USSR: OLYMPIC GAMES PREPARATIONS(SANITIZED)

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• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0003387227
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• Document Creation Date: June 24, 2015
• Document Release Date: July 26, 2011
• Case Number: F-2010-00530
• Publication Date: January 9, 1980

Wi*.i,. :fit l.~a ^
Central Intelligence Agency
APPROVED FOR RELEASE^ DATE:
07-20-2011
(b)(1)
(b)(3)
9 January 1980
MEMORANDUM FOR: The President /
The Vice President
Secretary of State
Secretary of Defense
Assistant to the Secretary for
National Security Affairs
SUBJECT : USSR: Olympic Games Preparations
1. The attached assessment, USSR: Olympic- Games Preparations, may
be of interest to you in light of a possible Olympic boycott. CIA
analysts believe that inside the USSR a boycott's heartening effects on
some Westernizing dissidents would be offset by reinforcement of wide-
spread tendencies to xenophobia. Internationally, a boycott would keep the
Afghan issue alive and force the Soviets to face a continued barrage of
criticism from some sections of the international community. However, the
Soviets would also be able to play the role of an aggrieved party before a
partially sympathetic international audience and to utilize international
disagreements over the boycott to exacerbate tensions between the U.S. and
non-boycotting (or reluctantly boycotting) states, probably including some
close U.S. allies.
2. As for the economic loss from a boycott, we believe it would be
small. In the main, losses would be confined to a reduction in hard
-currency revenues from tourism and broadcast rights. The Soviets expect
hard currency revenues of an estimated $250 million. Most of this income
(perhaps at least two-thirds) is in hand, however, and the Soviets, in the
event of boycott, would balk at refunding cash already received. All but
$5 million of the $74 million aid for U.S. broadcast rights, for example,
has been paid.
ore~gn tourists wishing to attend the games (at least Americans) were
required to prepay Olympic package tours by the end of 1979. Barring an
outright cancellation of the games; Moscow would argue that foreign
tourists were welcome regardless of individual cou'y participation.
EP. 79-10666, Copy No. 3 Cs , s; (L- 140
TANSFItLD TURNER
 National
Foreign
Assessment
Center
USSR: Olympic Games
Preparations
ton
ER 79-10666
GC 79-10120
PA 79-10577
December 1979
Copy 0 8 9
 Warning Notice Intelligence Sources
and Methods Involved
(WNINTEL)
National Security Unauthorized Disclosure
Information Subject to Criminal Sanctions
Dissemination Control NOFORN (NF) Not Releasable to Foreign Nationals
Abbreviations NOCONTRACT (NC) Not Releasable to Contractors or Contractor/ Consultants
PROPIN (PP) Caution-Proprietary Information Involved
NFIBONLY (NO) NFIB Departments Only
REL...
FGI
This Information Has Been Authorized for Release to...
Foreign Government Information
A microfiche copy of this docu-
ment is available from OCR/
DSB (351-7177); printed copies
from PPG/RDB (351-5203).
Regular receipt of NFAC
reports in either microfiche
or printed form can also be
arranged through PPG/RDB.
All material on this page
is unclassified.
 National
Foreign
Assessment
Center
Preparations
USSR: Olympic Games
Information available as of 7 December 1979
has been used in the preparation of this report.
or of the Office of Political Analysis
contributed to the preparation of this paper. This
and Cartographic Research, and
of the Office of Economic Re-
search, of the Office of Geographic
report was coordinated with the National Intelligence
Officer for USSR-Eastern Europe. Comments
and queries are welcome and may be addressed to
Chief, USSR/Eastern Europe Division, OER, on
onaL
ER 79-10666
GC 79-10120
PA 79-10577
December 1979
 Con is e
USSR: Olympic Games
Preparations (u)
Overview The Soviet Union worked hard to obtain the right to host the 1980 Summer
Olympics and undoubtedly considers it a showcase event of the first order. It
is engaged in a massive effort to build and renovate 99 facilities, most of
them in the capital area. Moscow probably will spend the equivalent of
about $3 billion, making the Summer Olympics the costliest to date. (u)
Moscow should be ready for opening day ceremonies, but only by reshuffling
domestic construction priorities at a time when the country already faces a
serious backlog of construction projects. Officials charged with balancing
Olympic demands in the broader context have become increasingly critical
of the amount of resources channeled into the Olympic effort. Construction
workers have been imported from other areas of the USSR, and in some
cases the USSR has contracted for foreign construction teams. Non-
Olympic building in the capital has been curtailed to keep Olympic
construction on track. Le''
The games will present the USSR with several problems. Handling the
unprecedented number of foreign tourists represents a monumental task for
authorities not attuned to Western travelers. In spite of increased hotel
capacity, new restaurants, and a major effort to train Soviet personnel in
Western tastes, Moscow will be like a tourist frontier town. Soviet leaders
will also have to cope with troublesome political issues. Team accreditation
issues such as Chinese and Taiwan, Israeli, and German representation are
sure to surface as they do before every Olympiad. Perhaps of greater concern
to organizers will be how to handle interaction between Westerners and
Soviet citizens, including possible actions by dissident Soviet groups.
On the economic front Moscow will benefit from (1) upgraded city facilities,
(2) more housing after the games are over, and (3) improved tourist
accommodations. Soviet officials can say realistically that the bulk of the
nonsport facilities would have been built whether or not Moscow hosted the
1980 Olympics. Even Olympic-related facelifting falls under the Soviet
interest in polishing Moscow's international image. As for new construction,
the Olympic Village will be added to the city's stock of rental apartments
while the main Olympic Press Center is scheduled to become the
headquarters of the Novosti Press Agency. And by all accounts the new
passenger terminal at Sheremet'yevo Airport and the new central post office
also were badly needed. (u)
on 1Mh64_
 Foreign participation is a key element in Olympic preparations in spite of
Moscow's desire to keep the Olympics a Soviet show. In areas such as
electronic support equipment and accommodations for tourists, the Soviets
simply lack the expertise to meet Western standards. Orders for Olympic-
related goods and services with Western suppliers have risen to an estimated
$500 million. L
The Soviets have launched an aggressive program to generate income to ease
the hard currency strain caused by such outlays. Expected revenues of about
$250 million should offset about one-half of the projected hard currency
Olympic costs; more than $100 million will be obtained from television
broadcast rights alone. Substantial sums also will be pulled in from foreign
visitors; the Soviets, for example, require US travelers to sign up for package
tours with a minimum 15-day itinerary in which Moscow is only one of
several stops in the USSR. Even though hard currency revenues will fall
short of costs, the Soviets have reduced the drain on foreign exchange
reserves by making extensive use of low-cost Western credits. In effect, they
have pushed their Olympic payments burden into the 1980s, when increased
earnings from tourist facilities left over from the Summer Games will be
available to offset loan payments due the West for Olympic purchases?(e'f
Indeed, Moscow may well realize a net hard currency inflow from the
Olympics: Our calculations show that, overall, the USSR's Olympic account
could be in the black by next year. Beyond 1980, the Soviets could turn a
profit even if the tourist utilization of the Olympic facilities averages only 25
percent between 1981 and 1985']
Z-OnmentiaL iv
 The Cost of the Olympics 7
Labor Mobilized for the Olympics
14
Adding Up the Costs
15
Financing the Games
17
 2. The 22nd Olympiad, Moscow, USSR
3. Organizational Structure of the 1980 Moscow Olympics 3
10. USSR: Estimated Net Hard Currency Olympic Flows
 USSR: Olympic Games
Preparations (u)
The Soviet Union is well along with preparations for
the 22nd Olympiad. The USSR looks forward to the
international prestige it expects from successfully
staging the games before worldwide audiences. The
Olympic effort also represents a reshuffling of domes-
tic priorities at a time when the leadership faces
growing economic difficulties. In political terms,
media coverage and large numbers of foreign visitors
will open the Soviet Union to an unprecedented level of
public scrutiny, in which actions by dissidents and
contacts between Western tourists and Soviet citizens
could become problems to Soviet leaders. This intelli-
gence assessment discusses these issues and explores
