How does the hosting of the world cup 2022 affect Qatars economy

How does the hosting of the world cup 2022 affect Qatars economy Introduction Qatar is the first nation within the Middle East region to be awarded the right to host the World Cup in the year 2022. The country had tagged the phrase â€Å"Expect Amazing† to their bid to host the prestigious tournament. The committee anticipates an estimated half a million visitors in the country during the tournament. This number represents a large percentage of the total population of the nation. The committee projects that the tournament will have a substantial impact on the economy of the country.Advertising We will write a custom research paper sample on How does the hosting of the world cup 2022 affect Qatar’s economy? specifically for you for only $16.05 $11/page Learn More In line with development within the nation, the authorities had set aside a whopping $100 million to improve on the infrastructure before the announcement was made that they would host the prestigious tournament (Willis 132). This amount is close to 90 percent of the gross domestic product (Willis 127). The money was set aside to be spent on various projects under the vision 2030 master plan that many people considered being ambitious. The announcement only stoked the flames of the spending plans by fast tracking the entire program, which was expected to be completed by the year 2022. The grand plan involves government expenditure of over $40 billion while the rest of the funding may come from other bodies such as Qatar petroleum (Willis 132). There are quite a number ambitious projects included in the grand plan mainly in sectors such as education, health transport, housing and tourism. There are also major plans to revamp and improve on the railway and metro transport systems with a whopping sum of around $25 billion (Willis 132). There is already progress in the construction of the first phase of the New Doha airport that is going to cost $10 billion (Fromherz 94). The plan is to replace the airport entirely in the long run. The country planned to launch the first phase of the airport for open use in less than two years. The later phases are planned for the next 15 years. The capacity of the airport is expected to increase tenfold with the number of passengers projected at 24 million annually in the beginning (Fromherz 97). The plan is to expand this number to around 50 million people annually. There are other substantial projects such as the $1 billion link for crossing to the modern airport, and the $7 billion seaport in the deep waters as well as other projects in the northern side of the city (Fromherz 99). The road network will see an injection of $20 billion for expansion as well as enhancements. The bridge projects dubbed the Qatar-Bahrain Friendship Bridge will also see a radical injection of $4 billion (Fromherz 99).Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Differences that h osting the World Cup can make in Qatar By hosting the World Cup, Qatar will feel the urgency through the provision of stiffer deadlines for the completion of the projects. This will play a crucial role in displaying the country’s ability to host the tournament. The authorities have already publicized the inauguration of 200 projects, which they aim to set off in diverse regions (Willis 132). The plans to set off the railway and metro systems are expected to have been finished by the time the World Cup is going to start (Fromherz 179). This is in a bid to cater for the huge influx of visitors expected in the region at the time of the tournament. The pace at which the Qatar-Bahrain road is being handled will have to be picked up, with more attention being focused on the project so that it will be completed much faster than anticipated. It may be pertinent to note that most of the projects that have been mentioned in this paper were already in place before the major announcement that the country was going to host the tournament. Moreover, the region will also gain from further funding and spending on projects that will be undertaken principally for the World Cup tournament. There are two main areas that the country will receive major boosts. These are the hospitality and the sports sectors (Willis 132). The blueprint for the tournament in the country has included 12 stadiums that will be ready for use by the year 2021. They include the expansion of three existing stadiums as well as nine modern structures that will be able to hold over 40,000 people each (Willis 132). The total cost upon the completion of the projects is estimated at around $4 billion. There are additional plans to construct around 100,000 additional boarding facilities as much as the required number is 65,000, which is the number according to FIFA (Chaddock 138). For sure, the subsequent shot in the arm for the economy of Qatar ought not to be taken too lightly. There has never been a mor e opportune moment than this one. There are several instances that can be referred to as coincidences, such as the nation achieving its target of 77 million LNG production tons per annum in the middle of pessimism, regarding the country’s capability of sustaining the increased growth, following the completion of gas related projects. Projections of an increase of 20 percent in the coming year brought about elation and roused feelings of joy among the people of Qatar. The International Monetary Fund focused these projections. The country is already the second leading recipient of foreign direct investment (FDI) after Saudi Arabia.Advertising We will write a custom research paper sample on How does the hosting of the world cup 2022 affect Qatar’s economy? specifically for you for only $16.05 $11/page Learn More The World Investment Report of 2010 from the United Nations Conference on Trade and Development (UNCTAD) indicates that last year alone, Qatar more than doubled the value of foreign direct investments it received. This was from $4.1 billion to a stunning $8.8 billion (Chaddock 205). Wonderful progress in the field of energy, especially in the production of gas was attributed to this increase. The awarding of the prestigious tournament to the country will definitely see an increase in the foreign direct investment in the region. Implications to the country The general spending plans of the country are set to bring about major development in the region. Aside from the fact that the general plans are already massive, the World Cup is set to bring about major changes to the nation. All this spending is aimed at benefiting the country massively. One of the main outcomes will be continued economic growth, which would result from the injection of funding into the economy. The country had recently seen a marked increase in the growth rate that had been brought about by the massive buildup in volumes within the division of h ydrocarbon, which was almost ending (Rahman 234). The ambitious plan to spend vast amounts of money in order to accommodate the upcoming tournament will steer the economy away from its dependence on hydrocarbons. Furthermore, the