experts, implementing contractors, and civil society groups have some impact on how the projects are implemented and what their impact is on the ground. But, ultimately, the key decisions and resource allocations are made in the Kremlin and there is little public participation in the process.

Maintaining Regime Stability

The third function of Russia’s mega-projects is ensuring support for the ruling regime. The Olympics provide the regime with benefits on both mass and elite levels. At the mass level, the Olympic project serves as a replacement for ideology in an era when the Russian state has not been able to define what the Russian idea consists of. Proponents of “Olympism” claim that it promotes world peace by bringing young people together for regular sporting competitions. With teams organized by country, in practice the games promote a strong degree of nationalism, as countries compete with each other to win as many medals as possible.

This combination of a peaceful higher purpose and nationalist promotion serves Putin’s key domestic political interest of ensuring that he and his allies will remain in power as long as possible. Organizing mega-events gives the population something to be proud of; thereby, the regime hopes, it imbues a form of performance legitimacy on the current leadership. Putin and his colleagues can claim that they are building Russia’s future in an effective manner by organizing mega-events and the new urban infrastructure and prosperity that they will bring to Russian cities. 

The purpose of the games in this sense is to demobilize Russian citizens. The Olympics provide soaring narratives for state television, which disseminates information to the vast majority of the Russian population and often sets the tone for the broader debate on the internet as well. By demonstrating the progress that Russia and its key cities are making under Putin’s leadership, Russia’s official media works to deprive activists of a cause for organizing against the regime.

In addition to facilitating mass quiescence, the games also provide a useful way of distributing rents to powerful elite groups whose support Putin needs to remain in power. These factions include, most importantly, the oligarchs and the siloviki. The games provide a reason to set aside large sums of money from the state budget that can be appropriated by these groups. One of the central mechanisms for distributing these funds is Olympstroy, the special state corporation set up to organize and oversee preparations for the games. According to Russian law, state corporations are special entities that control and distribute public funds but are not subject to the same accountability or oversight as regular government agencies or private corporations. Russian researchers have demonstrated that Olympstroy pays up to three times as much as Western counterparts to build similar structures. This extra money is presumably going to insider rents. Using mega-project funds in this manner supports Russia’s neo-patrimonial system of networks, which, in turn, provide a basis for maintaining the current leadership in power.

Small Circle of Winners

The implications of Russia’s growing appetite for mega-projects for its development prospects are bleak. The first consequence is that there is only a small circle of elites that benefit directly from the projects. This group is, first of all, Putin and his immediate circle of oligarchs and siloviki, who depend on his continued rule to maintain their power and wealth. These groups control and benefit from massive state spending, much of which is redirected from the ostensible purpose of the projects into their personal accounts.

The second circle of winners is the leading cities who secure direct support from the immense infrastructure investments related to Russia’s participation in such projects. Residents in cities like Sochi, Kazan, and Vladivostok receive federal funding for directed projects at a time when other development projects, such as a plan for the overall development of the Far East or the North Caucasus, go unfunded. Tying state funding to high-profile mega-events means that the leading cities will receive preferential access to federal investment funds.

Questionable Overall Benefits

While small groups and a handful of cities benefit from increased spending, the implications for society at large are less sanguine. There is little evidence that investing in mega-projects produces long-term positive developments for cities. In fact, research on past Olympics and World Cup events has shown plenty of evidence to the contrary. Host countries and cities can be saddled with numerous white elephant stadiums and other structures that serve no purpose once the games are over. While Sochi hopes for a tourist boom after the Olympic closing ceremonies, it is not clear that the city will be able to compete with other destinations that can provide better service and amenities at lower prices. Some of the infrastructure investments will undoubtedly benefit residents, ranging from an upgraded airport to new roads, sewers, and electricity generating power plants. However, it is by no means clear that the rushed decision making and development of these specific facilities was the best way to use the money spent. Alternative development models might have provided more sustainable infrastructure better designed to meet residents’ needs rather than the specific requirements of a sports event. While such questions afflict all Olympic games regardless of where they are held, mega-events can prove particularly costly in a semi-peripheral country like Russia where development and investment needs are immense.

Overall, the Sochi Olympics, already dubbed the most expensive in history, seem much better designed to suit the short-term needs of Russia’s rulers than the long-term aspirations of its population. In this sense, they provide a useful case study of Russia’s overall political economy.

Memo #:
289
Series:
2
PDF:
Pepm_289_Orttung_Sept2013.pdf
Related Topics
  • Orttung
  • Russia
  • Sochi
Previous Article
  • Policy Memos | Аналитика

The Politics of Sports Mega-Events in Russia: Kazan, Sochi, and Beyond

  • September 27, 2013
  • Andrey Makarychev
View
Next Article
  • Policy Memos | Аналитика

Managing the Threat of an Olympics Boycott: International Pressure and Russia’s Response

  • September 27, 2013
  • Sufian Zhemukhov
View
You May Also Like
View
  • Policy Memos | Аналитика

National Security in Local Hands? How Local Authorities Contribute to Ukraine’s Resilience

  • Oleksandra Keudel and Oksana Huss
  • January 25, 2023
View
  • Policy Memos | Аналитика

Silence Matters: Self-Censorship and War in Russia

  • Guzel Yusupova
  • January 19, 2023
View
  • Policy Memos | Аналитика

Ethnic Variation in Support for Putin and the Invasion of Ukraine

  • Kyle L. Marquardt
  • January 12, 2023
View
  • Policy Memos | Аналитика

Russian Political Exiles: The Challenges of Forging an Anti-War Movement

  • Gulnaz Sibgatullina
  • January 5, 2023
View
  • Policy Memos | Аналитика

To Justify, Demonize, Normalize: Putin’s Language of War and Central Asian Neutrality

  • Emil Dzhuraev
  • December 23, 2022
View
  • Policy Memos | Аналитика

All Fraud Is Not Created Equal: Recent Electoral Manipulation Practices are Less Likely to Incite Public Ire

  • Hannah Chapman
  • December 19, 2022
View
  • Policy Memos | Аналитика

Abkhazia and South Ossetia: Second-Order Effects of the Russia-Ukraine War

  • Sufian Zhemukhov
  • December 19, 2022
View
  • Policy Memos | Аналитика

The Russian Migration to Georgia: Threats or Opportunities?

  • Kornely Kakachia and Salome Kandelaki
  • December 19, 2022

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

PONARS Eurasia
  • About
  • Membership
  • Policy Memos
  • Recommended
  • Events
Powered by narva.io

Permissions & Citation Guidelines

Input your search keywords and press Enter.