(1) the extent of Soviet Olympic preparations (the
status of facilities and the resources mobilized to stage
the games); (2) the economic costs faced by the USSR
and the role of Western suppliers; and (3) the means by
which the USSR is financing the games and its success
in covering costs'
Tsarist Russia was involved in the Olympic movement
from its earliest days: a Russian was one of the 12
founding members of the International Olympic Com-
mittee (IOC), and Tsarist athletes competed in several
Olympiads between 1896 and 1912. Revolutionary
Russia withdrew from the movement after World
War I and organized its own Spartakiad (USSR
Peoples' Games) and Red Sport International as
alternative sport contests. The Soviets rejoined the
Olympic movement following World War II when,
after competing in several regional European
championships, they sent athletes to the 1952 Summer
Games in Helsinki. (u)
Although Khrushchev expressed interest in hosting the
Olympic games as early as 1957, the first serious bid
came in 1970 when the USSR competed against Los
Angeles (which wanted the games as a capstone for the
bicentennial celebration) and Montreal, the eventual
J Black Sea 1--' h
Boundary representation
50431310-79 UncieBBified no~neeessar~i~a~~ho,
winner for the 1976 games. Four years later Moscow
won the bid for the 1980 Summer Games over Los
Angeles because of (a) Soviet guarantees to finance
requisite sport and tourist facilities and (b) a general
feeling among the IOC membership that the time had
come to hold the games in a Communist countrye'j
Organizational Structure
The 1980 Olympics presents an enormous challenge to
the Soviet Union-in construction, management,
provision of services, and security (figure 2). To deal
with these challenges, Moscow established the Olym-
piad-80 Organizing Committee in March 1975. It
oversees all aspects of the games-from construction
of sports facilities to the organization of the games
themselves, including fund raising, security, ticket
sales, media relations, and personnel staffing. The
Committee, working in part through commissions,
coordinates the activities of Soviet ministries, enter-
prises, and other organizations in matters related to the
games (figure 3). The Committee has been given
 The 22nd Olympiad
Moscow, USSR
Official Sites
Main Events-26 stadiums and sports
complexes in Moscow
Sailing-Tallinn
Soccer-Kiev, Minsk, Leningrad
Involves
12,700 Athletes
3,500 Judges
40,000 (estimated) Spectators
3,500 Correspondents
3,000 Broadcast technicians
2 billion Television spectators
Cost
US $3 billion
(Gross hard currency earnings-$250 million,
hard currency outlays-$500 million)
 Organizational Structure of the 1980 Moscow Olympics
PRINCIPAL SOVIET
ORGANIZATIONS
Main Administration to
prepare Moscow for the
holding of the 22nd
Olympic Games
Main Administration for
Foreign Tourism
Soyuzvneshstroyimport
(FTO for foreign
construction projects)
State Committee for
Television and Radio
Broadcasting
OLYMPIAD-80
ORGANIZING COMMITTEE
Personality Non-Olympic Position
Ignaty Novikov - Deputy Chairman of the Council
of Ministers of the USSR,
Chairman of the State Committee
for Construction Affairs
Vitaly Smirnov - Vice President of the International
Olympic Committee
Sergey Pavlov -Chairman of the USSR Committee
for Physical Culture and Sports
Vladimir - Chairman, Moscow City
Promyslov Executive Committee
Aleksandr -Vice Chairman of the International
Gresko Affairs Commission of the USSR
Sports Committee
V I. - Deputy Chairman of the RSFSR
Kochemasov Council of Ministers
A. K. Gren - Deputy Chairman of the Estonian
Council of Ministers
COMMISSIONS
Municipal Construction and Subcontracting
Sports Facilities and Technical Maintenance
Television and Radio Broadcasting
Communications
Automated Control Systems and Technical
Information
Reception and Accommodation
Transport
Municipal and Domestic Services
Catering and Trade Organization
Medical Services
Security and Public Order
Foreign Relations
Organization of the Events
Cultural Programs and Services
Selection and Production of Goods
Bearing the Olympic Emblem
Direct Control
- - Advisory Role
STAFF DEPARTMENTS
Liaison W ith the IOC
Liaison With National Olympic Committees
Protocol and Olympic Ceremonies
Press and Information
Referee Support Information
Program-Method
Foreign Relations
Technology and Construction
Supply
Logistics
Planning and Revenue
Public Relations
INTERNATIONAL
OLYMPIC COMMITTEE
USSR NATIONAL
OLYMPIC COMMITTEE
L USSR
SPORTS COMMITTEE
ADMINISTRATIONS
Propaganda
Sports Programs
 foreign trade organization status so that it can deal
directly with foreign firms to buy equipment and sell
rights to Olympic symbols. Its Commission on Security
and Public Order is headed by a Deputy Minister of
Internal Affairs while the Chief of Intourist directs the
Commission on Reception and Accommodation. The
Committee also has separate administrations for
Propaganda and Sports Programs and Staff depart-
ments for public relations, logistics, and liaison with
other Olympic groups. Smaller subordinate organizing
committees have been set up in other Olympic cities.
(u)
Members of the Committee have been chosen for their
skills, experience in sporting matters, and/or their
clout in the government bureaucracy. The Commit-
tee's Chairman, Ignatiy Novikov, brings to the Olym-
pic effort high-level experience in government and the
construction industry. One of 13 deputies to Premier
Kosygin and a voting member of the Central Commit-
tee, Novikov chairs the State Committee for Construc-
tion Affairs (Gosstroy) and is thus the highest ranking
official of that industry. His appointment undoubtedly
reflects the priority the government attaches to the
completion of Olympic sports facilities and related
building. Experience with past Olympics is being
provided by the Committee's Secretary General,
Aleksandr Gresko, who negotiated with the IOC in
_ bringing the games to Moscow and served as the
USSR's liaison officer to the Montreal Olympics.
Other leading members include Sergey Pavlov, for 11
years Chairman of the Committee for Physical
Culture and Sports and head of the USSR's National
Olympic Committee; Vladimir Promyslov, Chairman
of Moscow's Executive Committee; and Allan
Starodub, a chief TASS editor. (u)
The Montreal Contrast
Montreal's 1976 Olympic preparations offer some
object lessons for the Moscow effort in 1980. From the
beginning, the Montreal Organizing Committee
(COJO, for Comite Organisateur des Jeux
Olympiques) strove to make the Olympic Park a
spectacular artistic monument. It neglected to keep a
tight rein on costs, maintain a realistic timetable, or
avoid overly complex building methods. Minimal
cooperation between the local organizers and the
federal government in Ottawa-in part reflecting
strained feelings over the separatist movement-also
added to Montreal's Olympic difficulties. Moreover,
labor shortage and strikes compounded the effects of a
late building start. As a result, (1) planned costs were
exceeded by 500 percent, (2) the province of Quebec
and the city of Montreal were saddled with an $800
million debt despite COJO's original claim that the
Olympics would be self-financing, (3) the Olympic
stadium was embarrassingly incomplete when the
games began, and (4) the facilities found little
immediate use after the games. (u)
Moscow should be able to avoid many of Montreal's
problems, in part because of inherent features of the
Soviet system and the benefits from planning at the
national rather than local level. In addition, strikes are
rare in the USSR and the regime can employ youth
labor and the military to expedite important projects
and move manpower among regions and projects more
easily than a market economy could. Soviet organizers
also have viewed the Olympics from a different and
longer perspective than did Canadian officials. The
Soviets wish to minimize expenditures on facilities. In
particular, they are avoiding building facilities that
can only be used for the Olympics. (u)
The Spartakiad Experience
The recent Spartakiad was widely billed in both the
West and Soviet press as a dress rehearsal for next
year's games. By most accounts it was clearly a
technical success in spite of a number of organizational
difficulties that surfaced at the last minute. In addition
to visa problems that prevented some athletes from
participating in the games, the spartan facilities were
criticized by the foreign athletes. Most other problems
were minor. Difficulties reportedly were encountered
with the information system, especially with translat-
ing names into the Cyrillic alphabet before entering
them into computers and then recovering them in
original alphabets. Because the main track at Lenin
Central Stadium was not in good shape, times were
well off both world and personal records. The buildings
at Prospekt Mira were also not ready for use. Readily
acknowledging these problems, Soviet officials say
they will iron them out before the Olympics. (u)
_CVnfide"iaL 4
 Nonetheless, the Spartakiad was not a true test.
