Korea united? Just temporary for the Olympic Games

The 38th parallel that devides in two separate states Korea since the end of the World War II in 1945, is one of the most militarized and most sensitive area in the World. 

It has represented for decades one of the expression of the Cold War and it is now the line that divides the rich and capitalistic South by the "communist", dictatorship North.

The current Winter Olympic Games in South Korea, started few days ago, have seen the temporary reconciliation of the two Korea with a unified team under a new white flag. 

Moreover, we have seen the historical handshake between Moon Jae-in, the President of South Korean and Yo-jong, sister of Kim Jong-un.

handshake between the Moon Jae-in, President of South Korean and Yo-jong, sister of Kim Jong-un

I am not going to write that sport unifies people, or that the spirit of the Olympic Games wins over the divisions. This is a huge (probably the most important) sport event in the World and it attracts a lot of sponsors and investments. Business is business.

But still, North Korea is one of the most cryptic country in the World. And looking at people from that country, especially the sister of their dictator, participating in the most capitalistic event on the Planet, it is something that must be highlighted.

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Is it worth hosting a major sporting event?

Few days ago the 2014 World Cup has began in Sao Paolo in Brazil. It is estimated that the economical effort to build all the infrastructures for Word Cup and Olympic Games (that will take place again in Sao Paolo in 2016) will touch the amount of 33 billion US Dollars (24 bl Euros).

Such an expense for the organization of a sporting event is creating many protests from the population. Brazil is a country with wide economical disparities, an high crime rate and a large part of the population  (15%) under the poverty threshold.

Many Brazilians think that such a big amount of money should have been used to solve those problems and not for a sporting event. A recent poll has showed that just 35% of people think that World Cup can have a positive effect on the national economy.

So it is spontaneous wondering if hosting a major sporting event can be an economic advantage or a loss. To answer we can take a look at the history of past International Sport Events.

Just few years ago, for example, the State of Canada has run out the debit for the Olympic Games of Montreal, that took place in 1976. Athens 2004 was a fantastic show, but its cost, around 10 billion Euros, have speeded up the collapse of the economy. 

A research has estimated that for the London Olympic games in 2013 there have been an immediate retuns of 800 million Euros, 5 billion will come back before the end of 2015 with a 0.3-0.4% of GDP growth rate. Considering that the total cost have touched the 10 billion Euros, there will be probably many years to refund the debit. 

Barcelona 1992, instead, was a fantastic opportunity for the renovation of the imagine of the city, that has become one of the most attractive touristic city in the world. Also Turin has changed its international image after the XX Winter Olympic Games in 2006, at the price of 3 billion Euros. 

Panoramic of the costs of the most recent Olympic Games (www.tradingfloor.com)

It seems that hosting sportive events is not always a good investment. The returns are not enougth  to cover the costs, or they can do it on a very long period (30 years for Montreal...). Moreover, the structures built for those kinds of events are often not reutilezed anymore. It is, once again, the case of Athens, where the beautiful Olympic park has been left to the decay. 

Maybe, it is the moment to rethink to the organization of major sporting events, from one side to preserve the tradition and to the other to face to the current economic situation, unless we want to see these events taking place just in Dubai or similar places.

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