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Azerbaijan: whether to spend money on “Formula 1”?

Азербайджан: стоит ли тратить деньги на "Формулу-1"?

Car racing are not sports popular in Azerbaijan. Judo, Boxing and chess cause there is much more interest.

But when the end of the 1990s, the country began to receive large revenues from oil exports, the authorities have decided to enter the world stage through sport.

Acting as sponsor and athletic club “Madrid”, Azerbaijan hosted last year the first European games.

It was also announced that the plan for the race the European Grand Prix “Formula-1” in the capital of Azerbaijan. Part of the route of the races will be held along the waterfront in Baku.

But since then oil prices collapsed and the economy began to stagnate. Now the Azeris are wondering: is it really necessary them this race?

Usually the cost of organizing such races receiving side and are financed by public funds.

The race organizers in Baku had no immediate comment on future expenses, stating that they are counting on the income from ticket sales and sponsorship.

“Of course, the promoter of racing Baku City Circuit recognizes that the organization of such a large event requires significant financial expenses, – said the representative of the organizer of the championship company BCC. – However, we believe that the overall impact of the championship on the economy – short term and long term, direct and indirect – will be very positive.”

There is another reason why it is difficult to assess the ultimate magnitude of these costs. The rate of the manat, Azerbaijan’s currency, in the last year is unstable.

The decision to conduct in Azerbaijan the Grand Prix “Formula-1” was made two years ago, when oil was 120 dollars per barrel and the rate of the manat to the dollar was 1:1,27. And now the price of oil fell to $ 30 per barrel, and the manat is worth 62 cents.

Азербайджан: стоит ли тратить деньги на "Формулу-1"?Image copyrightGetty

Image captionИз the fluctuations in the exchange rate of manat total expenditure on the conduct of the competition remains unclear

In fact, when signing the contract for conducting of races the Azerbaijan undertook to pay 27 million manats a year, and now he’s paying 55 million manat per year.

This will lead to the fact that 340 million previously allocated in the budget for sporting events will end much sooner than anticipated.

Experts indicate that the Charter of racing, “Formula 1” includes the provision that the amount annually paid by the racing promoter of the company, increases by 10% per year. In the first year it amounted to 34 million dollars, next year it will amount to 37 million dollars and so on.

What the locals say

In Azerbaijan remember the success of the country in the Eurovision song contest in 2012 and European games in 2015, who secured the country’s place on the sports map of the world.

“Of course, I would like to race took place. They will be our window to the world”, – says the resident of Baku.

However, a growing chorus of voices of those who warned that the increased costs of holding large sporting events could be unsustainable for the country.

“These races don’t need one. It’s an unnecessary expense, especially with the recent price increases,” says another inhabitant of Baku.

“We could spend this money on opening a new plant, training for the unemployed, preparing them for work,” the other echoed him.

Never happened before: even in a country where people are traditionally reluctant to share their opinions aloud, the issue of the high cost of the sport causes some to Express their protest.

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