Foreign representation was small, as few world class
athletes from the West accepted Soviet invitations to
compete. More important, spectators were not encour-
aged to attend; queried about the absence of specta-
tors, Soviet officials blamed the poor showing on
unseasonable weather. Thus a full blown test of
Olympic readiness will not come until next summer
when record numbers of tourists descend on Moscow.
(u)
Moscow will be facing a number of foreign political
problems prior to the Summer Olympic Games: the
dilemma of China and Taiwan, the participation by
nations not recognized by or unfriendly to the USSR,
the participation of the Federal Republic of Germany
and West Berlin, and the threat of a Third World
boycott. The leadership also realizes that the unique
publicity of international sport provides a danger of
ideological contamination as well as an opportunity for
national exhibition. It will be difficult for the Olympic
host to keep tourists from observing (and judging) the
Soviet lifestyle and standard of living. It may also be
hard to conceal from their own citizens the conspicuous
wealth foreigners will display at the games. Neverthe-
less, the Soviets have committed their international
prestige to holding the games and, on balance, we think
they will want the games to go forward with as little
incident as possible. (u)
The Team Credentials Issue
Most of the issues involving representation have
carried over from past Olympics. They put the USSR
in an especially uncomfortable position, however,
because in the past it has openly favored one partici-
pant in each of the controversies. (u)
China-Taiwan. In late November the IOC approved a
resolution that assures the participation of a PRC team
in Olympic competition. The People's Republic of
China would be allowed to participate as a legitimate
member of the IOC. Taiwan, which would not be
allowed to use its flag or anthem, would compete under
the aegis of the "Taipei Olympic Committee of
China." The IOC decision comes close to meeting
Beijing's demand that its team be the only Chinese
national team. Moscow wants the PRC to participate
in the games without incident, and would particularly
relish any propaganda benefits it might gain in pursuit
of improved relations with China. To allow Taiwan,
but not Beijing, into Moscow would have provided a
spectacle of the world's first "socialist Olympics"
without the presence of the world's most populous
Communist state. (u)
Israel. It is too early to predict how the Soviets will
handle the issue of participation by nations they do not
recognize, such as Israel. The Soviets do not have a flat
policy of boycotting contacts with Israel. Although
they did not invite Israel to the Spartakiad games this
summer, Moscow on many other occasions has hosted
Israeli groups and delegations. Since sporting relations
involve only tacit diplomatic recognition, the Soviets
could admit Israeli athletes and still maintain an
official policy of nonrecognition and opposition to
Zionism. Moscow could explain its action by citing the
Olympic Code. According to the Code, individuals
participate as private individuals even though they
may march in opening and closing parades in national
groups and with national symbols-such as anthems
and flag hoistings. If Moscow did this, it might
accompany its action with stepped up anti-Israeli
propaganda. (u)
West Germany/Berlin. Citing the Olympic Code could
also be a way for the Soviets to handle the question of
participation in the games by athletes from West
Berlin and West Germany. Despite the existence of
two German teams, West Germany still sends its
athletes to sporting events in uniforms reading
"Deutschland," espousing the theme that it is the true
representative of the German nation. Under Soviet
pressure Bonn has apparently agreed to send its
athletes to Moscow in "West German" uniforms.
Although the USSR does not recognize West Berlin as
part of FRG territory, Moscow, in return, has agreed
to the presence of West Berlin Olympic athletes on the
West German team. The Soviets still could require the
West Berliners to be singled out in some manner,
perhaps by proposing a formula under which they
would march as a separate unit behind the West
German delegation. (u)
 Third World Boycott. The fear of a Third World
boycott of the games is a worry to Moscow. (At the
Montreal Games athletes from 28 African countries
and Guyana and Iraq walked out rather than compete
against New Zealand, which had sports ties with South
Africa.) To ensure Third World attendance, the
Soviets recently reaffirmed their intention to ban
South Africa and Rhodesia from the 1980 Olympics.
The Chairman of the Soviet Olympic Committee,
Ignatiy Novikov, has said that the Soviet Union,
agreeing with the African nations, "actively advocates
the exclusion of the racists of the Republic of South
Africa and Rhodesia from all international sports
federations." To ensure future Third World good will
and participation in the Olympics, Moscow may pick
up the tab for many of the Third World teams as it did
for Spartakiad. (u)
Internal Control Problems
Moscow's first priority for the 1980 Summer Olympics
clearly is to present to the world a smoothly run,
efficiently produced pageant. To accomplish this, the
regime must be prepared for the security problems
created by the multinational aspect of the games and
the incursion of foreign tourists and reporters. In
addition, the authorities must deal with the expected
demonstrations by Soviet dissidents and human-rights
activists and protests from foreign countries and
organizations in such a way as to minimize unfavor-
able publicity. (u)
The Committee for State Security (KGB) and the
Ministry of Internal Affairs (MVD) have the primary
responsibility for ensuring a trouble-free Olympiad.
Their personnel will be increased during the games,
particularly in Moscow, to cope with the large crowds
and to provide surveillance of likely troublemakers.
Tight control of internal travel will keep unauthorized
Soviet tourists out of Moscow, and tickets for the
competitions will be distributed internally by trade
union and youth organizations. (u)
Effective control can be maintained over most of the
foreign visitors through the usual Soviet restrictions on
hotel and travel reservations. The USSR hopes to
prevent an embarrassing tourist overflow by strictly
controlling-via a fairly rapid turnover-the number
of foreigners in Moscow at any one time. Western
countries are being allocated a set number of visas for
travel to the USSR during the games, with allocations
based on the size of the nation's Olympic contingent,
its population, and the number of tourists from the
country that have traveled to the Soviet Union in the
past. Only travelers who have accommodations re-
served through Intourist via the officially designated
travel representative in their home country will be
granted visas.
The United States has been allocated the largest block
of these visas (18,000) while West European countries
will get about 50,000. Each of the 8,000 beds in the
city set aside for Americans during the Olympics will
turn over two to three times during the 16-day
Olympics. Each American tourist must sign up for a
two- or three-week tour allowing for only six nights in
Moscow. Time not spent at the games will be filled
with tightly scheduled sightseeing, lectures, and con-
certs. Foreigners who succeed in breaking away from
their tour groups to strike out on their own can expect
close surveillance. U1
From Moscow's point of view, the most troublesome
foreign visitors will be found among the approximately
3,500 newspaper and television reporters covering the
games. To keep reporters under control, ultramodern
press centers have been set up to provide them all the
information they should need on Olympic activities
and all accredited journalists are to be housed at the
new Kosmos Hotel. The authorities, no doubt, will
attempt to restrict the media to certain Olympic areas,
but preventing all contact between reporters and
publicity-seeking dissidents may prove difficult. NBC,
for example, reportedly plans to use five mobile vans as
part of its television coverage. lJ
The determination of Soviet dissidents, refuseniks, and
emigre groups to use the Olympics as a platform for
publicity could prompt the authorities to take preven-
tive action before the games begin. The most trouble-
some dissidents will probably be removed from circula-
tion before the games. Although some may be arrested
and charged with a violation of the Criminal Code, the
majority will most likely simply be detained indefi-
nitely outside Moscow, without having formal charges
lodged against them. In a possibly related develop-
ment, the Moscow dissident community noted increas-
ing harassment of Jewish and human rights activists in
the fall of 1979 . (
 The regime probably does not look for trouble from the
ordinary Soviet citizen during the Olympics. Never-
theless, recent decrees from the Central Committee of
the Communist Party of the Soviet Union, on improv-
ing the maintenance of law and order (September
1979) and on strengthening ideological indoctrination
(April 1979) have implications for control of the Soviet
public during the games. For example, the law and
order decree came down hard against drunkenness, a
problem which is often obvious to visitors to the Soviet
Union. A followup editorial in Pravda attacked
failures by law enforcement units in reducing crimes in
public places, a certain embarrassment if Olympic
tourists are victims. (u)
Two members of the top leadership already have
directly warned the Soviet public to beware of ideologi-
cal contamination from Olympic visitors. In May
1979, Moscow city party chief Viktor Grishin advised
Muscovites who come in contact with these visitors to
stress the advantages of the Soviet way of life and at
the same time rebuff "propaganda of ideas and
principles alien to us." Georgian party chief Eduard
Shevardnadze was even blunter when he told a meeting
of republic party officials in June 1979 that "forces" in
the world were preparing "not only for sporting battles
but also political and ideological battles" and that
groups hostile to the Soviet Union intended to use the
Olympics to carry out "ideological sabotage." Such
admonitions will probably increase as the opening of
the games draws nearer. (u)
Students in Moscow are being warned to stay away
from Olympic tourists, who, the authorities claim, are
hostile to the Soviet lifestyle. Youngsters are being told
to report offers of gifts to local authorities. According
to some sources, school children already are being
signed up for summer camps and excursions out of the
city, and the school term will end one month earlye'j
Other measures may be aimed at preventing the
overuse of limited accommodations and services during
the Olympics and to avert a run on consumer goods "on
display" to impress Westerners. There have been
rumors that Moscow would be transformed into a
coupon zone for the Olympics to prevent Soviet citizens
from buying up consumer goods supplies. A Soviet
foreign trade bank official, however, has published a
denial of these rumors.'
