Economics

Print
Russia Slashes 2018 World Cup Spending Amid Economic Crisis

1 Jul, 2015

By: Mary Helen Sprecher
Reports: Fewer Hotels, Smaller Sports Facilities than Promised; However, Putin Says Games Will Go On

In the wake of its mounting economic crisis, the Russian government has ordered cuts in spending on the 2018 World Cup.

The total amount to be slashed from the budget is 30 billion roubles (about $560 million).

(Quick show of hands. Does anyone think is going to end well?)

According to a Reuters article in Yahoo! Sports News, Sports Minister Vitaly Mutko said most of the cuts would be in the number of hotels built. Stadium construction, he added, would not be affected.

This will not come as a consolation to those who expect to attend the World Cup, particularly journalists who tweeted hilariously awful photos of subpar accommodations at the Winter Olympics in Sochi.

"Of course it's a question of optimizing the preparations. We're primarily taking out the excess hotels," Mutko was quoted as saying by R-Sport, which is part of RIA news agency.

Dmitry Efimov, a representative in Russia for soccer's governing body FIFA, later told R-Sport: "This is a reflection of the difficult economic situation but this should not have a negative effect on the event itself."

Try telling that to Rio. Over its one-month course, the World Cup there brought more than 3,429,873 people to the country - much more than the number of hotel rooms available. As a result, Airbnb was called upon to help organizers catch the overflow to the housing situation, with the end result of 20 percent of attendees staying in an Airbnb; 120,000 people stayed in more than 18,000 Airbnb homes in Rio de Janeiro alone and generated $40 million for local residents.

Here’s hoping Russia is Airbnb-friendly.

Putin, of course, and other officials in Russia are adamant that the World Cup will go on as planned in 2018, despite investigations into alleged corruption at FIFA and how Russia was awarded the 2018 finals.

"We won in a free fight and we are going to host the World Cup," he told Reuters and other international news agencies.

"There is no risk to Russia hosting the World Cup," Mutko was quoted as saying by RIA news agency.

The Reuters and Yahoo! article noted that Putin will do all he can to ensure the finals are not taken away from Russia, particularly in light of the fact that a presidential election is due in 2018 and he sees the tournament as a chance to showcase Russia (not to mention himself) in a positive light.

But Russia has lowered its sights in recent months after winning the right to host the finals with a bid promising new stadiums, hotels, training grounds and health facilities in addition to airport renovations and new high-speed rail links.

Before the new government decree, the World Cup organizers had already axed plans to build 25 hotels, cut the number of training grounds and reduced the capacity of some of the venues to save on building costs.

Building materials are now being sourced locally from Russian providers because of the rouble's decline against the U.S. dollar in the past year, pushing up construction costs.

Print

Subscribe to SDM