corporate world will get a significant role to play when there is a marked increase in the input of non-hydrocarbon associated undertakings. Because enhancements in the set-up had not kept at par with the hastened development of the populace or the economic structure, the region will also experience some sense of relief from the deficiencies and bottlenecks that have been piling up over the years through investments in the framework. Additional progress in the years to come may be stimulated by innovative investments. The most interesting aspect about this is that it augurs well for the plans in the country by the authorities to make it a center of attraction by improving the tourism sector. The financial subdivision in the country will experience remarkabl e ramifications through the spending program. Sectors such as investment and banking will be some of the key legatees. Quite a number of projects that have been sponsored by the authorities, which have been influential in assisting the banking sector to recuperate following recent global financial catastrophes.Advertising Looking for research paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Financial institutions will be assisted to increase revenues that they raise through increased business fee generating projects as well as the acme column development via sustained plans for the years yet to come. There is also the projection that some firms will go for initial public offerings in order to seek for funding from the public, resulting in bottomless stock market reserves. The result of all this will be a marked improvement in Qatar’s competitiveness and attempts to make it the financial hub in the region. Effects on the entire region The six member states signed a treaty or pact offering assurance to the Gulf Cooperation Council companies who are likely to chase up on emerging business prospects that may be brought about by this magnificent sporting activity. The treaty offers GCC companies operating rights to some of the most lucrative businesses in the region. The companies may operate branches in member states. The key resolution was implemented in Abu Dhabi summit of 2010 at the 31st conference (Chaddock 145). The region is sure to experience a dramatic and significant boost in intra-regional trade. The countries that surround Qatar are sure to provide raw materials that are not found in the region. This will in turn increase the economies. The main financial organizations will gain a lot from the activities that will be taking place since they will be financing, as well as servicing the superfluity of ventures brought about by the illustrious sporting activity. Caution to be taken when evaluating the impacts of the projects Several aspects in terms of risks have to be contemplated in pursuit of successful implementation of the projects. In the first place, the administrations finances will receive unwanted pressure due to planned spending, which brings about this risk in most cases. The rate at which the administration is borrowing from local financial institutions has steadily risen in recent years. It has also increased its issuance of bonds in a bid to raise money for implementation of projects. In addition, as it mostly happens, the money that is spent may overshoot the planned costs causing the definitive bill to be revised in an upward direction over years. Nevertheless, the steep climb in spending estimates may always be softened by an immense reserve in foreign assets as well as sturdy revenues from the hydrocarbon industry. One more consideration worth taking note of is the expensive inheritance assets, which will stay in the country following the finale of the World Cup. There are aspects such as the excessive number of hotel rooms that will be built (Chaddock 215). They will be oversupplied. Another aspect is the stadiums that will be left after the tournament. The 12 stadiums will be grossly underutilized since the country will not be able to maximize on them after the tournament. Conversely, the administration aims to get around this issue by disassembling them and offering less developed countries with the structures as gifts. In any case, the need to satisfy the world football governing body FIFA’s rules regarding the World Cup does not interfere with the amount of money that they intend to spend on the projects. Prospects about brought by the sporting event The plans that have been put in place, and the forever growing gas business, in accordance with reviews proffered by statistical departments in the sector, the gas reserves in the country are a whopping 25.5 trillion cubic meters (Fromherz 77). This is equivalent to almost 14% of the justified reserves in the world. There are reports from various quarters such as the International Monetary Fund, which indicate that the prospects for the country are looking up for the people. The economy is set to experience a rise. The rate at which the economy is expected to grow is around 20 percent in the coming year. This is assuming that there is no catastrophic pressure on inflation. There are projections of the inflation ra te sticking at around the bear minimal of 3 percent in situations that there is no rise in the prices of energy. From a wider perspective, the chance to change the economy of the country is here, and the administration ought not to let it pass them by. This is the opportune moment to turn the economy into a worldwide economy. The major dreams that the people of Qatar have had may be finally realized with the coming on of the World Cup in the country. It may act as one of the strongest facilitators that may catapult the economic status of Qatar into one of the strongest in the region and the world collectively. Conclusion It is pertinent to note that some of the key divisions that are set to make gains from the advent of the World Cup 2022 in Qatar include the hospitality, construction, and the banking industries, as well as the infrastructure. It is obvious that there will also be sizeable gains for the allied and service sectors, which offer backing, as well as accolade to the divi sions that have been named above. This is the right time for many businesses to set up their operations in the country so that they may take advantage of the upcoming situation. Sports events will always make a monumental impact on any nation that they are held. The Middle East is one of the areas where there has been a lot of apprehension regarding any events. This is due to many factors including climatic, historical, and religious reasons. With enhanced security in the region and the world as a whole. The World Cup is set to take off in 2022 in some of the most secure places in the world. Chaddock, David. Qatar: The Business Travelers’ Handbook, Northampton, MA: Interlink Books, 2003. Print. Fromherz, Allen. Qatar: A Modern History, London, England: I.B Tauris, 2011. Print. Rahman, Habibur. The Emergence of Qatar: The Turbulent Years, London, England: K. Paul, 2005. Print. Willis, Terry. Qatar: Enchantment of The World, Chicago, ILL: Children’s Press, 2004. Print.