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Let the Games Begin–And Then What?

Chaos, corruption and ludicrous expenditure have created an Olympic resort complex at and near Russia’s Black Sea resort. They may also have compromised its future.

by Guillaume Pitron on February 10, 2014


©2014 Le Monde diplomatique; distributed by Agence Global

Fake palm trees in fluorescent green neon line the road from Sochi airport to the city center. Soon real ones appear, a natural dividing line between the Black Sea coast and the foothills of the Caucasus. “Welcome to paradise,” says Sochi resident Igor Sizov. “Our climate is among the best in the world, similar to the Côte d’Azur.” Sochi enjoys 300 days of sunshine a year and an average temperature of 58 F (its highest recorded temperature was 103 in July 2000). In November, it was 68, and people were strolling along the quayside, eating ice cream or sunbathing on gray pebble beaches.

Sochi, a short distance from the Abkhazian border, contrasts sharply with conventional images of Russia: the subarctic taiga, the vast industrial complexes of the Urals. In the Soviet era, this seaside resort was popular with the middle classes, the Communist nomenklatura, and Stalin himself, and was held to epitomize the success of socialism. “During the cold war, Westerners were only allowed to travel in three areas of the USSR: Moscow, St Petersburg, and Sochi,” Sizov says. The Communist bloc collapsed 23 years ago, but the symbolism remains. From Feb. 7 to 23, Russia’s summer capital will be on display to the world as host of the Winter Olympics, a seemingly ill-suited role given its subtropical climate.

“Two-thirds of Russia is frozen under permafrost. Why organize these Games in the tropics?” wonders Ivan Nechepurenko, a journalist for the Moscow Times. But Sochi is an excellent choice, preferable to the wastes of the Urals or the Altai mountains of Central Asia. It’s well served by the travel infrastructure of the Krasnodar region, and there is excellent snow cover on the ski slopes of Krasnaya Polyana, just over 30 miles away in the northern Caucasus. Sochi is also the personal choice of Vladimir Putin, who loves the city and expended considerable political capital promoting Russia’s bid to the International Olympic Committee (IOC) between 2005 and 2007.

Nechepurenko says that the technical feat of hosting Russia’s first Olympic Games in the post-Soviet era in an exceptional setting indicates its strong desire to push the boundaries of achievement: The biggest country on the planet is attempting to pull off something extraordinary to match the scale of its ambitions. Russia’s pride is evident in the geopolitical challenges it has tackled. As recently as 2009, Russian shells were fired on neighboring Georgia, to which Sochi formerly belonged. Jihadists in the Caucasus have vowed to sabotage the Games. The Olympic construction project has gone beyond the norm, too: Vancouver’s Winter Olympics in 2010, which prioritized sustainable development and low environmental impact, cost “only” $1.9 billion, whereas the Sochi Games are likely to prove the most expensive ever staged. “The costs have already risen to $51 billion,” says political analyst Maria Lipman. “And if we had an independent study that figure might well be even higher.”

The Olympic village of Krasnaya Polyana (“red clearing”) lies at the end of a road that zigzags into the mountains and is used by heavy goods vehicles, military convoys, and a few cows. It stands at an altitude of 600 meters, and, when I visited, was hidden in a cloud of dust. The cranes, trucks, and scaffolding made it hard to believe that 19,000 hotel rooms would be completed in less than 100 days. Rosa Khutor, one of four ski resorts served by the Olympic village, was ready: Built entirely by the Interros company and owned by the nickel magnate Vladimir Potanin, it will host the Alpine Slalom and Nordic Combined. Its executive director, Alexander Belokobylski, says he is “proud to show the world the best side of Russia,” a nation capable of building an infrastructure in the Caucasus in five years that rivals a half-century’s development in the French Alps.

The ice-skating, hockey and curling events will take place in the Olympic park by the sea, less than 35 miles away. “It’s all ready. We’re just putting the finishing touches,” a guide from the Olympstroy company says, detailing the features of the six air-conditioned stadiums, arranged in a ring with a total seating capacity of 70,000. Accommodations, road and rail links, electricity networks, and sewage facilities have also had to be constructed.

Since the IOC selected Sochi in July 2007, 400 building projects have been completed by more than 300 companies, employing up to 75,000 workers from all over Russia and its former satellites. When building work fell behind schedule, the authorities announced that 7,000 laborers from Dagestan and Chechnya would be taken on to enable Russia to fulfill its commitments on time.

Putin headed the project. Having run the country for so long, he will have the satisfaction of having overseen the preparations for the Games, presiding over them, and reaping the political benefits. He personally monitored the building work and made countless site visits. In recent months he has spent more time in his official residence of Bocharov Ruchei near Sochi than in the Kremlin.

Putin’s method has been to reestablish the “power vertical” at local level; that is, to reaffirm the central authority of the state, which had withered away after the fall of Communism. On the construction sites, signs of a strong, indeed authoritarian, state are visible everywhere. The money comes primarily from the windfall from the sale of the assets of the Yukos oil corporation in 2004, and from curbing the power of Russia’s oligarchs, starting with Yukos owner Mikhail Khodorkovsky, imprisoned in 2004 and pardoned in December 2013.

