The Fifa World Cup 2018 has arrived with much fanfare. It is one of the greatest sporting extravaganzas and the world is likely to be glued to this tournament. As Russia is hosting the football world cup this time round, it is an excellent opportunity for the Russian President Vladimir Putin to showcase his infrastructural achievements. The tournament is sure to have an impact on the Russian economy and infrastructural penetration. The million dollar question is can the Russian economy sustain the fillip that will be provided by this sporting spectacle. It is estimated that the World Cup 2018 could have an impact of around $31 billion on the Russian economy and boost the country's GDP to somewhere between 1.6 trillion rubles ($26 billion) to 1.9 trillion rubles ($30.8 billion).
Hosting a tournament like the Football World Cup requires a boost to the transportation system and also entails massive development of social infrastructure. About $638 billion has been sanctioned for this tournament by the Russian authorities. The tournament is spread over 11 Russian cities and the allotted fund has ensured significant infrastructural development of these cities. Around 100000 jobs have been created with 13000 people being involved in the construction and renovation of the 12 stadiums that will host the football matches. All of these are multipurpose stadiums and the infrastructural spending on these stadiums will be carried forward even after the World Cup ends.
About 600 billion rubles have been invested only for infrastructural development. Eleven airports are being refurbished, 13 hospitals have been reconstructed or renovated along with 12 new power stations and 29 utility facilities. In addition to this, 96 training sites have been constructed with a total training capacity of 16000. These training facilities will host the international football teams during the World Cup and will be opened for the Russian youth after the tournament. Russian authorities have claimed that they have opened 15 volunteer centres to train 30000 volunteers who will be integral to this event. The effects of organising an event of such magnitude have future benefits as well. Judging from the past experience, the number of international arrivals has been seen to increase for two years after the tournament gets over and this will augment the Russian economy. Additionally, all the 11 host cities in Russia show a positive trend in the sustainable cities index and 7 out of the 11 cities show a positive curve in the quality of living ranking according to the ranking by expert rating agency in Russia and the Urbanica Institute of Regional Planning respectively.
The World Cup 2018 is sure to boost the tourism industry in Russia. Three billion spectators are expected to watch the World Cup with 3000000 attending the tournament itself and 1000000 international guests expected to visit Russia during the World Cup. This is going to initiate a large inflow of funds for the Russian exchequer. Based on the total number of tickets sold, around 500000 foreign spectators are to set foot in Russia to support their national teams. Data drawn up from previous World Cups has revealed that the spectators who turn up for the tournament spend twice as much as compared to the normal sightseers. This time around, spectators are expected to spend $5000-8000 for their visit to Russia keeping in mind travel cost, accommodation, food and souvenirs. Based on these figures, the overall cash inflow generated from the spectators turning up for the tournament is projected to contribute an additional $ 2.5-4 billion to internal consumption. Additionally, tourism infrastructure has also developed largely due to the World Cup. 27 new hotels have been built and a 71% increase in the volume of tourist services in the host cities and a further 57% increase in the number of domestic tourists are expected.
Russian authorities have emphasised on the development of their transport system as a build-up to the World Cup. Russian sources have informed that this year’s World Cup has seen 30% of the total budget allocated to the development of sports infrastructure whereas 50% of the funds have been used for transport development and improvement. Three new metro stations along with 12 new roads and junctions have been made and 31 railway stations in the 11 host cities has been reconstructed to provide easy accessibility.
Are big ticket tournaments an easy route to development?
It must be mentioned that hosting major sporting tournaments may not necessarily guarantee the growth of an economy. The previous World Cup,which was organised by Brazil, did not turn out to be a great success story. There was a lot of negative campaign involved with the tournament. About $6.5 billion to $10 billion were sanctioned for the development of infrastructure, social services, and the building of stadiums during that World Cup. Economists point out that the amount was similar to the amount spent over the years by the Brazilian government on its Social Welfare System ever since it was created. Even India did not witness major economic growth due to the 2010 Commonwealth Games. Large corruption charges erupted and the event received a good share of negative publicity. Mani Shankar Aiyar, former Indian Minister for Youth Affairs and Sports, said in April 2007, that the sporting event was “irrelevant to the common man.”
The Bird’s Nest Stadium in Beijing required an investment of $480 million and requires $11million a year for maintenance. It has hardly seen any sporting activity after the completion of the Beijing Olympics. It remains to be seen whether the World Cup in Russia will mark a change or will be just show and no long-term economic success.