Finally, Soviet authorities are showing increased
interest in procuring surveillance devices from West-
ern firms. This past summer, a West German represen-
tative of a US firm received a request for a quotation
for 1,000 transmitters and 10 automatic direction
finders.' The possibility of any kind of terrorist strike
like that at Munich in 1972 seems minimal, given the
strictness of the Soviets' system and the controls placed
on the influx of tourists. (s
Soviet Olympic planners believe they will be in a strong
position to reap the benefits from a showy international
event. Above all, the USSR wants to present a first-
class sporting event in a well-groomed city. Neverthe-
less, the estimated $3 billion price tag for the
Olympics-by far the costliest to date-is sure to add
fuel to the fires of Western critics who argue that the
modern-day games are too expensive and unwieldy to
continue in their present form. (Concern over spiraling
Olympic costs has led Los Angeles organizers to
emphasize financial skills in searching for an executive
director.) In Moscow too, financial aspects are receiv-
ing increased attention from officials acutely aware of
the "financial disaster" label so widely pinned on the
$1.5 billion Montreal Games. Vladimir Alkhimov,
Chairman of the USSR State Bank, is one of several
high-ranking officials who have voiced concern that
the Olympics would be a net loss and divert too many
resources to Moscow.
Strenuous Construction Effort
In all, 99 officially designated Olympic construction
projects are under way to provide sports, hotel,
transportation, and other service facilities-76 in
Moscow (see figure 11, inside back cover) and the rest
in four other cities where events will occur: Tallinn,
Leningrad, Kiev, and Minsk. Based on progress to date
and the current pace of construction, we believe all
Olympic and related projects will be ready for opening
day ceremonies. (u)
Sports Facilities. Several entirely new sports com-
plexes are being constructed and many existing ones
are being renovated throughout Moscow. In addition
to the Olympic Village, the city has officially desig-
 Moscow Olympic Sites
Malaya Arena
Lenin Central Olympic
Stadium _ %Computer Center
Prospekt Mira
Leninskiye Gory
Swimming Complex.
Novoslobodskaya Covered Stadium?
Bittsevskiy Lesopark ~Chertanovskaya (u/c)
Indoor Stadiums Open Stadium\
Steeplechase
Course
lzmaylovy-Sokol'niki
Q Metro (subway) station
? Metro transfer station
Krylatskoye
Leningradski
Palace of,
Sports
Indoor Soccer,
Track and Field
Complex
International Airlines
rierminal and Hotel
Dinamo
Sports Complex
. Universal
Sports Hall
Dinamo
Central Army
Sports Club
Olympic Village
Lokomotiv Stadium0
Sokol'niki
Palace of Sports
Sokol'niki Spartak 'Stadium
Krasnosel'skaya
504315 12-79 Unclassified
Preobrazhenskaya PI.
O
Malaya Arena
Dinamo
Olympic
Post Offices
r Universal Sports Hall
0lzmaylovo Stadium
16RtiaL 8
 nated several Olympic sports centers: Luzhniki in the
southwest, Prospekt Mira in the north, Krylatskoye in
the west, Leningradskiy Prospekt in the northwest,
Bittsevskiy Lesopark in the northwest, and Izmaylovo-
Sokol'niki in the northeast. (u)
The 180-hectare Luzhniki complex, across the river
from Moscow State University, is the premier Olympic
site. The opening and closing ceremonies will be held in
the Lenin Central Stadium at Luzhniki. The stadium's
exterior has been bolstered with additional concrete
supports; and new seats, lights, press boxes, an
overhang covering part of the grandstands, and an
artificial playing surface have been installed for the
games. To the southeast is Druzhba Hall, a new
multipurpose gymnasium whose facade makes it ap-
pear like a giant crab. This hall was completed in 1979
and was first used to host volleyball competitions
during the recent Spartakiad. Other competition sites
in Luzhniki include the Malaya (Small) Arena, a
previously open-air facility which has been covered,
and the Palace of Sports and a swimming pool, both of
which have been renovated. (u)
On Prospekt Mira, just outside the Garden Ring Road
that encircles downtown Moscow, stands the largest
new sports complex-a covered stadium with grand-
stands for 35,000 spectators and an adjoining arena for
water sports. Construction of these facilities had
lagged far behind that at other sites, but an accelerat-
ing effort during the past year has brought substantial
progress. In May 1978, the stadium-slightly larger
than Washington's Capital Centre-was a skeleton of
steel girders, but one year later the structure was
externally complete. Much work still needs to be
completed inside and around this as well as the
adjacent swimming arena. During the games, the
stadium will be partitioned to hold boxing and
basketball competitions simultaneously. The main
swimming and diving events are scheduled for the
arena. Located near museums and theaters, this new
complex will be a focus for sports and cultural
activities after the Olympics. 14
Krylatskoye, in western Moscow, houses another new,
architecturally impressive structure, the Velodrome.
Built in an elliptical shape that mirrors the enclosed
track, it will host indoor cycling events. Nearby, the
13.5-kilometer, asphalt-surfaced cross-country bicycle
track and archery fields have been completed. The
world-renowned manmade rowing basin was con-
structed here in 1973, and extra seating has recently
been added to the grandstands at the end of the 2.3-
kilometer long course. (u)
 The Leningradskiy Prospekt Sports Complex com-
prises facilities of two sports clubs, Dinamo and
Central Army. Modernized facilities at Dinamo in-
clude a 56,000-seat stadium and the Malaya Arena.
Across the road, at the Central Army Sports Club, a
large structure enclosing two separate arenas was first
used for competitions during the Spartakiad. Nearby,
a multipurpose gymnasium is being constructed;
during the Olympics it will be the site of the women's
basketball contests. (u)
Equestrian competitions will be held at Bittsevskiy
Lesopark (Forest Park). All the facilities here-the
show ring, grandstands, stables, and the steeplechase
course-are being specially built for the Olympics. In
Izamaylovo, adjacent to the Central Institute of
Physical Culture, a universal sports hall is being built
and a soccer stadium has been reconstructed. Several
kilometers to the west, at Sokol'niki, the Palace of
Sports is being enlarged. (u)
Several other sites will be used for Summer Games
events. In Mytishchi, a northeast suburb, the Dinamo
shooting club has been renovated and in Khimki-
Khovrino a new universal sports hall is almost finished.
In addition to the construction and improvement of
sports facilities in Moscow, soccer stadiums have been
modernized in Leningrad, Kiev, and Minsk, and a
yachting center has been developed in Tallinn. All will
host Olympic competitions. (u)
Accommodations. More than 12,000 foreign athletes,
coaches, and trainers will be housed at the new
Olympic Village in the rapidly developing residential
area of southwest Moscow. Three groups of six
16-story apartment buildings are nearing completion,
together with nearby training facilities, restaurants,
stores, and cultural and medical centers. The Olympic
Village will be converted to a microrayon (a self-
contained community of apartments and service facili-
ties) that will house 15,000 people after the games.