Fellow oligarchs Potanin and Oleg Deripaska were obliged to invest at a loss in the construction of the Rosa Khutor and Krasnaya Polyana resorts. Local officials, such as Akhmed Bilalov, who failed to fulfill their contractual obligations, have been disgraced; Bilalov, the former vice president of the Russian Olympic Committee, was dismissed in February 2013 over delays in the construction of the ski jump site. He has since fled to Germany. The media are being closely scrutinized too: “Even an earthquake with a magnitude of 5.5, which recently occurred 150 kilometers from Sochi, was completely ignored by the press,” says Alexander Valov, who runs Blog Sochi, a rare source of independent information. “Criticizing the Olympics is taboo.”

“The Olympics have already become a symbol of Putin’s legacy,” says Nechepurenko. A combination of resolve and central control ensures the president’s popularity with the electorate. The strength of his control is rivaled only by the chaos of Sochi’s breakneck modernization.

The resort used to have a woefully inadequate infrastructure. “The building work has done us a lot of good,” says Igor Sizov. In the past, there were “frequent power cuts, rudimentary public transport and an airport made of plywood.” But transforming Sochi brings side effects: Its new celebrity has attracted property developers, and the dozens of skyscrapers that recently have shot up have less to do with Olympic accommodation than fetching the best price after the Games.

The appearance of the seafront arguably has been ruined. “Russia’s only seaside resort is rushing toward suicide,” says Communist politician Ludmila Shestak. The urban development plan, adopted in 2009 and approved by the IOC, which forbade the erection of buildings over three stories, went nowhere. “City councilors”—who allegedly stand to benefit financially from developers’ profits—“granted systematic exemptions to skyscraper projects of 20 stories and above. To the extent that the exception has become the rule,” says architect Olga Kozinskaya, who resigned in 2011 from the municipal commission responsible for implementing the development plan.

Anarchy and impunity prevail in Sochi, which was “transformed overnight into a concrete jungle,” according to blogger Alexander Valov. There have been hundreds of unauthorized building projects, and corruption, which, according to leading opposition figure Boris Nemtsov, has swallowed $30 billions worth of expenditure. “Russia is still experiencing the repercussions of the chaos of the 1990s,” Olga Kozinskaya says, “and the despoiling of Sochi is the clearest symbol of this.” She believes that the Games should not have been held so soon in post-Communist Russia: “It’s obvious that our state has not had enough time to reconstruct itself.”

That’s an opinion shared by Semen Simonov, head of the local branch of the NGO Memorial. Working conditions for non-Russian nationals, who make up a third of the workforce, demonstrate the confusion that prevails on these building projects. “I am about to send the prosecutor a list of 704 employees who have not been paid since March 2013,” he says.

In his sights are several Russian and Turkish construction companies with dubious employment records: “They take on foreign temporary workers without getting them work permits, then threaten to report them to the authorities.” Uzbek victims of this trick make up the majority of the 16,000 non-Russian laborers and work for a dollar an hour. Their colleagues who are still demanding their due get caught up in a web of subcontractors, and their claims nearly always fail. “Olympstroy doesn’t seem to want to know what is going on further down the line,” said Simonov, who thinks this “organized chaos” stems from a well-developed logic of “getting the largest possible number of workers to work for the least possible money, as quickly as possible.”

At the Moscow branch of Human Rights Watch, there is unease. “However reprehensible such practices are, they are not as bad as the abuses we condemned at the Beijing Games in 2008,” says HRW member Yulia Gorbunova. Compared with the millions displaced by the Beijing Olympics, the relocation of 2,000 Russian families, in conditions Gorbunova regards as generally satisfactory, suggests the Russian authorities have been willing to mediate. But all the residents of Sochi can do is keep quiet, relegated to bit-part players in this great display of national power. “There have been too many lies, too many things simply forced through,” says Vladimir Kimaev of Environmental Watch on North Caucasus, listing systematic violations of environmental regulations since the construction work began.

After the Games’ closing ceremony, the economic issues will be more of a problem. “The executive wants to capitalize on the sports infrastructure to make Sochi a recreational zone on Russia’s southern flank,” says Alexei Mukhin, head of the Centre for Political Information. Sochi—with world-class ski slopes, a Formula 1 circuit that will host the October 2014 Grand Prix, and theme parks such as Sochi Park, a Disneyland-style attraction—is hoping to become a leisure destination for tourists from Russia, Asia and Europe. Putin’s recently appointed Minister for Construction, Housing and Utilities, Mikhail Men, has been given the task of ensuring the region’s economic viability.

So far, no strategy for long-term profitability has been devised. “The 2 million tourists expected annually will not be enough to make the infrastructure profitable,” says Dimitri Bogdanov, a businessman who runs a hotel complex in the city. The disappointing economic outlook for Russia means the middle classes are unlikely to have increased spending power. With insufficient local demand for Black Sea holidays and affluent foreigners opting for the French or Turkish coasts, Sochi might turn out to be more of an economic black hole than a symbol of Russia’s prestige.

Guillaume Pitron is a journalist and filmmaker. His work has appeared in Geo, National Geographic, L’Expansion, Challenges Les Echos, La Vie, Africa Magazine and elsewhere. Translated by George Miller.