Next month, the Winter Olympics in Sochi will bring many of Russia’s systemic problems in focus. It won’t be a pretty picture. The terrorist threat, rampant corruption, a problematic human-rights record, and rising xenophobia and nationalism will all be on display.

How the Russian leadership deals with these ills during the Olympics will define the nation’s international image for years to come. It is a reputational challenge of the highest magnitude for President Vladimir Putin, and he knows that.

Perhaps the most pressing problem to be dealt with during the Olympic Games is the threat of Islamist terrorism. Just last month, suicide bombers attacked Volgograd, only a one-hour flight from Sochi, killing thirty-seven people.

Sochi is located on the Black Sea coast of North Caucasus, a region riddled with Islamist insurgents. Nearby Dagestan is, in fact, the epicenter for Salafi-jihadi insurgents. One of the main terrorist organizations in Dagestan is the Caucasus Emirate. Its (rumored dead) leader, Doku Umarov, is widely believed to be behind the Volgograd attacks. He has vowed to disrupt the Olympics and urged his followers to strike during the Games. Attack prevention, even at a price of unprecedented clampdown, is job one for Russian police and security services.

Corruption has been a stone around Russia’s neck for centuries. Russia’s astronomic corruption level puts it in the category of the world’s most economically repressed countries, according to the Heritage Foundation’s 2014 Index of Economic Freedom. Corruption is ubiquitous throughout all government agencies, including the national-security forces and police. This, unfortunately, undermines its antiterrorist activities.

A Swiss member of the International Olympic Committee has estimated that about a third of the $55 billion allocated for the Winter Games has been stolen by Russian officials.

When not taking bribes, Russian authorities regularly crack down on protesters and human-rights activists. The government’s tactics include harassment and intimidation, which have intensified in advance of the Winter Games.

Last year Putin signed an antigay law that targets “public expression of support for nontraditional relationships.” This not only violates international law (to which Russia publicly subscribes), it has created diplomatic friction between Russia and the West. President Obama appointed three openly gay former athletes to the U.S. delegation participating in the Olympics’ opening ceremony—a deliberate snub to Mr. Putin.

Moscow has also been clamping down on the media. This week Russia denied a visa to David Satter, an American author who has been critical of President Putin in the past. Moreover, the Kremlin controls most of the Russian media, which is owned either by the state or by progovernment companies like Gazprom.

Troubled Diversity

The North Caucasus Muslim population is growing, and their customs and behavior often intimidate ethnic Russians. At the same time, Russian nationalists have alienated the areas Muslims, leading some to join radical Islamist groups. Over the last fifteen years, military actions between Russian law enforcement and Islamic militants have killed some seven thousand people in Dagestan alone.

Xenophobia is rampant throughout Russia. Anger toward the growing ranks of dark-skinned Muslims, most of who come to Russia in search of work, is on the rise. Young people in Russia have joined extremist nationalist organizations seeking “ethnic cleansing of the motherland.” Polls suggest that nearly 70 percent of Russians have negative feelings toward people of another ethnicity.

Anti-Americanism is on the rise as well. The Kremlin’s anti-Western rhetoric has helped create an image of an America that wants to diminish Russian power in the world. The government-controlled media wants to foster the United States-as-enemy perception to consolidate domestic support for the government and distract from corruption and the democracy deficit.

Clearly, Sochi is an inflection point for Russia. It gives the Russian leadership a chance to see the problems in high relief and develop a strategy to address the society’s ills. PR alone will not suffice. But an opportunity may arise from this complex challenge, an opportunity which will benefit Russia and her international partners.

The Kremlin should start with getting serious about fighting corruption, rebuilding the rule of law, promoting democracy, clamping down on extremism and creating a better business environment.

The release of Mikhail Khodorkovsky, the Pussy Riot punk rock band and the Greenpeace activists from jail was a good start. Much more work lies ahead to make Russia a place people would want to visit—and invest.

Ariel Cohen is the Heritage Foundation’s senior research fellow in Russian and Eurasian studies.

Image: Flickr/s.yume. CC BY 2.0.