Thursday, February 20, 2014
The Economic Impact of The Olympics
The Olympic games in Sochi are expected to be the most expensive games in history. This came as a surprise to me after hearing all of the reports of the unfinished buildings and dangers that the visitors are facing. Many people believe that the games are a great opportunity to boost the economy of the host city, but that is not the case for Sochi, or Russia as a nation. The article estimates these games costing in excess of $50 Billion. The reason for this might have stemmed from the 2008 Summer games in Beijing, which took the world by storm and set an standard for entertainment. But the costs of the games has far outweighed the revenues. Some experts think that Sochi may not benefit now, but they will be known for their participation as a host city and historically this has drawn companies into emerging economies to open their businesses. Whether or not this happens in Sochi, I guess we will have to wait and see. The olympic games are known for creating employment, while it may be short lived, it does seem to lower national levels of unemployment. Russia has a very tight labor structure and unemployment is very low to begin with, so we have not seen any remarkable change, simply because there is not room for change.
Subscribe to:
Post Comments (Atom)
5 comments:
While these games have the highest cost in olympic games history, I do not believe they will reap economic benefits for Russia. Take China for example, after the 2008 games in Beijing and China's 40 billion dollar investment, there olympic village looks abandoned. This is occurred 6 years after the games. This shows that China did not or will not receive revenue from their investment. I believe this will situation will happen again for Sochi.
It is hard to say what the benefits of the olympics will be, but according to this article, it does bring jobs that last well past the olympic games. To Sochi, this seems very important. The games could in fact boost this area of Russia and allow for new businesses to be brought in and eventually stay.
It seems like it is not a good deal for Russia to hold Olympics considering its huge cost, but thinking in long-term perspective, it will continuously bring benefits to Sochi as Olympics gives city a title as a host city. Like the article says, hopefully there will be more business going on then create more jobs.
Given how much was unfinished when the Olympics started (there are pictures around the net showing Sochi's unpreparedness), I doubt that $50 billion was all spent on the Olympics. Corruption is undoubtedly to blame for the high cost. In the long term, I don't think Russia as a whole will benefit. More likely that the facilities built at Sochi will fall into disrepair from neglect in the future.
I think that this could still help them economically in the long run because they are known for being host city, but it depends on how they keep that reputation up. This olympics has been widely criticized and I really don't see it getting any better. If they find a way to clean up their hurt reputation is still may help them out.
Post a Comment