A door to a young democracy

The increasingly wealthy nation of Russia has much to give and to gain from hosting major events

Russia is the exception to the rest of the BRIC nations in that, as part of the Soviet Union, it has already been a modern global superpower. In 1970 the Soviet economy amounted to around 60 per cent of that of the US. However, as the centrally planned economy declined and the Union dissolved in 1991, a new market-based economy came into being. After a tough transition period, Russia emerged to become one of the world’s top ten largest economies with annual growth rates of up to eight per cent.

The IOC Coordination Commission met with the
organising committee in Sochi in May 2009

The Winter Games in Sochi in 2014 will be the first time that the Olympics has come to Russia since the fall of the Soviet Union. A US-led boycott meant that the 1980 Summer Olympic Games in Moscow experienced the lowest participation rate ever. The massive international interest in Sochi 2014 shows just how much has changed since then.

Dmitry Chernyshenko, CEO of the Sochi 2014 Organising Committee, appointed John Tibbs Associates (JTA) in 2006 as the lead communications consultant to develop the brand of the event with public relations agency Weber Shandwick.

“We developed the slogan ‘Gateway to the Future’, to convey the fact that the Games coming to Russia for the first time would help to bring the country’s enormous market potential closer to the Olympic and Paralympic Movement,” says Jon Tibbs. “It would allow many more consumers with rising spending power to come into direct contact with winter sports for the first time.”

The same argument applied for attracting sponsors. “This was unlocking the Russian market for the Olympic movement – giving sponsors access to a rapidly rising affluent middle class population.”

Developing sports infrastructure
The break-up of the former Soviet Union left many winter sports facilities in newly formed nations. Despite its success as one on of the major winter sports nations, Russia was left with a low level of winter sports facilities.

Hosting the Winter Olympic Games would provide an opportunity for Russia to develop sports infrastructure there. Tibbs says: “The games would produce the perfect catalyst to help Russia to build world class sports venues and completely regenerate the winter sports facilities in Russia.”

This would have two beneficial effects, Tibbs says. “It would create the facilities that would inspire millions of Russians to take up winter sports in Russia. And Russia would be able to host World Cups and World Championships in all major winter sports events, which they have not been able to do until the Games.”

Regional redevelopment
As with many successful bids, the region chosen as a host was already in need of development before the Olympics was considered.

“The federal government was planning on redeveloping this area. We considered the whole cost of the Olympic bid to be part of the redevelopment of the region. The transport, accommodation, power and utilities infrastructure necessary for the Games would be catered for in this federal target plan for the region. This meant that the Games would become the catalyst for the region’s development.”

The subtropical city of Sochi is currently a summer resort on the coast of the Black Sea – yet it is only 40km away from spectacular snow-capped mountain scenery. As a result of the successful bid, the region is now being developed into a year-round tourist resort. On 4 May 2009, Anatoly Pakhomov, the newly elected Mayor of Sochi said: “Sochi residents want their city to become a friendly environment for living and the best resort city in the world.”

Tibbs says: “The incredible benefit for the Olympic Movement is that it’s one of the most incredible sustainable legacy stories they’ve ever had, the Games being the catalyst for a complete transformation of a complete region of Russia.”

Hosting an Olympic and Paralympic Games in Russia will also bring a social legacy, Tibbs says. “Russia, as a young democracy, will be able to use the Games to speed up changes in attitude to, and accessibility for, people with disability.” Other benefits cited include increased media freedom and improving the health of the nation through greater physical activity.

Through hard times
Of all the BRIC nations, Russia has been hit hardest by the economic downturn. The conflict with Georgia and falling demand for oil took their toll: the Russian stock market fell by around 70 per cent in September 2008. A rescue plan of over USD 200bn encouraged economic growth to resume, yet at a slower rate.

Despite this, Sochi remains on time and on track. “Russia has been very badly hit but Sochi has been prioritised and no funding has been cut,” Tibbs says.

During meetings in May 2009, the IOC Coordination Commission for the event, led by its chairman Jean-Claude Killy, met with organising committee. He said: “This project has the full support of the Russian Government because it is part of a much wider regeneration of the region, in addition to being a great way for the Government to invest in this time of economic downturn.”

This is just one example of high confidence in the BRIC nations during the downturn. Russia will play a crucial role in bringing the world out of recession – not just as a source of consumers but also as a host to growing numbers of consumers from overseas.