Typically, hosting mega events such as the FIFA World Cup has been a privilege assigned only to developed nations. However, since 2008, a number of developing nations around the world have been able to obtain the rights to host global competitions. After China hosted the 2008 Summer Olympics, India was host to the Common Wealth Games in 2010. This year, Russia is hosting the 2018 FIFA World Cup, which is perceived to be a positive step for developing nations. However, some speculations highlight concerns towards the real benefits and expenses associated with these events.
Economic Impact of FIFA World Cup on Russia
The World Cup has without doubt proven to be an incentive for countries like Russia to create an infrastructure required to handle the influx of fans and other visitors arriving into their nation. Furthermore, it promotes international exposure and increases the need for business and tourism alliances.
While hosting an international event such as the FIFA World Cup can speed up investments in certain areas of infrastructure that are otherwise overlooked, often the opportunity cost of a shift in priorities can also be high. Channeling monies towards infrastructure for a mega event such as a World Cup means that budgets are cut towards other public services, increase in taxation of the public and even increase in government borrowing.
Growth in Numbers
On evaluating the one-time as well as the long-term effect that simply prepping for the World Cup had on Russia’s GDP, creation of jobs, development in host regions and per capital income, it was found that 210 thousand Russians received additional skills for preparation and hosting FIFA 2018. This included skills human talent in the fields of hospitality, transport, communications, management, personal and social services along with volunteers and stewards. Additionally, 8 new stadiums have been built for the event, four arenas went through reconstruction and 95 training grounds were created, which will eventually have a positive influence on the development of physical fitness and sports in Russia.
Hosting the FIFA World Cup presented some evident political ramifications in Brazil in 2014. The construction of hospitals, airports, urban mobility infrastructure put the country’s government in a positive position. While the government also took blame for the deficiencies in the preparation, the apparent success of the tournament was also credited to the government of Brazil.
Russia too is in the position to benefit as host country, opening doors to building relationships with countries around the world, winning a chance to rebrand itself and open doors to new dialogues in international diplomacy.
Indians Flock to Russia
India may still be a few years away from qualifying for the World Cup, but there is no shortage in football fans willing to shell out money to visit Russia and catch an exciting match. With the proximity to this year’s host country being favorably close, rich Indians are flocking to Russia for the FIFA World Cup, seemingly unfazed by the growth in airfare and hotel rates.
In spite of rates going up by at least a 20%, there is a significant rise in tourism to Russia this year. Online travel portals experienced a 23% rise in month-on-month flight searches from India to Russia. Russia’s visa free entry initiatives for those with World Cup tickets further contributes to the rise in tourists from India.
Another Indian industry that is benefiting from the football world cup is consumer products. Television manufacturers are basking in the increase in sales this world cup season. With viewer ships to be as high as 100 million, football fever is here and not willing to go anytime soon!