Will World Cup 2018 boost Russia's needy economy?
Even though Russia has shown a strong intent to compete with the West, led by the US at various theatres across the world, its military and economic conditions are not really great to put it at par with the frontline powers of the world today. It's mainly the nationalistic resolve of the country which pushes it to assert its voice on global issues - be it related to Syria or Ukraine.
The football World cup, which took off in Russia on Thursday, June 14 with the hosts blowing away its crucial oil partner Saudi Arabia 5-0, might lay the path for a significant turnaround for Vladimir Putin's land, many of his supporters believe. There are, however, voices that also feel that irrespective of the claims, the world cup might not eventually help the Russians in terms of long-term financial benefits, said a report on CNBC.
Russia is hosting the biggest-ever world cup this planet has seen which will conclude on July 15. It is the first time the country is playing host to such a mega event and reportedly spent an excess of $14 billion, the most since 1930 by any host nation, to make it a reality.
The CNBC report cited a report published by Moody's Investor Service last month analysing Russia's mega project which concluded that the economic benefits from the world cup will be short-lived for the planet's largest country.
"Much of the economic impact has already been felt through infrastructure spending, and even there the impact has been limited. World Cup-related investments in 2013-17 accounted for only 1 per cent of total investments," the report quoted the Moody's report as saying.
According to Kristin Lindow, a senior Moody's official said the one-month duration of the event will not be enough to boost Russia's $1.3 trillion economy.
The report cited the Russian media as reporting that the country will have spent 883 billion rubles ($14.2 billion) which is more than the official cost of $11 billion. It was also added that the event's official budget underwent changes 12 times since Moscow won the bid to host the tournament this year in 2010.
The eleven cities that are hosting the world cup have seen a boost in infrastructure and other facilities and it will increase more revenues and reduce future capital spending, Moody's said but at the same time, the expenditure has adversely affected the government's finances in other areas of the vast country like Samara Oblast and the city of St Petersburg, the CNBC report added.
President Putin has stressed not to allow the stadiums in which Russia invested for this world cup to go to the "flea markets" after the event gets over and Moody's has also predicted that the airports in Moscow could be the real gainers because of upgraded facilities and the tourist inflow for the tournament, the report added.
There is also a surge in hotel and eatery businesses because of the tournament which has given an image makeover to Moscow and other cities that are hosting the world cup matches, it said.
But yet, Russia's tense relations with the West because of political relations; the menace of hooliganism and other procedural issues related to high travelling costs and visa regulations could affect the countries' honeymoon period over the next one month, the CNBC report added.