Thousands of men and boys stream towards a bright light emanating from between the dilapidated buildings of central Makhachkala, the capital of impoverished Dagestan. Countless police line the pavements, shouting warnings to stay off the road. Some have dogs. All have guns.

In a republic used to rebel attacks that come almost daily, one could be forgiven for thinking yet another shop had been blown up or a police officer shot dead. But on this night the heavy security has been rolled out for another reason: football.

Since local boy turned billionaire Suleiman Kerimov bought the republic's main club, FC Anzhi Makhachkala, in January, football has been raised to mythical status in Dagestan, presented as a cure-all for the republic's many ills. They are indeed many: sky-high unemployment, runaway corruption, and a growing Islamist insurgency that has made Dagestan the centre of Russia's rebel violence.

"Football can change the entire appearance of Dagestan," says German Chistyakov, the club's general director. "It changes people's views and shows them that life will change further."

Kerimov, a Kremlin-friendly oligarch whose estimated £4.9bn fortune makes him the 118th richest man in the world, according to Forbes, has bet a lot of money on that.

Kerimov has not commented on his relationship with the Kremlin, but the Russian leadership is known to "ask" the country's wealthiest men to commit to developing the country's worst-off regions. And Kerimov is keen to show off his involvement, organising several trips for foreign journalists, including the Guardian, to fly to Dagestan and witness it for themselves.

Since buying the club, he has snapped up Cameroonian striker Samuel Eto'o and Brazilian legend Roberto Carlos. The former is now the highest-paid footballer in the world, taking in a rumoured €22m (£19m) a season. Posters of the latter line nearly every street in Makhachkala, either promoting Anzhi or sponsor MegaFon, a mobile phone provider.

The acquisition rumours keep on coming. Barcelona's Lionel Messi, Chelsea's Ashley Cole and Newcastle's Yohan Cabaye have all been discussed, and Kerimov is rumoured to have offered José Mourinho £1.83m a month to take over as manager after firing Gadzhi Gadzhiyev in September.

To which the obvious question is: would they know where they are going?

"I'm very happy to be here," Eto'o said after a recent match against CSKA Moscow, which they lost 5-3. "I want to grow with this team."

Despite these warm sentiments, the situation in Dagestan is so volatile that none of the players live there. Instead they live the high life in Moscow, and their training facilities are in a base just outside the capital. They fly to Makhachkala the day before a match, train and play and take a bus to the airport immediately afterward and board a private jet that takes them straight back to Moscow.

"It has no relation to security," says Chistyakov. "We need to provide good conditions and services and those don't exist here yet. If it were about security, we wouldn't play here. Something could happen at any moment."

And it often does. Several blocks from the stadium stands a blown-out storefront, fitted with exposed lightbulbs as workers try to rebuild after an attack in late September.

The co-ordinated assault saw three car bombs explode, killing at least six people and injuring 50 more, mainly police. It was the largest attack in the republic in months, where sustained sniper violence is more common. Rebels largely confine their attacks to police, though passers-by are almost always also casualties.

The government, and the Anzhi leadership, think a top-notch football club will change that.

"For Dagestan, football isn't just football – it's an entire social phenomenon," says Rasul Khabullayev, spokesman for Dagestan's president, Magomedsalam Magomedov.

Kerimov is throwing untold sums at the club, renovating its stadium and spending at least £15.6m to build football centres with pitches for children around the republic.

"All this plays a positive role in socio-economic development and also in terms of giving the youth something to do," Khabullayev says.

The outlook for most of the youth in Dagestan is grim, feeding the growing rebel ranks. Official unemployment stands at 11.6%, but experts say it is several times that. Most jobs will likely come from the government, and that means being targeted by rebels seeking to build a separate Islamist state. Turn to religion and the youth face violent scrutiny from the security services, who are regularly accused of kidnappings and extrajudicial questionings.

"It's as though they are closing their eyes to the main problems," says Gulnara Rustamova, a local human rights activist. "And as long as the money is coming in, there is more to divvy up, there is something more to fight for."

In addition to promoting the football club, the Kremlin has also announced a £9.4bn plan to build a string of ski resorts across the violent Caucasus, in a further attempt to bring work, and peace, to the region. Yet many activists say it is merely another sign that the Kremlin is at a loss over what to do about the region, amid increasing violence there and a growing nationalist movement in the Russian heartland that wants Moscow to let go of the last troublesome remnants of its empire.

But that's not how the fans see it. They're more concerned with Anzhi's poor showing on the pitch than the fact that the club, essentially, represents the Kremlin's lack of policy in the republic.

Anzhi is currently only eighth in the Russian league, despite its high-profile players. At least they rank above Terek Grozny, the club loudly promoted by thuggish leader Ramzan Kadyrov in neighbouring Chechnya, which currently holds 11th place.

"Our region is tense, it's a hot spot," says Artur Dobronravov, a member of the Anzhi fan club, Dikaya Diviziya (Wild Division). "But football is good PR – now everyone in the whole world knows about Anzhi."

His dream is to see a World Cup fixture in Dagestan when Russia hosts the tournament in 2018. "It will be a chance to show another side of Dagestan – people could come and see with their own eyes," he says.

It is a testament to life in a low-level insurgency. The common killing of police and, increasingly, of religious leaders who have been sanctioned by the Russian state is punctuated by large-scale attacks. But life goes on as if that were normal.

At Makhachkala's Dynamo Stadium on a recent Sunday, no one pays any mind to the riot police, the Kalashnikovs or the full-body pat downs they need to undergo in order to enter. Thousands of men and boys – and a few girls – watch the match passionately, shouting slogans and waving flags and forgetting for a few hours the life that awaits outside.

"I've supported them since 1994," says Arsen Ibragimov, a 42-year-old car mechanic who is at the match with his son and nephew. "Everyone thinks Dagestan is some animal planet, but we live normally. Even foreign players can come here."

Chistyakov says: "Many criticise the club for spending huge money on transfers, but that's just the tip of the iceberg. It's so the team can change. And parallel to that, we're preparing more important things. We have a higher task – to change life in the republic."

Volatile and poor



Dagestan is one of the poorest republics in Russia, with an average salary of 12,000 roubles (£245) a month. Officially unemployment stands at 11.6%, but it is thought to be much higher.

Since joining Anzhi in August, Samuel Eto'o has become the highest paid player in the world, netting – depending on which rumours you believe – either £9m or £20m a year.

Club president Suleiman Kerimov allegedly bought Roberto Carlos a Bugatti, which cost at least £1m each, for his last birthday. Dagestan is also the most violent republic, with 204 people killed and 149 injured in attacks in the first six months of 2011, according to Caucasian Knot, an independent observer.

Of that number, 54 civilians were killed and 74 injured during shoot-outs between security forces and rebels, attacks on police, and explosions. The group counted 46 terrorist attacks and 15 kidnappings.

Sixty-two police have been killed so far this year, according to the interior ministry. since the start of the year, while around 100 suspected rebels have also been killed.