Two momentous events marked the early part of 2014 in Eurasia: The Russian Black Sea resort town of Sochi hosted the Winter Olympics, the first games in Russia since the Soviet era. And a few hundred kilometers to the west, a long-simmering political crisis on the Crimean Peninsula reached its boiling point.
Even before the Sochi Games began, pro-Russia militias in Crimea had been taking increasingly aggressive steps to separate the autonomous region from Ukraine. A matter of weeks after the closing ceremony in Sochi, the Russian military formally intervened in Crimea. Russian President Vladimir Putin had received the support of the parliament's upper house, and Crimean voters had approved a referendum to join Russia. Moscow officially annexed the region a short time later. From there, it became embroiled in separatist disputes in two territories in the Donbas region of far eastern Ukraine, where Russia is still involved today.
The direct costs of the 2014 intervention were high for Russia. The episode prompted members of the North Atlantic Treaty Organization to significantly bolster their military presence in Eastern Europe. But perhaps most consequential from Moscow's perspective was the implementation of Western sanctions against Russia's energy, finance and defense sectors. In October 2015, Andrei Illarionov, a former economic policy adviser to Putin, declared that Russia's involvement in Ukraine had cost the country at least $94 billion per year. That loss, alongside a sharp decline in oil prices, precipitated the collapse of the ruble and the start of an economic crisis.
Given how severely the results seem to undercut Russia's long-term interests, political analysts have struggled to understand the decision to intervene in Ukraine. Many have speculated that Putin was fulfilling his desire to reacquire territory that was lost when the Soviet Union dissolved in December 1991. Members of this school of thought argue that the Russian president saw himself as the central part of a movement to return his country to its former glory as a global power. Still others depicted the adventure in Crimea as an attempt to halt NATO's expansion in Eastern Europe. An even smaller camp, however, argues that to truly understand the subject, one must first appreciate the state of Russian domestic politics before the intervention.
The State of the Russian State
Putin met with a surprising amount of domestic political criticism for the Winter Olympics in Sochi. At an estimated cost of more than $50 billion, the games held Feb. 7-23, 2014, were the most expensive Winter Olympics and the second-most expensive Olympic event in history. The overwhelming majority of the funding that came from public coffers, moreover, represented another record. Worst of all, a stunning level of corruption surrounded the construction of Sochi's Olympic infrastructure. A poll found that two-thirds of the Russian citizenry believed the state funds for the event were mishandled, according to The Daily Beast.
Kimberly Marten, a professor of political science at Barnard College, has written persuasively that Russia's takeover of Crimea in 2014 may have been staged at least in part to draw the public's attention away from Sochi. Diversionary conflict, she explains, served to distract audiences from troublesome issues at home through a "rally-around-the-flag" effect. In the years leading up to the Sochi Games, a transition of sorts had occurred in Putin's domestic political coalition. One of the components of that coalition, according to Marten, was composed of "economic internationalists," who were worried about the state of Russia's economy. The degree of corruption connected with the Sochi Games became in many ways a symbol of broader mismanagement in Moscow. And the event apparently threated to turn the group of influential economic internationalists away from Putin's vision for the country. According to this line of reasoning, the Russian president was looking for a way to divert attention at home from the rottenness at the core of the Russian economy that Sochi embodied.
Putin's Strategic Blunder?
If Marten is correct, then the Sochi Olympics present a curious case. Moscow intended the competitions to boost nationalism, thereby strengthening Putin's hold on power. In a January 2014 interview, the Russian president explicitly linked the games to the advancements the country had made under his stewardship. "There is," he said, "a strong connection between the Olympic Games, the progress in sport and the successful development of a country in general, because great sport achievements are mostly a result of effective economic and social policies." After acknowledging for years that post-Soviet Russia was ill-prepared to host an Olympic competition, Putin declared that "our economic development and economic growth [now] empower us to carry out such projects [as the Olympics]. We have become the fifth world economy. ... It is quite an achievement."
Yet, in the end, the Sochi Games threatened to upset an important piece of Putin's support network in Moscow. The Russian president appears to have entirely failed to anticipate the potential for this development, though he should have known better. The history of modern international sport includes several instances in which the costs of hosting an Olympic event became a source of domestic political embarrassment. It took Montreal three decades to pay off the enormous debt it accrued for the 1976 Summer Games, and according to multiple sources, the 2004 Athens Olympics triggered Greece's slide into financial ruin.
Had he considered the ramifications, Putin may have thought twice about bringing the Olympics to Russia. An intervention abroad is an expensive remedy to dissent at home.