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Business in Brazil via FIFA World Cup 14 Anirudh D Ashish Bhagat Avit Viral Doshi Ayushi Todi Gaurav Dewan

FIFA economics Brazil

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Page 1: FIFA economics Brazil

Business in Brazil via FIFA World Cup 14

Anirudh DAshish BhagatAvit Viral Doshi

Ayushi TodiGaurav Dewan

Page 2: FIFA economics Brazil

Brazil was chosen as the host for WC 2014 on Oct

30, 2007

Page 3: FIFA economics Brazil

Opportunity Lost?

Page 4: FIFA economics Brazil

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

Page 5: FIFA economics Brazil

Infrastructure

• Brazil spent $ 14 billion on infrastructure and organization.

• Major infrastructure spending on –– Stadiums– Airports– Port and urban mobility

• Harbinger of expected future growth.

Page 6: FIFA economics Brazil

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 %

Page 7: FIFA economics Brazil

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

Page 8: FIFA economics Brazil

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

Page 9: FIFA economics Brazil

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

Page 10: FIFA economics Brazil

Domino effect

Page 11: FIFA economics Brazil

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

Page 12: FIFA economics Brazil

Risks• Intensified protests against huge spending

on infrastructure in a country which high poverty levels.

Page 13: FIFA economics Brazil

Risks• Stadiums and other infrastructure would

end up standing like white elephants

Page 14: FIFA economics Brazil

Risks• Fuelled inflation that may not end up with

World Cup

Page 15: FIFA economics Brazil

Challenges

• Corruption and mismanagement.• Accidents, delays and cost overruns.• Using new infrastructure to return to

growth trajectory.

Page 16: FIFA economics Brazil

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…

Page 17: FIFA economics Brazil

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.

Page 18: FIFA economics Brazil

Better luck next time …Brazil!!

Thank you