fifa economics brazil
DESCRIPTION
How FIFA affected businessTRANSCRIPT
Business in Brazil via FIFA World Cup 14
Anirudh DAshish BhagatAvit Viral Doshi
Ayushi TodiGaurav Dewan
Brazil was chosen as the host for WC 2014 on Oct
30, 2007
Opportunity Lost?
Bright Future!!
2013.5 2014 2014.5 2015 2015.5 2016 2016.50
0.5
1
1.5
2
2.5
3
3.5
GDP growth %
GDP growth %
*As forecasted by World Bank
Infrastructure
• Brazil spent $ 14 billion on infrastructure and organization.
• Major infrastructure spending on –– Stadiums– Airports– Port and urban mobility
• Harbinger of expected future growth.
Stadiums
$3.6 billion spent on 12 new and refurbished stadiums across 5 cities
Boosted core sectors like steel, cement and power
Plan to spend 25% on stadium and 75 % on other projects like transport, security and communication failed.
Cost overrun by 75 %
Transportation
Transportation development generated long term benefits
Introduction of monorail, metro and expansion in airport handling capacity
Many projects were scrapped due to delays and cost overrun
Only 36 of planned major 93 projects completed
Tourism and Hospitality
Brazil attracted 6,00,000 tourists during the world cup from more than 180 countries.
62 % visited country for the first time
Generated more than 15 per cent of the 4.8m jobs created during the nearly four-year-long administration of president Dilma Rousseff
Opportunity for tourism sector to convert one time visitors to frequent visitors
Food and beverage
$1 billion boost to food and beverage industry
Industry set to explore “Fan Parks” concept of selling drinks and fast food
Boost may be temporary in nature.
Food prices artificially jacked up
Domino effect
Domino effect• The domino effect of direct actions can be
clearly seen as a series of economic, social and cultural developments.
• Interconnected nature of economics leads to intermediate spending.
• Opportunities for other exporting nations.• HSBC business expectation index moved
to 73.3 in July, 2014 from 52.2 in 2013.• Brazil’s win in world cup would have
sustained the Domino effect
Risks• Intensified protests against huge spending
on infrastructure in a country which high poverty levels.
Risks• Stadiums and other infrastructure would
end up standing like white elephants
Risks• Fuelled inflation that may not end up with
World Cup
Challenges
• Corruption and mismanagement.• Accidents, delays and cost overruns.• Using new infrastructure to return to
growth trajectory.
Opportunities
• Improving standard of living• Using tourism industry for long term benefits.• High quality sports development program
The World Cup has put an end to Brazil’s five-year stagnant foreign tourist inflow, from current 5 million to 7.48 million until 2014 and 8.95 million in 2018…
Is it a success story?
Since 1974 winners outperformed markets for the month following the finals.
Even host nations outperformed even after losing the world cup
Businessmen and corporate flock to such events.
Sombre mood of fans can leads to reduced investor confidence.
Better luck next time …Brazil!!
Thank you