Another smaller Olympic Village-for 600 people-is
being completed in Tallinn. Remarkable progress has
been made at the Moscow site, which in mid-1977 was
in the earliest stage of construction. The Olympic
Village was modeled after an existing Soviet
apartment-house series and the prefabricated units
being used here were already in production. This
decision, coupled with the top priority given to
Olympic projects in terms of manpower and materials,
greatly enhanced construction. Unlike most Soviet
construction, the quality of workmanship appears to be
quite high. (4
 lzmaylovo Complex
The Soviet record in building tourist facilities is not as
good. Receiving the anticipated 600,000 visitors (in-
cluding 200,000 from overseas) will strain Moscow's
resources to the limit. Aided by foreign construction
teams, Soviet construction organizations will add 10
hotels in Moscow and increase the city's total capacity
by nearly 25,000, to a total of 75,000 accommodations
(table 1). One of the largest hotel complexes in the
world is nearing completion at Izmaylovo in northeast
Moscow, where five 30-story units will house 10,000
visitors during the games. Large campgrounds, includ-
ing one for international youth groups, and several
motels are being built on the outskirts of Moscow. New
dormitories with space for 40,000 will be used to house
Soviet visitors. In addition, several floating hotels,
ordered from a Finnish shipbuilding firm, will be used
for Olympic tourists. (u)
The 75,000-bed hotel-capacity figure is well below
original plans of Soviet organizers who initially
envisioned a doubling of hotel space in Moscow to
accommodate 300,000 foreign visitors (100,000 at any
one time). Late construction starts, protracted negotia-
tions with Western firms over quality control, and the
need to use non-Soviet labor, however, led the Soviets
to scale back plans for 20 or more new hotels in the
capital with 45,000 to 50,000 beds to 10 hotels with
25,000 bedse'j
Among the new hotels being built, only the Kosmos
will be luxury class. Overall, only about two-thirds of
the 75,000 total beds available in Moscow will measure
up to Western quality standards and that number will
be reduced further by the need to reserve rooms for
IOC officials, newsmen, and Soviet VIP guests. Many
Soviet hotel rooms lack the amenities taken for granted
by Westerners such as room service and private baths.
Accordingly about 30,000 Western foreign tourists
will be the maximum the city's hotels can handle at
any one time. Visitors from Eastern Europe and Third
World countries will be put up in the poorer quality
hotels and will have to rely on other accommodations,
especially university dormitories, student hostels, and
camping facilities. ,(lei
As plans have changed, the Soviets have pared the
number of foreign spectators that the USSR will allow
into Moscow during the games. From an original
estimate of 300,000, the number expected has steadily
dropped. In 1978 the Soviets were anticipating
240,000 visitors. More recently a Western source put
the figure even lower, at only 160,000 visitors.2
11 - l,_
 Now that early plans to set up US-style fast food
restaurants have been rejected, the Soviets plan to
erect temporary dining halls near tourist accommoda-
tions, athletic facilities, and parks and to install
automated vending machines at the main Olympic
stadium and the primary tourist airport at
Sheremet'yevo. New restaurants and cafes also are
being built and existing ones renovated and expanded.
(u)
Izmaylovo 10,000 In northeast Moscow near
Izmaylovo Park; five 30-story
units.
Communications. Several new communications centers
are being constructed for the Olympics. The seven-
story Olympic Press Center on Zubovskiy Bul'var near
Sevastopol' 3,600 In southern Moscow near the city's center, will provide facilities for 3,500
Bittsevskiy Lesopark; four 16- journalists. After the games, the center will house the
story buildings. Built by
Yugoslavs. Novosti Press Agency and the Soviet Journalists'
Kosmos 3,500 In northern Moscow; 25 stories; Union. The Ostankino television complex is being
built by a French firm; will enlarged with the addition of a broadcast building for
house television personnel the Olympic Television and Radio Center. In
during the games.
h
ical
h
ll
t
t
i
l
h
n
, a
ec
spor
s
a
versa
e un
Luzhniki, near t
control center will house computers and serve as the
Vesna 1,600 In northern Moscow; 22 stories; official broadcast information center. An international
designated an international long-distance telephone switching center and two new
youth hotel. post offices are also being built in other areas of
Moscow. All these facilities are either completed or
International Airlines 900 In northwest Moscow; nine
Complex stories; includes offices for
international airlines.
700 In southwest Moscow; 22
stories; will house Olympic
judges.
Soyuz 400 In northwest Moscow; 12
stories; built by Yugoslavs.
Bittssevskiy Lesopark 150 In southern Moscow.
Pribaltiiskaya 2,500 On Vassilievsky Island; built by
Swedes.
NA 226 On Krestovskiy Island; two
seven-story buildings.
Pulkovaskaya 500 Built by Finnish consortium.
Rus 900 Near Central Stadium on
Cherepanov Hill.
850 On Kingiseppa Street; 26
stories; built by Finns.
nearly so.
Transportation. Transportation will be critical during
the Olympics, as competition sites are scattered
throughout most of Moscow. The main transportation
link will be the well-developed and expanding Moscow
subway. Three major Olympic sports areas-
Luzhniki, Prospekt Mira, and.Leningradskiy
Prospekt-are next to subway stations, and other sites
are short distances from the nearest stops. Interna-
tional airline arrivals and departures will use Moscow's
new Sheremet'yevo-II Terminal, still under construc-
tion. Two other Moscow airports, Domodedovo and
Vnukovo, and one at Tallinn are being expanded.
Roads are being improved, and bridges, bypasses,
filling stations, and rest areas built: Officially desig-
nated Olympic highway routes are being widened and
improved within Moscow, and new avenues are being
built to tie the Olympic Village and Prospekt Mira
complexes to existing streets. A computer-controlled
traffic system is being installed and fringe parking lots
are planned for the outer Ring Road to relieve
 expected downtown congestion. The city is also being
given a face lift with tree plantings and new parks and
gardens. (u)
Labor Mobilized for the Olympics
To complete the Olympic building program described
above, the USSR has had to assemble considerable
construction resources. Olympic Committee Deputy
Chairman Koval has indicated that Olympics con-
struction amounts to over 30 percent of construction in
Moscow. The desire to finish the sports complexes,
tourist accommodations, and other civic improvements
in time for the games has led to a reallocation of
resources away from non-Olympic endeavors, espe-
cially in the construction sector. Nonetheless, we have
no evidence that non-Olympic priority construction has
been slowed by the current Olympic push; for the most
part lower ranking projects have been affected. Skilled
workers such as masons and electricians are being
transferred or lured to Moscow to expedite lagging
Olympic construction, a process which has probably
exacerbated problems in already labor-short areas
such as the Far East and Siberia
Despite the diversion of workers to Moscow the
manpower shortage in the building trades reportedly
continues. In late 1978 a representative of a West
German construction firm was told by a Moscow
deputy mayor that the local construction industry was
short 20,000 workers, or about 10 percent of Moscow's
total construction labor force. The strains associated
with labor shortages are being alleviated in part by the
allocation of 23,000 Komsomol volunteer youths and
army troops to Olympic site construction. Moreover,
some priority projects have simply been turned over to
foreign construction firms:
? A Finnish company, Perusyhtyma, signed an $8
million contract to complete a hotel for Olympic
tourists in Tallinn whose frame was put up by Soviet
builders. Two-hundred fifty Finnish workers are to
have the hotel ready by the end of May 1980.
? The contract for the Kosmos Hotel was a turnkey
deal with the French providing all labor, supplies,
and architectural and engineering services. Finnish
firms have been awarded similar deals.
? West German contractors were given the go-ahead
to build a new passenger terminal at Sheremet'yevo
Airport.
? Yugoslav labor is being used to build two Moscow
hotelsy(er
Some non-Olympic projects have been curtailed in the
Moscow area as labor has been reallocated. Residen-
tial building has slowed, and moratoriums have been
placed on other planned construction, including medi-
cal facilities, telephone systems, and most administra-
tive buildings. A Western visitor to Moscow has noted
an apparent halt on building new medical facilities and
additions to existing hospitals and institutes.' Gosplan
officials reportedly complain that the shift toward
Olympic priorities is disrupting planning and wasting
labor and productive capacity.'
