The Red Slope to Caviar Road

The Russian magazine Esquire came up with some pretty shocking figures: It would be cheaper to pave one 48km road for the Sochi Olympics with elite beluga caviar than asphalt. The total cost would come in at a cool 227 billion rubles, or $160 million per kilometer – five times higher than what it costs to build an equivalent stretch of Autobahn! (It’s also 2/3 of what Russia spent on all road construction in 2009). But even under the most charitable assumptions, that the Sochi road will be built to the highest traction and environmental standards, doesn’t this mean that at least 80% of the Sochi road funds are being stolen?

Not really. The only problem with looking at Russia through this failed state prism, without bothering to corroborate sources, is that in no sense can the Adler-Krasnaya Polyana route be described as just a “roadway”. Intended to be completed within 3 years in an area with a poorly developed infrastructure, this so-called “road” also includes a high-speed railway, more than 50 bridges, and 27km of tunnels over mountainous, ecologically-fragile terrain!

[This is what these journalists called a “road”!]

So once we establish the elementary fact that this is more than just a road, things begin to make a lot more sense. True, the $8bn figure may well be significantly inflated by the corruption, kickbacks and monopoly price distortions typical of the Russian construction industry. However, this is not the blatant money-laundering operation implied by media outlets like The Other Russia when they imply that these huge numbers are only being used to build one single, 48km road.

I’ll end this short post by making three observations. First, corruption is bad enough in Russia without exaggerating it into Congo-like dimensions, where $1bn of gold exports bring in just $37k for the state treasury! (Closer to the Homeland, Massachusetts managed to spend $15bn, rising to $22bn with interest payments, on a few kilometers of shoddily-constructed tunnels). Now this isn’t to play a whataboutist game or imply that the US is more corrupt than Russia (it quite simply isn’t). But some degree of comparative perspective is certainly needed.

Second, the real issue at hand is the social justice of spending so many state funds on an elite ski resort that only the upper quartile of Russians and foreigners can enjoy. On the one hand, the national prestige of holding an Olympics is at stake. On the other hand, it diverts money – along with white elephants like the Far Eastern bridge to nowhere – from other priorities such as the general national infrastructure. This should be the real locus of the debate.

H/t @ the commentators on this post by Julia Ioffe for some links and ideas.


  1. Great post, Anatoly. The last paragraph especially. For the reasons, I am not sure are applicable to everyone, I prefer the open-end “see for yourself” arguments to forceful statements. Cheers

    • As my favorite school teacher noted, the media & even academia in Anglo-Saxon countries tends to take more forceful positions tightly argued to a conclusion; their European equivalents tend to be somewhat more ambiguous. I agree, and think this might be related to core legal differences between the adversarial and inquisitorial system.

      Both approaches have their advantages and disadvantages, IMO. In this case, I stuck with “see for yourself” because my own opinion is split.

  2. I agree, but the differences are better defined as “cultural” (as opposed to “inquisitorial” etc).
    Since you are writing in English and (probably) for Americans (which is a special case too) – your judgment is, perhaps, better than mine. (and while my opinion on the main topic is also split, I suspect that in the absence of more or less well-defined external threat, the Russian corruption problems – especially in MVD and courts- is the highest priority – if they are not too late already with the measures to curb it). Cheers

  3. I just looked it up and it seems that the Sochi games will cost $10.85 billion. A more effective way to raise Russia’s prestige would have been to spend that money on the Russian space program. Almost any country can host the Olympics. Who CAN’T host the Olympics?

    The US space budget has just been eviscerated. If I understand this correctly, there won’t be a replacement for the shuttle after all. China is still far behind. I think Russia’s reputation would be very well served if it took this opportunity to once again become a highly visible world leader in space.

  4. donnyess says:

    “On the one hand, the national prestige of holding an Olympics is at stake.”

    Which is precisely what the USA wants to attack and destroy, the slavic pride. Do you remember the boycott in 1980? There is an historical precedent which Putin should have taken to advisement before starting on this venture.,8599,1832699,00.html

    In a conflict between Georgia and Russia which nation had the most prestige on the line during the summer games in China? It should be obvious who triggered that war and who controls the Georgian establishment. Putin stuck his head in the proverbial lions mouth both at home and abroad on this winter olympics thing and there’s no pulling out now. Somebody should have told him that hosting an olympic games is not a strategic industry:

    analog and digital electronics
    intermodal transport

    • No Name says:

      While it’s not a strategic industry investment, you’re forgetting that Sochi is a very popular resort town, even now. Those hotels, roads and other infrastructure will be heavily used regardless of the Olympics.

      In other words, the Sochi Olympic development is a low risk investment that’s practically guaranteed to provide a handsome return for Russia, the Olympics is just a good excuse/reason to do it now.

  5. Tal Sutsa says:

    Nice stylistic call in capitalizing the “H” in “Homeland.”

  6. Don’t sell Mr. Putin short. He’s used to difficult situations, and if he’s heavily invested in Sochi personally, it’s because he’s convinced it’s doable and expects it to be a success. He’s not the type to pour billions into a project that has a major chance of failing spectacularly. He was an iceman when Russia looted its treasury to spend its way out of the recession, and it worked. Leading a country like Russia is not for the faint of heart.

    The Olympics will make people who have never visited Russia, and who might otherwise never have done, visit Russia. There is a great deal of interest in it; if it turns out to be a positive experience, many of them may return as tourists. Russia will gain a world-class winter sports facility where none existed before. Although Russia will likely not make a penny on the Olympics – the host country rarely does – it is a great marketing opportunity, and a lot of investors are waiting to see how it will turn out. Russophobes would have you believe the whole venture is a hairsbreadth from cataclysmic failure, and that failure grows more likely every day. They’ve also been saying that about Russia itself, for… long now?

    Good post, Anatoly.

  7. According to what I have heard, we Czechs are building the most expensive high-ways in Europe. This is most likely the reason why no high-way leads to my provincial city (Ceske Budejovice). However in neighbouring Lower Austria and Bavaria, the outlying cities are connected with centres in Munich or Vienna.

    • “This is most likely the reason why no high-way leads to my provincial city (Ceske Budejovice).”

      Heh. I read “The Adventures of Private Svejk” in Russian translation as a kid more than 20 years ago, but I still remember the name of your city from that book. Still one of the funniest novels I’ve ever read, by the way.

  8. I can’t get the image of a caviar-paved road out of my mind.

  9. Seriously, the truth has been known for more than three years now, yet the “caviar” or “Vuitton handbag” road farce is still running around everywhere in the medias. What’s wrong with people?

    I feel like I live in the midst of some kind of low-intensity World War 3, with this torrent of (often completely disproven) sensationalist propaganda.

  10. Joseph Stans says:

    I wish the people of Sochi and Russia all the best. Some day the memories of poisoned water, having to smash you way out of toilets, not having a door or door knob on your room and being videoed in your bathroom will fade and the prestige of having hosted a winter Olympics in a semi tropical climate will settle in and everyone will feel warm and fuzzy especially now the town has an adequate waste disposal system. They may even have a safe water supply one day! And Mr. Putin – let’s see more of those nipples!