Russia after the World Cup

10:16 . 17/07/2018 Salı

Hatice Karahan

Hatice Karahan has been a frequent contributor to Yeni Şafak for years, penning columns on a variety of topics for the daily
Hatice Karahan

While the winner of the 2018 World Cup is France, one can't help thinking if another winner is Russia. As a matter of fact, the address the month-long global excitement has also brought along many dynamics in economic terms. If we start our analysis from the days prior to World Cup, we should first talk about the extensive preparations. This corresponds to an economic value of $14 billion, according to the Russian government. Moreover, according to official figures, investments made within the scope of preparations are the main source of the recent GDP growth in the country.

As it is known, Russia's economy has started to make a moderate improvement over the past year after a temporary shrinking trend due to the effects of the oil crisis and Western sanctions. At this point, the Russian government admits that if the 2018 World Cup was not held in Russia, there would be no positive growth figures for their economy. In this context, the number of jobs created as a result of the relevant investments and other endeavors which contributed to GDP in recent years is estimated to be around 220,000.

If we were to discuss the matter restricting it to its current effects only, we may speak of an event that attracted millions (varies depending on the source) of fans to Moscow, and similarly hundreds of thousands of foreign visitors to Russia. Thus, the accommodation and food expenses of a huge mix of domestic and foreign football fans undoubtedly revived the related sectors. Additionally, the transportation and communications sectors have also had their fair share of contributions. In fact, it is clear that the electronics industry involved in live broadcasts was also highly satisfied with such an event.

Estimations of the contribution of football to the Russian economy differs for different institutions and perspectives. While the government predicts an estimated potential GDP contribution of $26-31 billion for the period between 2013 and 2023, some domestic and foreign institutions emphasize that the contribution is only temporary. After all, all the aforementioned dynamics may have merely produced a short-term impact. Moreover, it can also be questioned whether the gains were compared with the expenditures. Some may associate the tax regulations which were stipulated by the Russian government during the matches

Similar questions have been asked not only for Russia but also for previous World Cup hosts. At this point, it is worth noting that it is necessary to distinguish the short term effects from the long-term, or in a similar vein the past effects from the future effects. It is important to note that some indirect and abstract factors that are hard to notice immediately are also concealed among the economic developments that are clearly observed and felt in the World Cup.

We may discuss the psychological factors above all effects of the World Cup which are discussed in academic literature used for analysis. The citizens of the host of the World Cup may be impacted by a “feel good” effect after the pleasant and honorable experience, thus leading to an optimistic economic atmosphere as there is a boost in confidence. Of course, I am obliged to mention that this effect is different for each country.

On a related note, the World Cup experience can contribute to a more positive international perception of the host and increase its brand value. If the host country, which becomes flooded with visitors and remains in the media spotlight for the duration of the event, manages the period successfully, it can benefit from this. This is important from the perspective of influencing various parties ranging from potential tourists to investors.

When evaluating Russia specifically, it is possible to say that the World Cup provided the country with significant gains. Football fanatics bought a ticket to Russia and were warned about safety risks as recent news have labeled the country with negative headlines, but despite this Russia has managed to earn some positive lines among international media. As the FIFA president said, the World Cup altered the negative perception of Russia.

If Moscow wants to push this extraordinary experience to the long term, this is the critical point for creating an initiative.

#world cup
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