What economic growth will the Sochi Winter Olympics bring to Russia?

In 2007, when the International Olympic Committee selected Sochi, Russia, as the host site for the 2014 Winter Olympics, this seaside town with a population of only 370,000 did not yet have the operational capacity to host large-scale sports events.

Seven years later, the Russian government started construction of 378 facilities in Sochi, and the local government built 46 facilities.

Among these projects, only 13 are directly used for the sports games. The chairman of the Coordination Committee of the Olympic Organizing Committee said for this Winter Olympics that 85% of the infrastructure required for the Sochi Winter Olympics needs to be started from scratch. For this small city, how to use these new facilities after the Olympics has also become a serious problem.

The ongoing Sochi Winter Olympics has encountered more problems than that. From poor hotel conditions to "the most expensive Olympics", Western reporters have complained about the Sochi Winter Olympics in a variety of ways.

The "New York Times" said that Western criticism is like an avalanche, but Russians wipe it off like snowflakes dusting off their own clothes. Russian Deputy Prime Minister Kozak responded with "the victor should not be blamed".

The most extravagant Olympic Games in history?

Some foreign media said that there are 98 events in the Sochi Winter Olympics, with an average cost of 520 million per event.

Among the various criticisms of the Sochi Winter Olympics in the West, "spending up to 51 billion US dollars" has become the most eye-catching "crime". They claim that in all winter and summer Olympics, there has never been any The cost of one session is so high that almost every gold medal awarded costs as much as 520 million US dollars.

According to reports, the Sochi Winter Olympics has 98 events, with an average cost of US$520 million per event, making it the most luxurious Olympics in history. The cost of this Winter Olympics has exceeded the total investment in the past 21 Winter Olympics. The cost is also more than three times the budget of the 20th Men's Football World Cup, another major sports event to be held in Brazil in June this year. (The Brazilian government announced in June 2013 that the 2014 World Cup planned to cost US$16.5 billion. The biggest investment in the World Cup in history).

A spokesman for the Russian government said that such a huge investment is largely used to improve infrastructure, but also to upgrade urban foundations, such as the construction and renovation of airport train stations, as well as the construction of new roads, housing, hotels and a conference center, as well as other necessary utilities. In addition, the construction cost of the First Olympic Stadium is as high as US$600 million. However, the stadium will not host any Winter Olympic events and will only be used for the opening and closing ceremonies.

Security is also one of the important expenditure items. According to CNN, in order to ensure the safe and orderly holding of the Winter Olympics, Russia invested US$3 billion in security and deployed more than 70,000 security personnel, which is equivalent to twice the number of police officers at the 2012 London Olympics. At the same time, warships were deployed in The sea is on standby, drones patrol the air, and anti-aircraft missiles and special forces are also deployed to relevant areas. What is even more unexpected is that part of the security expenditure is actually used to kill stray cats and dogs in Sochi, and a specialized company is responsible for capturing and processing them.

Other costs include hiring relevant staff. CNN revealed that this Winter Olympics is expected to attract 3 billion viewers. In order to better host the Winter Olympics, the Russian government will recruit 7,000 chefs and waiters to provide the best food logistics support for athletes from all over the world. At the same time, 25,000 volunteers will be recruited to participate in the Winter Olympics.

In addition, according to the British "Daily Telegraph", as many as 5,000 volunteers were moved to hotels and apartments prepared for journalists because contractors failed to build staff dormitories on time. Media workers have to stay in private hotels, and the construction contractor will bear this additional huge cost.

However, in an interview with the media, Russian President Vladimir Putin firmly denied the claim that the total investment in the Sochi Winter Olympics exceeded 50 billion US dollars. He said that everyone makes numerical mistakes and the total cost is 214 billion rubles.

Russian Olympic Committee Chairman Zhukov insisted that the audit of the Winter Olympics found no large-scale corruption. He also said that approximately US$43 billion of the US$50 billion investment was used for local infrastructure construction in Sochi, giving the city 20 new projects. Roads, new sewage systems, new power stations and oil and gas pipelines, investments that benefit the future, should not be included in the cost of the Olympics.

How much will the Winter Olympics help the Russian economy?

Although investment brings some stimulation, it is only a drop in the bucket.

The Wall Street Journal stated that with the Sochi Winter Olympics kicking off, the glorious event that was once considered to bring glory to Russia is now being questioned as to whether the US$50 billion is Should be used for other investments. The Russians don’t seem to buy into this expensive Winter Olympics either.

The Economist stated that according to a latest poll by the independent Levada Center, nearly half of Russians believe that the reason for the huge expenditure is corruption. Of course, some Russians benefit from huge construction projects, but for others the money would be better spent repairing dilapidated hospitals, roads and schools.

According to a report by the Development Center of the Russian Higher School of Economics, in the first quarter of last year, the Russian economy as a whole stagnated, but the economy in southern Russia grew rapidly, with a growth rate of industrial production reaching 7. The report believes that preparations for the Sochi The Winter Olympics have driven the rapid growth of industrial production in southern Russia.

A research report recently released by European Renaissance Development shows that the Sochi Winter Olympics will accelerate local economic development and consolidate its status as a tourist destination. However, Alexander Zhukov, chairman of the Russian Olympic Organizing Committee, has previously stated that the investment in infrastructure for the Sochi Winter Olympics will take decades to recover.

Allison Stewart of Oxford University's Sa?d Business School says there tends to be an average cost overrun of about $180 per Olympic Games. But now the Sochi Winter Olympics overrun rate is 500. The New York Times stated that an investment of more than $50 billion, 4.25 times the initial budget, has become a burden, and due to the fall in Russian domestic commodity prices and the drying up of overseas investment, the growth of the Russian economy, which relies on natural resources, has slowed down. The Kremlin has stated , the Russian government is preparing to cut spending.

The New York Times also believes that although the investment in the Winter Olympics has brought a certain stimulus, such stimulus will be a drop in the bucket for the stagnant Russian economy. Although other major countries showed signs of economic recovery last year, Russia's economic growth dropped to 1.3, the lowest level in 10 years except for the 2009 global economic crisis.

The Organization for Economic Cooperation and Development not long ago called on Russia to immediately reform its labor policies, productivity, government and legal bureaucracy and other factors that restrict the country's development, and wrote in a survey report on the Russian economy: " As energy prices stagnate, labor and capital are used up, and economic growth begins to decline below pre-crisis levels, thereby developing a stronger, balanced economy and reducing the economic development burden on the country's resource extraction rents. Dependence is a crucial challenge.” In this case, the huge cost of hosting the Winter Olympics suddenly became a disadvantage.

Reuters Breakingviews columnist Pierre Briansson said that Russia, like other emerging economies, experienced violent fluctuations in the financial market in January, and the Winter Olympics, which was originally dedicated to showcasing Russia’s strength, also The world is reminded that the country's economy is also inherently fragile.

He also believes that Sochi will have little effect on Russia's economic recovery. The Winter Olympics draw smaller crowds than the summer extravaganza, and the trickle-down effects of the massive investment in infrastructure are barely felt outside the Caucasus Mountains. The international rating agency Moody's also issued a report stating that the Sochi Winter Olympics is unlikely to bring a big boost to the Russian economy.

The "Wall Street Journal" said that despite all the headaches, the quality of this Winter Olympics is undeniable and there will still be unforgettable and wonderful performances.