What Would YOU Do With $50 Billion?
As the Sochi Olympics have wrapped up and the Paralympic Games get underway, it gives everyone time to reflect on just what $50,000,000,000.00 can buy. (I know… I had to check all those zeroes closely to make sure I had the right number there… Fifty. Billion. Dollars.)
So what do you think? Was this a good way to spend $50 billion, or not?
I’ll tell you one thing- I’ve had a very hard time getting my head around just exactly how much is $50 billion dollars (€36,000,000,000). So I did a little calculating, just to get an idea of what you can buy with that much money.
To put it into perspective, it is more than the entire 2013 profit from the world’s largest corporation, ExxonMobil (“only” $44.9 billion).
It is more than the next 5 corporations’ profits… combined.
It is 5 times more than Ford Motor Company and General Motors made in 2012 put together.
After seeing that Facebook bought WhatsApp for something like $16-$19 billion, it sounds like a bargain. Facebook bought a whole company for 1/3 what Russia spent on a 17 day athletic event.
When thinking of extravagant spending, many people instinctively think of a hot car. Friends, look no more… This Lamborghini Veneno, at a mere $3.9 million, is the world’s most expensive car.
With $50 billion, you could buy one for all of your friends… oh wait, except for the fact that Lamborghini only made three. It seems we need to find other things to fill out the shopping cart to spend all this money.
It would have to be quite a wish list… I’m not sure I could find enough “stuff” to buy if I had to. (From all accounts, more than a few officials had no problem at all finding stuff to spend this money on.)
But enough about us, wasn’t the whole purpose of these Olympic Games to build economic strength for Russia, specifically to transform Sochi?
“After the Olympic Winter Games were awarded to Sochi in 2007, Russia’s president Vladimir Putin said of his country: “This is an acknowledgment of its growing capabilities, first and foremost in the economic and social spheres.“
The ongoing games, meant to celebrate a new, re-emerging Russia, are now testing these capabilities, sparking heavy criticism as the country faces new troubles, domestically and abroad.”
Why Host A Mega-Event Like The Olympics?
In August, 2008, the Economist highlighted the motivations for hosting the Olympic Games:
“When the Olympic ﬂame is lit, China will be hoping for a 17-day festival of sport and international friendship. It sees the games as marking not just its re-emergence as a global economic force but also as a country that the rest of the world treats with admiration and respect.”
Following the 2008 Olympic Games, researchers Robert Baade and Victor Matheson noted “the opening ceremonies of the 2008 Beijing Olympic games are estimated to have cost at least $100 million when around 100 million Chinese live on less than $1/day.” Apparently respect doesn’t come cheap!
They also estimated that for the 1996 Games, “the city of Atlanta and the state of Georgia spent $1.58 billion on the 1996 Olympics, which created 24,742 permanent jobs under their most optimistic scenario, or $63,860 per job.”
In a recent article, Salon interviewed researchers and authors of the new photographic retrospective, “The Olympic City,” Jon Pack and Gary Hustwit:
“So what’s next for Sochi? Russia poured $51 billion into revamping the beach town into a world-class ski resort, dwarfing previous games in both cost and scale — although at a terrible environmental price. The casualties of those efforts include rampant water pollution, thousands of displaced residents and an entire ecosystem arguably destroyed.
In about five years, Pack and Hustwit plan to go and see what happens for themselves, although they aren’t very optimistic about its prospects.”
“Once the 17-day extravaganza is over, the city must then attempt to find productive use of the dozens of venues it has built. These projects often cost hundreds-of-millions of dollars to construct, take up 10 to 20 acres of valuable urban real estate (frequently for decades), and cost tens-of-millions of dollars to maintain each year.
“… many of these former Olympic venues are scarcely used, as is the case with Beijing’s Bird’s Nest and Water Cube, or many of the venues built for the Athens games. The list of white elephants is long.” (www.theatlanticcities.com)
Given that many of the previous Olympic cities have derelict sites or under-utilized venues that the cities must maintain, did Vladimir Putin do Sochi a favor, will this gamble pay off in terms of social recognition? Or could this be another huge burden to try to maintain?
Put another way, could the admiration and respect that Russia desires be achieved by spending in any other way? Could Russia improve life for its citizens and gain a similar place on today’s world stage?
What Does Sochi Really Need?
Sochi has a population of some 350,000, although it is likely that this figure could be higher due to the construction for the Olympics and migrating workers that may elect to stay in the Krasnodar region due to increased opportunities. (if they can resolve issues of not actually getting their pay for work!)
With the money that has been spent on the Sochi Olympics, every man woman and child in the Krasnodar region could have received a cash gift of $100,000.
Every family could have been given a new apartment (flat), and a new Lada.
Let’s say that all the Olympic projects still got built, but at something close to the original bid prices without the accompanying graft and corruption. Putin still gets his Games, but the money siphoned off to build his and others’ dachas at Krasnaya Polyana goes to the improving of Sochi for the people. Novel idea perhaps?