Aside from the construction activity, the Soviets are
training workers to cater to foreign tourists. Vitaliy
Smirnov, a Deputy Chairman of the Moscow Organiz-
ing Committee recently indicated that 150,000 addi-
tional people would be required to handle the crowds
expected in Moscow's They reportedly plan to train'
7,000 new cooks in Western tastes. The success of the
ambitious feeding plan depends on the ability of the
Catering Department of the Light Machinery and'
Food Industry, which will supply food for Olympic:,
tourists, to meet Olympic-related demands while
operating under the constraint that all food for the
games must be of Soviet and East European origin.
The Soviets reportedly have alread be un to stockpile
some foodstuffs for the games.
In an equally ambitious undertaking, 4,500 Moscow
taxi drivers and many restaurant headwaiters are
being trained in basic English, German, French, and
Spanish. Sefri, the French builder of the Kosmos
Hotel, is sponsoring a one-year training program in
French hotels for its future Russian chefs, waiters,
maids, and porters. Intourist is doubling the number of
guides and translators available to foreign visitors,
drawing on university students currently receiving
 foreign language training. The Sovietsstimate 25,000
translators will be required/
Adding Up the Costs
Soviet officials have shied away from discussing the
cost of Olympic preparations. Because they plan to use
existing facilities extensively, the Soviets originally
estimated costs for the sports complexes alone at about
200 million rubles (about $420 million converting at
1976 construction purchasing-power-parity ratios).'
This value, however, does not include the substantial
investments required for the Olympic Village, tourist
facilities, and other supporting structures such as the
main press center and the new post office. Adding in
the costs for this construction would raise the total
Olympic bill considerably-1ki
Western press reports have speculated that the real
cost of the Olympics could go as high as $6 billion, a
figure which appears excessive in view of Soviet
attempts to keep a fairly tight rein on costs. The USSR
leadership has scaled back plans for new hotel con-
struction, and Soviet purchasing agents negotiating
with Western firms have repeatedly CO~~plained of
tight budgets and limited funds. (~-
Given the heavy Soviet reliance on existing renovated
sports facilities and known new construction, we
believe a more realistic cost estimate for the Olympic
effort is the 1.5-billion-ruble figure for Moscow cited
by Vladimir Promyslov, Chairman of the Moscow City
Executive Committee (about $3 billion converting at
ruble/dollar construction rates). Adding the cost of
hosting activities outside Moscow at the other Olympic
sites would add but a few hundred million dollars to
this figure,FeT
According to numerous Soviet officials, Olympic
organizers are trying to minimize the role played by
foreign firms in game preparations. No doubt this
reflects security concerns and a desire to keep the
games a Soviet affair as well as the need to balance
Olympic needs against other economic requirements in
6 For a detailed discussion of the methodology for converting and
deriving 1970 ruble/dollar ratios, see ER-76-10068, Ruble Dollar
Ratios for Construction, February 1976, Unclassified. These ratios
have been updated to 1976 rubles and dollars and appear in The
Joint Economic Committee Compendium, Vol. I, "US and USSR:
Comparison of GNP," 10 October 1979, Unclassified. (u)
allocating scarce foreign exchange. At first the Soviets
targeted Eastern Europe as the source for 20 percent of
the equipment and services with only 5 percent to be
supplied by Western firms. The rest was to be provided
by more than 600 Soviet enterprises reportedly provid-
ing support to the Olympics. (u)
Moscow has, in fact, placed substantial Olympic
orders in Eastern Europe and other soft currency
countries-principally in Hungary, Yugoslavia, and
Finland. In Hungary alone Soviet orders have
approached $100 million. Hungary, among the most
advanced of the East European countries in producing
electronic technology, doubtless has benefited from its
role as a supplier to past Olympic events, especially to
the Montreal Games. The deals with Budapest for
which we have information focus on electronic equip-
ment ranging from tape recorders, amplifiers, lighting
fixtures, and control monitors for new broadcast
facilities to information boards for posting event
results. (u)
Yugoslavia and Finnish firms have been most heavily
involved in Olympic construction projects. Yugoslavia
was awarded the contract for the Sevastopol' Hotel
and the smaller Soyuz Hotel while Yugoslav labor was
subcontracted for the French-built Kosmos Hotel.
Because of its location, Finland enjoys a natural
advantage over other foreign firms competing for work
in Tallinn. Aside from construction the Finns are
providing radio telephones for security and medical
communications and fire protection equipment for the
computer centers set up for the games. Information on
contracts with the remaining East European countries
is scant. A Polish firm is providing electronic broilers
for restaurant catering services; a number of small
deals have been noted with some Romanian firms.
Reports of East German contracts have been conspicu-
ously absent. (u)
While there will be no golden arches in Moscow,
foreign suppliers are making a substantial input into
the games, and more than Moscow planned. To date,
Soviet planners have placed orders with Western firms
for an estimated $500 million worth of equipment and
services. The figure would be higher but for the
successful Soviet solicitation of free equipment and
15 GetrfidewMl
 services in exchange for "official supplier" status. Our
$500 million figure is based on known orders valued at
about $450 million, including financing (table 2). We
believe the tally includes all major Olympic projects in
which Western firms are involved; we have added 10
percent to account for smaller contracts which were
probably signed but for which we have no information.
The largest contracts involved various computer sys-
tems, color TV equipment, communications equip-
ment, and construction of a number of hotels and
tourist facilities
More than half of the $500 million in orders for goods
and services from Western suppliers have been placed
in France and West Germany and less than $5 million,
or 1 percent, in the United States (see appendix A for a
listing of contracts with Western suppliers).' French
businessmen, supported with official low-cost credits,
have been the most successful in winning Olympic
orders. In addition to the $120 million deal for the
3,500-bed Kosmos Hotel, French firms have been
supplying $40 million worth of color TV cameras and
mobile communication equipment and nearly $30
million worth of computers. German sales revolve
around the $94 million contract for the new
Sheremet'yevo Airport passenger terminal. A wide
array of smaller deals ranging from outfitting the
Olympic Village discotheque and hairdressing salons
to TV support and the sale of goods and services by
Daimler-Benz is also being supplied. Japan is the third
leading Western supplier, providing more than $20
million worth of broadcast and electronic equipment.
Only a handful of contracts-for lab testing equip-
ment, artificial track surface materials, and a reserva-
tion service minicomputer for the Kosmos Hotel-
were signed with US firms. A combination of factors
accounts for this weak showing: (1) lack of competitive
financing, (2) aggressive competition from West Euro-
pean and Japanese suppliers who have comparable
technology, (3) Soviet reaction to delays in approving
export licensing for the TASS computer deal (finally
The US number only includes direct purchases. Excluded from the
tally are lease/rental deals and equipment being taken to the USSR
by US firms which are to be removed after the games end, the totals
of which may be substantial. A review of US license applications, for
example, shows more than $20 million worth of video recorders alone
have been ordered for the Olympics: we do not know how many of
these have actually been sold
USSR: Selected Olympic Contracts
With Western Suppliers
Country and Firm Million US $ Purpose
West Germany
Saltzgitter, Hermann 84.8
Reutter
Thyssen 6.6
Siemag Rosenkaimer 2.8
Maschinenfabrik 5.9
Herbert Kannegiesser
120.0
40.6
IBM Trade Develop- 10.9
ment
United Kingdom
ICL Computers 2.0
Rank Xerox 2.5
EMI Sound & Vision 0.9
Equipment
Minnesota Mining & 2.2
Manufacturing
Siemans A. G. 4.0
Osterrich
Sheremet'yevo
Airport Terminal
TV cameras/
communications units.
Stadium light production
line.
Minicomputers for TV
relay facilities.
Elevators for Tallinn TV
towers.
Olympic results system.
Copiers; duplicating
equipment.
Television monitoring
control equipment.
Digital paging system.
Carpet-making
machinery.
Lab drug testing
equipment.
Computer system for
Kosmos Hotel.
TV console equipment.
 turned down), and (4) Soviet decisions to scale back
the scope of foreign purchases (Soviet planners, for
example, scrapped plans to sign up Western fast-food
restaurant service firms because of mounting foreign
costs and because they viewed such investments as of
marginal value).
The US presence will not be missing in Moscow,
however. Numerous American as well as other West-
ern firms have purchased "official supplier" status to
the 1980 Olympics either for the title's advertising
value or to help the firm break into the Soviet market.
