Can a Football Tournament Transform the Russian Economy

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There are of course only a few sporting events which have the potential to affect an economy as large as Russia’s.  Indeed the Olympics and the World Cup are probably the only two that come even close.  Despite some incredible sounding predictions it still seems unlikely that even one of the world’s biggest sporting events has the capacity to make even a small impact.

There’s no doubt that Russia’s economy needs a boost and it needs one fast. President Putin has pretty much been allowed to be flexible on the democratic process on the understanding that he brings prosperity and jobs to the Russian economy.  That has not been easy over the last  few years, with a huge fall in oil prices and the ongoing sanctions placed as a result of Russia’s international policies.

The World Cup has been seen by many Russians as a chance to start integrating Russia back into the world economic marketplace where it’s become increasingly isolated due to the Ukraine and Syria issues. The World cup is huge and brings plenty of potential in tourism and other related effects.  The last report published actually estimated that there could be a total impact of around $30 billion to the Russian economy.

This sounds a staggering amount but just to clarify the report suggests that this is the measured impact on GDP over the 10 years 2013 to 2023.  This is roughly the time scale of the project ranging from the initial infrastructure projects to the ongoing impact from these investments after the tournament has finished.

Of course, hosting the World cup isn’t cheap, indeed the Russian state has probably spend around $11 billion on the various infrastructure needed. However much of this spending has revolved around roads, transport links and stadiums which would have been built anyway even if the tournament hadn’t been held here.

Confusion like this is why these economic figures about sporting events are always so hotly disputed.  It’s extremely difficult to isolate costs and resulting benefits from the actual event especially when it comes to things like transport links.  Some of these investments can genuinely invigorate areas especially in isolated and neglected regions.  The problem is that economic benefits can easily be attributed to the event over this long time scale even if only some of this is genuinely attributable.

The easiest major benefit to measure is of course the tourism that the actual event brings.  There has been some trepidation from many football fans from attending this event, with rumours of Russian hooligans and worries about policing.  It’s important that tourists have a great time and these impacts are minimal as they can also have a long term effect on Russian tourism well after the event has finished.

Obviously many people will not risk travelling to the country for a variety of reasons, however football fans are usually extremely hardy and will support their teams whatever the costs.  Many will prefer to enjoy the tournament from home and digital streaming, perhaps watching Match of the Day stream across the internet. Yet the tournament will almost certainly be a sell out with transport links from European countries fairly reliable and inexpensive.

Russia has of course, already invested heavily in another sporting event this decade in the form of the 2014 Winter Olympics.   Spending on that was reported as being over $50 billion which seems incredible, and if true made them by far the most expensive Winter games in history.

Ultimately though, these events are worth even more than money to the President Putin – they are a way of promoting national prestige.  With Russia facing many challenges abroad with their overseas policy these sporting events are an ideal way of promoting Russia on the international stage.

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