How are the 2014 Winter Olympics affecting Russia’s Economy?

Leslie Griger

We all know that the Olympics are a big deal; they always have been and always will be. Both the Summer and Winter Olympics are among the most widely televised, and most watched programs of the year. Due to all of this publicity and popularity, the ceremonies and even competitions are normally relatively extravagant. But unlike most other years, this year the Olympics were held in the “developing” country of Russia.

Though most do not think of Russia as a developing country, compared to other Olympic locations such as the United States, Canada, and Australia, Russia is pretty far down on the developed scale. In recent history, there has been an increase in the hosting of sporting events in developing countries, such as Mexico City, Moscow, and Sarajevo, and more often than not, the economies of those countries do not really improve at all, which is the opposite of what most would think. It is accurate that hosting the Olympics does create many new jobs for the people of Sochi, Russia, but the main concern is that the jobs will not last past the closing ceremonies.

There are quite a few jobs that end when the athletes leave Russia, but studies have shown that, “infrastructure and some jobs are created that last well after the games have moved on” according to Business Insider. So even after the closing ceremonies, the economy still has potential to rise.

Though there is a large sum of money coming into the country throughout the games and maybe for a bit after, there is an even larger amount of money going out to prepare the country and simply run the games. According to the International Business Times, the Sochi Opening Ceremony topped the list of most expensive openings “costing in excess of $50 billion and far exceeding the 2008 Beijing Summer Games, a record many said would never be beaten.”

But even though the cost is extremely large, there are many people that still believe the economy of Russia will improve from hosting the Olympics besides just the jobs that will be left over; after all the Olympics bring both people and money from every corner of the globe.

The popularity alone brought to Sochi could help the economy. Being a city that has hosted the Olympics heightens the appeal of the city in many perspectives. First of all, Russia is already a popular tourist destination for many reasons, but Sochi is normally not on the list of cities within the country. After the Olympics, Sochi might now have the attention and publicity it needs to attract the tourists coming into Russia.

Benefitting from a rise in tourists would be the businesses. If there are more tourists, maybe even more Russian citizens living in Sochi, more business owners will be tempted to open a business in the area because the demand for goods and services will be greater, boosting the economy. The tourists and businesses come full circle, ultimately leading again to the creation of more jobs for the people of Sochi, and the neighboring cities. In general, the people of Sochi have definitely considered their opportunity cost. Though the games are expensive, the only alternative would be to not have the Olympics games, and that would be a much worse choice. Sochi already has an economy that is not in very good shape, and without the Olympics, there is a very small hope of the economy improving in the near, or even relatively distant, future. Overall, even though the Olympics are expensive and a large amount of work, Sochi made the right decision for the country and the economy to host.

Work Cited

Harress, Christopher. "The Economic Impact Of The Winter Olympics: Not Great For Russia But Sochi Stands To Gain." International Business Times. 8 Feb. 2014. Web. 25 Feb. 2014. <http://www.ibtimes.com/economic-impact-winter-olympics-not-great-russia-sochi-stands-gain-1554153>.

Perlberg, Steven. "A Strong Economy Is The Secret To Winning Medals At The Winter Olympics." Business Insider. Business Insider, Inc, 9 Feb. 2014. Web. 24 Feb. 2014. <http://www.businessinsider.com/economics-sochi-olympics-2014-2>.

Reuters. "Moody's: Olympic Games Unlikely to Boost Russian Economy."VOA. 5 Feb. 2014. Web. 25 Feb. 2014. <http://www.voanews.com/content/reu-olympic-games-unlikely-to-boost-russian-economy/1844858.html>.

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