Everyone has heard some version of the saying that if you give a man a fish, you feed him for a day, but if you teach a man to fish you feed him for a lifetime.
Giving the people of Sochi a bunch of cash might be exciting, but in the long-term it really doesn’t earn much respect or global admiration. Cool as it would be, it is like the striking of a match- gone in seconds.
What Would YOU Do With $50 billion?
Here are my thoughts (tell me what YOU would do, leave your comments below):
As a leader, I think it would have caused much more of a stir (especially in today’s world, and because being Russia, it would be totally unexpected), if President Putin had taken that money and invested it in improvements like this:
- $20 billion for the projects as planned (bid was $12bn, + allowance for revisions -but not graft- standard profit margins)
- $12 billion for 115,000 apartment/flats for those who have been moved, displaced or need homes (Of the 345,000 population in Sochi, assumes many are families with children; this means nearly all families, or at least the displaced and most needy, would get adequate housing, all with indoor plumbing and clean, drinkable running water).
- $5 billion for an additional power plant (one was included in the Olympic plan, but it doesn’t power the homes in Sochi and surrounding areas).
- $3 billion for (the following estimates are based real Business+International NGO partnership project successes in Azerbaijan [click the links for stories] updated for inflation, spread over the 90 post codes listed for Sochi):
- 100 schools build/rehab ($100 million); paint, windows, heat/cool, upgrade washrooms/toilets, add cafeteria/playgrounds according to need and custom;
- 100 orphanages rehab ($30 million); from my time in Baku, I know that orphanages are an important burden and can always use support, especially as crib standards have been upgraded for safety, lead paint can be an issue, and toys need to be refreshed often. Paying competitive wages and offering training to develop new qualified childcare workers serves to highlight the importance of this work which can increase morale and care levels;
- 100 Farms, new or upgraded equipment ($50 million); Sochi needs to replace the beet farms and processing facilities that were destroyed in the Olympic construction, upgrade farm cultivation/planting/harvesting equipment for existing farms and co-ops; develop new farms and develop extension agreements with agricultural universities in Moscow, France, Germany, Poland, the Netherlands, Azerbaijan, the United States, and other places with similar growing terrain/climate zones/research technology programs;
- 100 Fire & Rescue stations ($25 million); remembering the huge difference this made in Azerbaijan when new international trucks were received, I thought this would be a good thing to include on this list;
In Baku, we were always told not to rent any flat higher than the 9th floor as that was a far as the local trucks could reach with existing ladder units. Above that in a fire and you had no choice but to find your way down. I look at the new construction in Sochi and wonder if they have adequate fire & rescue units, or trained paramedic personnel?
- Books for 100 schools (class + library) ($25 million); when I worked out a project to bring cases of textbooks for schools in Baku we were able to make donations to 5 universities, 12 upper level schools and 9 primary schools. Lots of happy students;
- 10 state of the art specialty medical clinics ($100 million) rehab existing/build new;
- Additional 10 MGD water treatment facilities ($50 million);
- $1 billion city maintenance, landfill cleanup and other municipal obligations;
- the remainder, to be used for road repairs, park beautification, swimming facilities
rehab, etc. (NOTE: ‘etc.’ does not include reno work on personal dachas, just fyi!)
Ok, your turn. What about you? What would YOU do with $50 billion?
Interesting question, isn’t it?
I hope we get more opportunities to think about projects like these.
Even better, to perhaps volunteer for implement improvement project like these (like Naomi Hattaway is) and see the faces of people who are truly happy. Warm, fed, comfortable… happy.
Doesn’t everyone deserve a chance to live that dream?
Sources / Interesting Reads:
http://www.nbcolympics.com/video/today-extinguishing-flame http://www.rferl.org/content/serb-workers-sochi-olympic/25240405.html http://www.vanityfair.com/culture/2014/02/sochi-olympics-russia-corruption http://www.nber.org/papers/w14854.pdf?new_window=1 https://goodpoint.elc.polyu.edu.hk/print_list.php?mapid=2244 http://www.frbsf.org/economic-research/files/wp09-06bk.pdf http://www.theatlanticcities.com/politics/2012/07/why-hosting-olympics-bad-cities/2689/ http://www.theatlanticcities.com/politics/2014/02/sochis-sobering-day-after-now-what/8478/ http://www.salon.com/2014/02/23/sochis_bleak_future_what_happens_to_olympic_cities _after_the_olympics_are_over/ http://sigalonnewsviewsalt.soup.io/since/403713260?mode=own&shorten=330977 (http://azer.com/aiweb/categories/magazine/42_folder/42_articles/42_modernmath.html http://azer.com/aiweb/categories/magazine/83_folder/83_articles/83_agriculture.html http://edition.cnn.com/2014/02/21/sport/sochi-formula-one-winter-olympics-ecclestone-tilke-f1/index.html?hpt=hp_c3 http://nyti.ms/1k6j7RC