The Olympic Sochi acted as a driver for economic growth of the Krasnodar Territory

newsletter 05/06/2014

The XXII Olympic Winter Games in Sochi are closed. Russia has topped the non-official medal standings, won 13 gold, 11 silver and 9 bronze medals, that’s happened for the first time upon the breakup of the USSR. Besides, our country has broken the record of the 1988 Olympics in Calgary (Canada) on the total amount of awards, that time there were 29 medals of different kind got by sportsmen of our team.

In the 119th IOC session, held in 2007 in Guatemala, the Russian application for participation won by 4 votes and Sochi was selected as the host city for Winter Games. Along with that there were a lot of skeptical experts appeared, who pointed at that the Olympiad in subtropics is fated to failure. However, as we can see now, nothing of the kind happened. For the short term there were the Olympic Park erected in the resort town from the ground up, the mountain ski complex Krasnaya Polyana (Rosa Khutor) and transportation infrastructure of Sochi fully modernized.

Scale Olympic project was a driver for economic growth of the whole Krasnodar Territory, what can be observed through basic macroeconomic indicators.

So, in the years 2010-2013, in the most active building period, the gain in industrial production in the Krasnodar Territory average was 5,9%, while countrywide – 3,9% per annum. The year 2012 is especially representative in this context – that time the industrial production in Kuban increased by 8,1%, and in Russia by «modest» 2,6%.

economic growth of the Krasnodar Territory

Picture 1. Gain in industrial production in the RF and the Krasnodar Territory, for years 2010-2013, %

economic growth of the Krasnodar Territory

 Picture 2. Increase of investments to the fixed assets in the RF and the Krasnodar Territory, for years 2007-2012, %

Also similar situation was observed with the increase of investments to the fixed assets. If in the years 2007-2012 the investments have been rising country average by 6,7% annually, then in the Krasnodar Territory by 18,5%, by that the highest increase of investments was in 2010 – a record 41,5%.

One more fact, which represents the economic development of the Krasnodar Territory and Sochi in particular, is the cumulative turnover growth of companies, registered in the resort town. According to the data of the Information and analytical system Globas-i® of the Agency Credinform, total amount of companies, registered on the territory of Sochi and submitting reports on their financial and economic activity to the Rosstat, is 3 386. Cumulative turnover of these organizations for 2012 (the last available accounting period) went up by 45,9% to the level of the year 2011, in 2011 – by 24,9% in comparison with the year 2010, and in 2010 – by 34% compared with the year 2009.

The total expenditure value, which went towards preparation to the games, taking into account the investments for the development of the South of Russia, is difficult to estimate, Andrei Klepach, the Deputy Economic Development and Trade Minister of Russia, declared on the press-conference – they reach about 1,3-1,5 trillion RUB. And according to the data of the Bank of Russia, the effect from investments will make 0,3% of GDP growth at an annual rate.

We’ll hope, that all objects of the Olympics will play in the future an important role in the development of the domestic sports and will help our sportsmen prepare properly to next games, which will be held in PyeongChang, South Korea. Because just recently there were no one world-class sports complex for special kinds of sport on the territory of the country (bobsleigh/luge track, track for speed skating etc.). Now our teams needn’t to go abroad for in-season trainings. Also it may well be that the built infrastructure and media effect from the Olympiad will make more attractive the main place of resort of the country in the eyes of our nationals and foreign tourists.