Agreements between the Organizing Committee and
Western suppliers specify the donation of cash, prod-
ucts, or both; the values involved depend on the goods'
importance to the Soviets and/or the level of competi-
tion for exclusive supply rights. Most cash donations
have been in the $100,000 to $250,000 range, but
Coca-Cola paid $6 million in cash and is providing $4
million in beverage concentrate and a new bottling
plant for the exclusive right to supply soft drinks at the
Olympics (a position the company has held since
1928). Similarly, Levi Strauss is donating 23,000 sets
of blue jeans and jackets for officials and workers
attached to the games.
SSA
Firms dealing in expensive, high-technology products,
to whom publicity is of little value, have shown little
interest in becoming official Olympic suppliers. The
Soviets have had to purchase computers and telecom-
munications equipment. The exceptions are those
situations where supplier agreements are part of a
larger agreement combining the sale of a Western
company's product along with a donation-in-kind-for
example, the sale of photographic supplies by Kodak-
Pathe (France) and sports uniforms by Adidas (FRG).
(u)
Moscow has been experiencing some problems with
Western supplied equipment. Both a computerized air
traffic control (ATC) system for the Moscow region
and a message-switching computer for the Soviet news
agency TASS may not be ready for next summer's
Olympic Games. The Soviets preferred and initially
planned to purchase US equipment for these projects.
Cost and embargo difficulties forced them to turn to
West European firms, a decision largely responsible
for delays,e'j
Financing the Games
The Soviet Union stands to gain substantially from
hosting the 1980 Summer Games, most obviously
simply by staging a successful Olympics. Much will
depend on how the USSR handles the games. If it is
unable to cope with the foreign tourists, Soviet society
could come off badly. Moscow clearly is aware of this
possibility and counts on avoiding it through an all-out
construction program and crash training courses
geared to catering to Western tastes and needs. The
other major potential pitfall will be the degree of
interaction of Soviet and Western citizens. How closely
the Soviets can control this interaction remains a
question mark.
From a cost standpoint the net economic outlay is
small. Revenue programs such as the national lottery
should help to recover the 200-million-ruble direct cost
of Olympic sports facilities. Based on an accounting
model of known and estimated hard currency cash
flows and fairly conservative assumptions regarding
residual tourism earnings after the games, the Olympic
effort should be a net revenue generating project for
the USSR. Our calculations indicate Moscow could
break even-on a discounted cash flow basis-on its
foreign costs as soon as 1980. Revenues are being
maximized largely through insistence on prepayments
of rights, fees, and accommodations by tourists while
expenditures are being held down through the use of
low-cost Western credits
The indirect costs of hosting the games, however, may
be considerably greater. For the most part the indirect
costs are intangible and cannot be measured. As
already noted, emphasis on the Olympics has been at
the expense of other programs, especially allocating
construction resources and mobilizing and training
labor. (u)
Sources of Revenue. The Soviets stand to earn consid-
erable income, in both hard and soft currencies, from
the Olympics. In line with its goal to make the games
as self-supporting as possible, the Olympiad-80 Orga-
nizing Committee is raising revenue under a set of
 programs very much as was done in Montreal and
Munich. Like the Olympic expenses, most revenue will
be in rubles or other East European currencies. The
largest earner of soft currencies has been a series of
lotteries-"Sprint" in the Soviet Union and
"Sportloto" in Hungary, Czechoslovakia, and Bul-
garia. By the end of 1978 these lotteries had already
raised close to 200 million rubles, an amount exceeding
the Soviet estimate of domestic outlays for Olympic-
related sports facilities. Roughly 20 percent of the 5.8
million event tickets for the games are being offered to
East European visitors; this sale should bring in about
10 million rubles. Soviet organizers are forgoing
substantial additional revenue by subsidizing the 4.1
million tickets set aside for Soviet spectators. These
tickets will be distributed through trade unions,
enterprises, and collective farms at a 70-percent
discount from regular prices, which the Soviets claim
are geared to Western incomes and thus beyond the
means of ordinary Soviet citizens.
-But in terms of the number and extent of promotions,
the bulk of the Olympic revenue effort has been
directed toward hard currency countries and their
tourists. At present, the Soviets should recover roughly
half of their hard currency outlays of $500 million with
Western revenues (table 3).'
The Soviets will collect more than $100 million from
broadcast rights in the West alone. The most publi-
cized of these deals is the 1977 contract between
Gosteleradio and the National Broadcasting Com-
pany, which has exclusive US broadcast rights for the
games. The $87 million agreement provides the Soviets
with $52 million for the construction and equipping of
the television and radio center at Ostankino plus a $22
million payment for broadcast rights (another $13
million rights fee was paid directly by NBC to the
IOC). These payments are being made in four yearly
installments, the last in 1980, and cover all of NBC's
financial commitment. None of NBC's television
equipment is to be left behind. The Organizing
Committee is sealing smaller deals with TV networks
elsewhere, such as Eurovision in Europe ($20 million),
Japan ($9 million), and secondary markets in Asia,
Africa, and Australia. Le f
USSR: Anticipated Olympic
Hard Currency Earnings
103
74
Foreign spectators will account for another large block
of hard currency earnings-perhaps $65-70 million..
Most of the 80,000 non-Communist tourists expected,
including all US visitors, are being required to buy an
all-inclusive package deal that includes accommoda-
tions, meals, and tours. The 15-day US package will
cost $525 excluding air fare. We assume other
Western tourists, mostly Europeans, will accept a less
extensive package of about $350. These revenues, due
in full to Intourist by the end of 1979, will total more
than $30 million. Tourists will undoubtedly make
miscellaneous purchases during their stay (souvenirs,
extra meals, and the like). We assume sundry pur-
chases will average $150 per person per trip for
Americans and $100 for other Westerners, for a total
of close to $10 million. Our estimate of average sundry
purchases may be overly conservative. Even with
substantially higher average daily outlays, however,
the totals would not change appreciably-raising the
average tourist miscellaneous expenditures to $25 a
day would add no more than $30 million or so to overall
receipts. f
 The USSR also requires that at least one-half of the
US tourists fly Aeroflot to and from the USSR. If one-
third of other Western tourists also fly on the Soviets'
"Official Olympic Carrier," at prevailing market fares
the Soviets would take in just under $30 million in hard
currency. Aeroflot originally planned to have a large
number of the IL-86s-the Soviet version of the
Airbus with a capacity of 350-available for interna-
tional routes. Although the current model of the IL-86
is not capable of long-range Trans-Atlantic service,
new versions of the IL-62 are available in sufficient
quantities to handle the anticipated passenger load.
As main agents for foreign visitors, Intourist and the
Central Council for Tourism will distribute the 1.7
million event tickets allocated to all foreigners. The
Soviets expect about 600,000 of these tickets, priced on
average at $12, will be bought by tourists from hard
currency countries, bringing the Soviets $7 million.
The Organizing Committee is also overseeing the sale
of silver, gold, and platinum Olympic commemorative
coins. In late 1978, the Soviets reached agreement with
several Western customers including Occidental Pe-
troleum Company and Lazard Freres et Cie. of France
for the sale-on a fixed price basis-of $200 million in
ruble denominated coins. Sales have been less than
anticipated, however, and probably will not exceed
$50 million, the amount sold under the Montreal coin
program. In September 1979, moreover, the USSR
indicated that it had unilaterally canceled its ship-
ments of coins to the West because of the rapid runup
in Western metals prices. In all, the Committee may.
make about $5 million on the sales of medals, special
sets of stamps for collectors and some 2,800 miscella-
neous souvenirs. (c7
Foreign firms-primarily Western-have contributed
cash, sports equipment, and other goods to the
Olympics as noted earlier. We believe gross cash
receipts from these contributions may total $15
million. Ingosstrakh, the Soviet insurance enterprise,
will insure foreign contestants, officials, and journal-
ists during their stay in the Soviet Union; coverage will
apply to cars, TV gear, and sports equipment as well as
personal items. Total premiums, however, probably
will be small, at best a few million dollars.
