FIFA World Cup 2014 & Economy of Brazil

Hosting a major event like FIFA world cup is an incredible achievement for any country. Every event of such stature is capable of creating a difference in economical, social and psychological terms.

Let us find out some very important impacts that FIFA WC would make on Brazil:

FIGURES THAT MAKES AN IMPACT:

-Economy will produce an additional of R$ 142 billion (Rs. 3862962146106.80) between 2010 and 2014.

- 3.63 million jobs per year between 2010 and 2014 and R$ 63.48 billion of income for the population.

-The production will result into tax collection of R$ 18.13 billion by Govt.

-Brazilian Gross Domestic Product (GDP) is estimated at R$ 64.5 billion for the period 2010-2014 – an amount equivalent to 2.17% of estimated GDP for 2010, namely R$ 2.9 trillion.

A BIG OPPORTUNITY i.e. TOURISM:

-The other impact Brazil would see is TOURISM INFLOW. Increased no. of tourists will boost spending. An event with such profile attracts tourists’ inflow; not only directly, with fans who will watch the games, but also indirectly, as a result of the international media exposure.

Brazil has not exploited the tourism adequately due to its declining quality of facilities and stagnated inflow of tourism. Hosting world cup is an opportunity to provide the adequate and attract the tourism with a fresh bow.

As per some studies, the event may result in an increase of up to 79% in the international tourist inflow to Brazil in 2014, with even possibly higher impacts in subsequent years. In the period 2010-2014, that figure should be as high as 2.98 million additional visitors.  The tourist inflow directly and indirectly induced by the World Cup is expected to account for additional income up to R$ 5.94 billion for Brazilian companies.

Here is graph depicting the tourists spending between the period 2010-2014

The World Cup may put an end to Brazil’s five-year stagnant foreign tourist inflow, from current 5 million to 7.48 million until 2014 and 8.95 million in 2018.

Here are some investments that Brazil has made for the event to run it smoothly, which may uplift the socioeconomic status of workers.

- Building and renovation of sports stadiums

- Expansion and adequacy of the hotel complex

  - Investments in media and advertising

- Investments in information technology

- Implementation of media and broadcasting centers (IMCs and IBC)

Some economists are not sure about the immediate impact of world cup on BRAZIL’s economy. But they are convinced about its long term impact. Brazil is set to host 2016 OLYMPIC GAMES as well, so it is win-win situation for the country.

"The net gains… will be substantial, but they are unlikely to be realized during the event; the gains will come in the years following the event and will be indirect," said Walter Boettcher, chief economist at Colliers International.

"Playing host will immediately raise the global profile of a country and might even change perceptions of the host nation, resulting in increased tourism and political benefits and alliances, but accrue over many years," said added Boettcher.

"The World Cup will act as a giant advertisement for Brazil and its host cities, showcasing them as places in which to invest, visit and live," he added.

CHALLENGES FOR BRAZIL:-

- Energy

- Arterial transport (highways, airports etc.)

 - Event infrastructure (stadiums, IBC/IMCs, Fan Parks)

- Hospitality system

- Safety

- Urban planning (public utility services, urban operations, quality of city streets, public transportation, operations under adverse conditions)

- Support services (food, taxi, communications, health and retail)

-To sustain the success of an event means development of people, communities and result into social integration. Brazil is struggling of many social threats like hunger, child prostitution etc. Making better use of opportunity to eradicate such treats will be a challenge.

- According to the criteria adopted by the United Nations Environment Program (UNEP), the economic, social and environmental dimensions must be integrated to meet the challenges of six priority areas: climate change, disasters and conflicts, ecosystem management, environmental governance, harmful substances and efficient use of natural resources.

An event such as the World Cup, which has the provision of services as one of its central pillars, cannot ignore its responsibilities in relation to these issues. The socio-environmental aspect permeates all of its activities. For example, in directly performing or subcontracting services, it is important to identify criteria that ensure workers’ health and safety, working conditions, payment of rights and benefits, quality of life, strengthened learning systems as well as post-event employment and sustainability.

In relation to the public, it is essential to ensure urban quality, accessibility, security, access to information, environmental education and usefulness of facilities, as well as urban interventions after the event. The government agencies and private entities involved with the World Cup should be required to ensure the responsible use of natural and economic resources, and responsible sourcing of acquired raw materials, products and services. The goal is to reduce carbon dioxide (CO2) emissions from burning fossil fuels, as this is one of the major causes of the greenhouse effect.

Time to wait and see the most popular game of Planet!! 












Source: ERNST & YOUNG TERCO