Mega-events are mega expensive – this is nothing new. And while there are exhaustive lists of the high costs of preparing for the Olympics or the World Cup, there is also evidence that in some cases these are better understood not as the costs of a sporting event, but rather as massive development projects with a sporting event attached.

In my view, there is some validity to this argument. In Russia, for example, the 2018 World Cup is clearly being engaged to advance a development agenda particularly for regional cities. This is important in Russia because of the centralized nature of the funding structure: everything goes through Moscow, so unless you (as a regional or municipal administrator) have good enough connections to get noticed by the capital, you’re not likely to get the funding you need to deliver essential services. In this light, hosting the World Cup is a logical strategy to attract attention in order to secure funding. The struggle then shifts to finding a balance between satisfying the short-term needs of the event and fulfilling the longer-term needs of the citizens. This is not easy and I would argue that in too many cases the event wins out over the people.

Aside from this, though, there are bigger questions: is mega-event-led urban development the best strategy? Is it actually effective in developing regions? Are the benefits worth the costs?

FIFA’s ethics committee recently released a report about Russia’s winning World Cup bid. Most commentators were looking for evidence of bribery and corruption in securing the 2018 hosting rights, but at the moment I’m more interested in answering questions about strategic regional development. And the ethics report actually says a lot about this.

 

According to FIFA, the Russian bid cost over 20 million Swiss francs. Their exchange rate is too conservative, though. The winning bid was awarded in December 2010 and the previous year was spent in preparation. If you look at the historical CHF-RUB exchange rate for 2009-2010, you’ll see that 1:30 is a much fairer rate. So my calculations put the cost at approximately 26.2 million CHF (about 27 million USD at today’s exchange).

That’s 27 million dollars just on the bid. We’re not talking about infrastructure investments or debating the value of building stadiums instead of schools. This is merely 27 million dollars spent on writing the bid book, organizing FIFA visits, and mounting a PR campaign.

At the same time, the average pension in Russia is about $230 per month. (If you speak Russian, you can use this pension calculator to figure out how much you would earn if you were planning to retire in Russia). Also, individual purchasing power is falling, poverty is elevated and rising, and the overall economy isn’t doing so hot. In most cities, too many salaries are too low, and much critical infrastructure is in serious need of repair or replacement.

So this really is a question of priorities. In the context of this level of need, does it make sense to spend so many millions simply trying to win the right to host the World Cup? I think an urban development plan without the mega-event attached would lead to better outcomes, and I would argue that the Russian people deserve a lot better than what they’ve got now.