Countries choose to
organize a mega event such as the World cup, commonwealth games, or the Olympics
event organizers and promoters either fund or widely distribute ex-ante studies
highlight the event's positive effects. In theory, these investments could come
from supranational organizations, and private or public stakeholders. emerging
economies such as China and Brazil intend to use mega-events and hope that the
developing countries might make huge investments They nations face significant
challenges due to a lack of stadiums, lodging, transport networks, and other
sports-related infrastructural facilities. As a result, the cost of each
mega-sport event organized by emerging markets has been outrageously high.
As an example, In the
run-up to the event, the first ecstasy in 2004 when Africa was granted the
rights to host the mega event was significantly tempered, as were forecasts of
visitor numbers and economic growth. There will be two Winter Olympics in
addition to the $1.7 billion in other costs. Even excluding construction costs,
the operational costs for the Summer and Winter Olympics typically exceed $1
billion. The allocation of funds does not always benefit the host city, with a
sizable portion frequently going to global investors, non-local hospitality providers,
and international sporting government agencies.
There are some
long-term benefits of hosting mega-events has long term benefit such as
Tax rates
The economic activity
associated with mega-events increases revenue and tax collection for host
governments. Wagering sites and related corporations also pay a lot of taxes to
the government, often up to 20% of their earnings. The final count is
significant.
Foreign exchange
Millions of dollars
flow to developing economies all over the world, partly from officers working
in other countries. This is particularly true in emerging economies, where the
majority of talented players leave for higher-paying jobs elsewhere.
Staging a mega sports
event would also cause a slew of chain reactions as a result of increased
tourism, including:
- Decrease in joblessness as there would be
more job opportunities for local workers
- an eventual increase in government spending; and
- A boost in export earnings as a result of
pre-event infrastructure spending.
- Businesses would benefit from increased economic
spending and have more funds to pay higher wages to employees.
Tourism
Sports tourism,
particularly during certain international tournaments, has enormous business
potential to generate high revenues for the local or national budget. and
is currently one of the primary occupations.
What are the financial
challenges of organizing sporting events in developing nations?
Bidding for the World
Cup or Olympics costs between $60 and $100 million. As a result, while
these sports would generate millions of dollars in economic activity, they
would be short-lived and would eventually harm the economy. According to the
Olympic Games, the econometric analysis illustrates this connection of an
untenable expenditure pattern in which a short-term economic boost is
effectively destroyed by a lengthy downfall.
The second reason
countries fail as hosts is that they underestimate investment costs and welfare
economic gains, which does not guarantee that the tangible benefits will
outweigh the costs. Many of these host cities spend a significant portion of
their revenue on tourism.
Events fail to be
profitable for two reasons:
1. Early overestimating profits or
underestimating costs on a billion-dollar scale.
2. The money distributed
in mega international sporting events does not benefit the host nations,
because the majority of the percentage goes to international investors,
non-local accommodation and service providers, and international sporting government
bodies.
Infrastructure is
frequently built on cheap and impoverished land, hence less profit is received
by the local The hosted event generates a larger economy than was originally
anticipated, and the exaggeration of subsequent budgeting puts the hosting
countries in liabilities.
Many proponents claim
that sports venues and athletic facilities can act as a catalyst for local
economic development. Some other reason that Cup Final hosts have slightly more
success is because of the locations chosen. This reduces infrastructure costs
significantly. Lawmakers must consider and account for the city's current
infrastructure when playing the long-term game. A city should think about its
development strategy and structural inventory. Hosting sports events
solely to enhance tourist dollars without constructing new infrastructure will
fail to yield economic benefits.
Conclusion
World Cup It is a much
larger event than either of the Olympic Games and would provide far more
significant benefits. Over ten years, countries that sponsored the World Cup
had considerably higher GDPPC growth curves.
Sporting events of
global significance, such as the Olympic Games, World Cup, Commonwealth Games and
various sports, draw the attention of the whole world for a limited amount of
time to the host destination. The repercussions are various and diverse, and
could be analyzed in cost-benefit economic terms, in terms of the image capital
investment risk for underdeveloped nations is considerably higher. Developing
countries typically lack the basic resources to host such a tournament and
finish up incurring startup infrastructure costs, which are challenging to overcome
in the World Cup.
Authors Bio: This article is written by Mark Edmonds, an eminent British writer
who aims to elevate education and the economy by delivering exceptional economics
assignment help to students, economists and Entrepreneurs.
Comments
Post a Comment