(Bloomberg) — President Vladimir Putin has spent six years and more than $11 billion preparing nearly a dozen Russian cities to host the soccer World Cup, the biggest such event the country’s held since the collapse of the Soviet Union.
As millions of fans spread out across European Russia over the next four weeks, the Kremlin is hoping to show a friendlier face and break some of the international isolation Russia’s suffered in the years since it annexed Crimea from Ukraine in 2014. From Yekaterinburg in the Urals to Kaliningrad on the Baltic Sea, the championship reaches cities few foreign visitors have seen before.
Still, as high as the price tag is, economists say the massive effort won’t be enough to generate much of a blip in Russia’s almost $1.5 trillion economy. Moody’s Investors Service said last month that any boost will be limited and short-lived, well short of the fillip provided by the 2014 Winter Olympic Games in Sochi, which cost a record $50 billion. Economists say the best Russia can hope for this time around is a modest gain in the ruble.
Putin plans to attend the opening game on Thursday between Russia and Saudi Arabia at Moscow’s Luzhniki stadium, which will also stage the cup final on July 15. The president has admitted that he doesn’t think the Russian team is going to do very well, and he told Chinese reporters last week that his favorites include Spain, Germany, Argentina and Brazil. Russia is the lowest-rated World Cup team in FIFA’s world rankings at 70th.
Hosting the tournament successfully “will contribute on the margins to easing Russia’s isolation from Europe,” said Vladimir Frolov, a former Russian diplomat who’s now a foreign policy analyst in Moscow.
Whether the World Cup is enough of a draw to jump-start tourism in smaller cities like Saransk — itself the butt of jokes in Russia — and Samara after the tournament is over will determine how much payoff there is for Putin’s investment.
“Raising Russia’s brand value with a welcoming, peaceful, and fun sporting event” may help provide a longer lasting effect from hosting the World Cup, analysts at UBS Group AG said in a report in May. “Unfortunately, years of efforts and funds can be lost in a heartbeat when it comes to reputation, as recent geopolitical tensions show.”
(Updates with analyst comment in fifth paragraph.)