The Soviet Union cannot expect to earn much hard
currency from Third World and East European
tourists since most will settle their bills in soft
currencies. Among East Europeans, only Yugoslav
citizens may be required to pay in hard currency.8)
Balancing Costs and Revenues. The Soviets have been
able to keep hard currency outlays to a minimum
through extensive use of low-cost credits and requiring
that revenues be prepaid, effectively shifting most of
the Olympic payments burden beyond 1980, when
increased tourist revenue will be available to offset
loan payment schedules. On the revenue side virtually
all receipts related to the Olympics should be in hand
by the time the games begin. The last $5 million
payment for US broadcast rights is due in April, while
package tour fees for accommodations are due by the
end of 1979. p
8 Most of those who will be required to pay in hard currencies can be
expected to bring in far less revenue than Western travelers because
of (1) greater use of nonair transportation, such as train, bus, or car,
to the Soviet Olympic cities, (2) the use of less expensive
accommodations such as camping grounds and student hostels
rather than hotels, and (3) the purchase, on average, of less
expensive event tickets. (u)
 USSR:
Estimated Net Hard Currency
Olympic Flows
Million
us $
WITHOUT WESTERN
CREDITS
-901 I I I I I I I I I
1976 78 80 82 84
Our calculations show that next year Moscow will
essentially break even on a cash flow basis and,
between 1981 and 1985, will show a net profit. We
believe our assumptions are generally conservative
with respect to post-Olympic tourism earnings. Not
unless post-Olympic tourist utilization drops below 25
percent will Moscow experience a net hard currency
cash drawdown. We also ran through an alternative
calculation to measure the saving from utlilizing
Western credits. Without use of Western credits, the
Soviets would have had additional outlays of nearly
$70 million in. 1977 alone and probably would not
break into the black until after 1985.'
 Appendix A
USSR: Western Suppliers
for the Olympics
..a...~
C. Voight Sofhub
NA
Contracts
_
Sefri
120.0
Prime contractor for
Ortmann Gmbh,
NA
Kosmos Hotel.
Kuppersbusch
Thompson CSF
40.6
TV cameras/communi-
ations units.
Sodetag TAI
18.6
TASS computer system.
Dinakord
NA
IBM Trade Develop-
10.9
Computer.
Daimler-Benz
NA
Standard Elekrik,
Loven A.G.
NA
Official suppliers
Daimler-Benz
NA
Sarniege
Gym mats.
Bat-Taraflex
Synthetic flooring.
Official suppliers
Kodak-Pathe
-
Color film photographic
Adidas
equipment
J
F
Ad
lff A
G
Promat
Printing equipment.
.
.
o
.
.
West Germany
Ernst Spieth
Gail A.G.
Satzgitter A. G.,
84.8
Prime contractors for
Intorg
Hermann Ruetter
Sheremet'yevo Airport
Gmbh
passenger terminal.
IPS
Thyssen
6.6
Passenger camps for
Zanders Feinpapiere
Sheremet'yevo Airport.
Gmbh
Siemag Rosen
2.8
Luggage handling sys-
Streiff Consulting
Raimer
tems for Sheremet'yevo
Gmbh
Airport.
Rolf H. Dittmeyer
Bosch Ferneh
NA
Segmented helial scan
videorecorder.
Gmbh, Atlas Verlag
M
hi
f
b
ik
5
9
L
d
i
asc
nen
a
r
.
aun
ry equ
pment.
Herbert
Kannegiesser
Rekortan playing sur-
face for training
stadiums.
Kitchen equipment for
the Olympic village.
Hairdressing salons for
the Olympic Village.
Equipment for Olympic
Village discotheque.
Twelve service stations
on auto routes to
Moscow.
Sale of luxury buses,
police cars, and
ambulances.
Artificial trim for
hockey fields.
Rifle targets and
shooting equipment.
Ceramic tiles.
Duplicating equipment.
Office equipment.
Paper products.
Building equipment for
lights.
Fruit juices.
Right to use Olympic
logos on products
marketed in Western
Europe.
 USSR: Western Suppliers
for the Olympics
(continued)
Official suppliers
Tackikara Co. Ltd.
Myojo Rubber Man-
ufacture Co. Ltd.
Asics Corp.
R. K. Mizuno Sport-
ing Goods Ltd.
Nippon Kogaku KK
Minnesota Mining & 2.2
Manufacturing
Production line for high-
intensity bulbs for sta-
dium lights.
Minicomputers, televi-
sion relay facilities.
Elevators for Tallinn TV
towers.
Basketballs. Ampro Corp.
Volleyballs and water Levi Strauss
polo balls.
Volleyballs nets.
Uniforms.
Right to "Moscow 1980
Olympic" logos.
Baggage inspection
equipment for
Sheremet'yevo Airport.
Contract Value Comments
(Million US $)
$6 million for rights to
distribute soft drink,
$2.5 million for a bot-
tling plant (to be con-
structed by the Seitz
company, a West Ger-
man firm), and $1.5 mil-
lion for concentrate.
Landing pits.
Jeans and windbreakers
for Soviet personnel and
officials.
Videotape recorders.
Postal Equipment.
Chewing gum.
Merchandising rights to
Olympic insignia and
mascot.
System for Olympics
results service.
Copiers and duplicating
equipment.
Automatic television
quality monitoring
equipment.
Carpet-making
machinery.
 Appendix A
USSR: Western Suppliers
for the Olympics
(continued)
(Million US $) (Million US $)
Bridgeport-Bundry Sports nets. Siemans A.G. 4.0 Intercom system.
Ltd. Osterrich
Roundtree Confectionary product.
Mockintash
Official suppliers
Monds Rubber SpA
Teodoro Carnselli
SpA
Techno Kitchen, catering, and
bar equipment.
Olivetti SpA Typewriters and
accessories.
Perfection NA Film shooting and sound
tracking equipment.
Kornelius Gmbh Soda fountains, cup
vending machines.
Official suppliers
Perfectone
Swiss Timing Ltd.
Official suppliers
Cooper Group,
Lufkin Division
Schelde Interna- Volleyball and basket-
tional ball equipment.
 Appendix B
Basic Assumptions in Estimating
Olympic Hard Currency Flows
Broadcast rights totaling $103 million:
? US contract calls for $74 million in payments ($18
million in 1977, $24 million in 1978, $20 million in
1979, and $12 million in 1980).
? The Japanese deal calls for four equal payments
totaling $9 million over 1977-80.
? Eurovision negotiated a $20 million contract in 1978,
presumably with payments due in 1979 and 1980.
? The value of contracts in other smaller markets has
not been reported. Moscow reportedly has already
signed a deal with Australia and is currently
negotiating LDC markets rights. (u)
There will be a net addition, countrywide, of 15,000
new hotel beds suitable for Western (hard currency)
tourists. A 90-day tourist season at 50-percent occu-
pancy will mean, on average, an extra 680,000 tourist
days each year. (An average Western tourist spends
$100 a day on air fare, accommodations, meals, and
the like, the prevailing Intourist rate.)]
The Soviets will earn an estimated $50 million overseas
from the sale of Olympic commemorative coins; half of
this income will be in 1979, half in 1980'
The Soviets will make $15 million from official
suppliers and sponsors fees which on an individual
basis range from $100,000 to $250,000. (The value of
in-kind donations made by official suppliers is only
referenced if explicitly mentioned in source material.)
X
The Soviets will earn $5 million from the sale of
miscellaneous Olympic souvenirs-licensing and roy-
alty fees-split equally between 1979 and 1980
Westerners.
All deals under $10 million are assumed to have been
paid for in cash within six months of contract signing.
Deals of more than $10 million are assumed to be on
credit, the loan amortized over eight years at 7.25-
percent interest. A 15-percent downpayment is in-
cluded, with payments split 5 percent at signing and 10
percent at delivery.
Outlays and receipts were discounted to 1976 prices at
8 percent to adjust for inflation and the time value of
money. The rate approximates to the cost of capital in
the West. (u)
 ,Soyuz Hotel
Khimki-Khovrinoy
oye Universal Sports .1
s.) ~~ ? Hall
Olympic
Post Office
Vnukovo
Airport 5 Km.
Olympic
Villages
ingradskiy
tospekt
\ Hotel W"Long
e
Salyut Hotel*," Distanc
N / Telephone
5 Kilometers
Moscow Olympic Facilities
id and CHy <
Kosmos
Hotel
Mytishchi
Shooting Club*,-"