When sport events such as Olympic Games and World Cups are announced by the FIFA committee, it generally creates a noticeable thrill in people who live in countries hosting these events.FIFA awarded the right to host the 2022 World Cup to Qatar.Beyond that, Qatar is the first country in the Middle East to get this honour.Such games have a significant impact on the host country’s economy.
To understand how the World Cup would help Qatar’s economy, we need to briefly glance into data related to expenditures.The Qatar Government has outlined a plan to spend approximately $150 billion.A huge proportion of this expenditure will be devoted to infrastructure and other projects such as a mega structures, transportation, education and the health sector.The first phase of the Project is the New Doha International Airport.When it is finished, the new airport will have the capacity to cater to 25 million passengers per year.The cost of this Project is $10 billion.Apart from that, other projects such as a deep water seaport and the rail network will cost ; $7 and $25 billion, respectively.
When the impacts of new investments on the economy are taken into consideration, they will help to set the stage for growth in the future.It will also boost tourism and lead to the creation of a pole of attraction in the region.Spending will have remarkable repercussions for the country’s financial sector.Especially, the banking sector will be one of the main beneficiaries.Since many enterpreneurs will receive support from banks for credit, this,in turn, will create quick recovery for the banking sector, and they won’t be affected by the global financial crisis.Therefore, future plans will enable banks to generate revenues and increase fee generating businesses.Furthermore, all these developments will contribute to Quatar’s competitiveness among the other Middle-East countries, and Qatar will become one of the financial centers for the region.
On the other hand, it is not easy to asses such plans.There are always risks.To start with, projected spending creates pressure on government finances because the Qatar government has already issued several bonds in the past years, and now has increased its loan from local banks.That’s to say, while the banking sector is saving itself from the global crisis, it can drive the government further and further into dept.Actual spending might tend to exceed the budget of the government.
To sum up,the Middle-East countries are convenient and suitable places for huge building projects.Qatar is one of them.During the World Cup, it will need a huge number of stadiums, hotels and so on.The steel and aluminium industry is one of the basic components for building. Thus, the demand for steel and aluminium in this region will increase.The products can be stocked locally which can control the market. If nothing is done, inflation rates will rise and a lot of projects will more likely not finish at the estimated time.
Mehmet Çelebi Remedial