Russia has spent $50 billion on the 2014 Winter Olympics which, according to NPR.com, is the most money spent in the history of the games.
That number — $50 billion — seems inconceivable.
To put it into perspective, in 2012 the United States’ Census Bureau reported the average American household income as $51,371.
It would take a combined income of more than 950,000 people to earn $50 billion.
That is more people than the population of Austin, Texas. So, where is all that money going?
Much of the money spent on the games goes to building athletic complexes and on improving public transportation and hotels, among other various expenses.
With that being said, there are people who are skeptical of where the money is going and if it is even going to benefit the country in the long run.
The Anti Corruption Foundation, an opposition group, has created an interactive map of construction projects, suspected embezzlement from “money siphoners” and facts about overspending.
One highlighted project is the road Adler-Krasnaya Polyana, which is the largest project, costing $8.7 billion with an overspending estimate of 1.9 times.
It is illustrated that, “The sum of overspending could buy each resident of Krasnodar Region [where Sochi is located] a new refrigerator.”
It is hypothesized that after the games, the “technical capacities” of the road will be excessive and no longer necessary.
Other facilities across the city of Sochi are in unfavorable condition.
Many journalists who arrived to Sochi early took to Twitter to show pictures of the displeasing state of their accommodations.
Journalist Shaun Walker of The Guardian tweeted, “Still waiting for “preparations” on hotel room to finish. Hoping they’re origami-folding toilet roll, rather than, say, putting the roof on.”
Despite where the money is going, the long-term effects of the spending of the games is uncertain, but there are examples that economists look back on.
The first is the Athens Summer Olympic Games of 2004.
According to Ari Shapiro’s Feb. 3, 2014 article, “The games are a great party, but not a great investment,” Athens spent $15 billion on hosting the games and it “contributed to the country’s enormous debt load, which sparked the current economic crisis and bailout.”
Most of the facilities are unused and now covered in graffiti.
Shapiro quotes Haris Zouroufidis, who is a resident of Athens, Greece: “Everything has broken apart and no one bothers to fix it.”
He continues, stating: “The water in the reflecting pool is dirty. All these expensive structures are just rotting before our eyes as time passes.”
With all this money that Russia is putting into hosting the games, will the country see any benefit? Russia has invested more than three times the amount that Greece did, and in return, Athens hasn’t seen anything but debt and ruins.
The second example is the London 2012 Summer Games.
According to the same article, it is still too soon to tell whether there have been any significant advantages or disadvantages to the city’s economy.
In the Feb. 3, 2014 article, “Did London get an economic boost from the 2012 Olympics?” by Ari Shapiro, he interviews London economist Max Nathan on the London games.
He speaks of the slight increase in jobs and development in parts of the city, such as East London, that were developed more quickly than they would have if the games weren’t in town.
Shapiro quotes Nathan, stating: “Is all of that worth the $15 billion price tag? It will be years before we can see that.”
Hosting the Olympic Games has the potential to bring prosperity to the host country, given that the country invests its money wisely.
The cost or benefit will be inconclusive for years after the Games end. All that is left to do is wait and see.
Rebecca Morris junior public relations major and managing editor of the Cardinal and Cream.
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To see the interactive financial chart on this topic, visit http://sochi.fbk.info/en/