The textile sector is expected to expand with the country hosting such a big event. The increased visitors from foreign lands are being seen as a factor that would lead to huge profits for textiles. The brand Brazil will gain from the World Cup, which would mean that the country's textiles will reap the benefits. The most optimistic development that has made many textile companies from around the world invest in Brazil's textile sector is the improvement in the overall infrastructure of the country. In order to host the World Cup, Brazil has spent approximately US $52 billion. This investment has ensured that the infrastructure that encompasses roads and highways, airports, and the expansion of electricity and telecommunications networks, is developed in accordance with international standards. Prior to the 2016 Olympic Games, an additional investment of US $11 billion has been earmarked for infrastructural development. This investment will get rid of any infrastructural deficiencies that the country has. The proponents, especially those proposing to invest in textile industries, hugely depend on the superior infrastructure to ensure the smooth functioning of the overall business. It is pertinent to note that what has been constructed in view of the event will stay even after the event is over. In such a scenario, it is welcome news for the investors that the games have resulted in improved transportation and a smooth supply of power.
Textile companies from India, New Zealand, etc., have shown keen interest in setting up subsidiaries in Brazil in view of the upcoming major events. It is vital for countries like India and New Zealand that are expanding their textile business in Brazil to carve a niche for themselves during the month-long event. Making their presence known might not be a piece of cake for the countries competing to establish their textile brands in Brazil, as the competition would be definitely cutthroat with a large number of countries involved. The situation for the local garment shops would be different. The FIFA involves 204 countries, and with visitors coming from these countries, the local garment shops and manufacturers can look forward to grabbing a small chunk of a big pie.
Permanent and lasting development could emerge in several textile markets, as with the World Cup, there's an opportunity to lift international trade, making the country's textile companies and brands global. The bigwigs in the Brazilian textile sector are also looking forward to training the workforce in the English language, which can mean improved productivity of the workforce and this will lead to significantly higher wages, as not many workers can speak English. If the delegates from other countries are gratified with the textile business, it would mean advertising Brazil's textile in other countries and thus creating a strong demand.
As per a study by Brazil Sustainable Socioeconomic Impacts of the World Cup in 2014, prepared by Ernst & Young in collaboration with Fundacao Getulio Vargas (FGV) it is anticipated that the sectors that include micro, small and medium companies, such as textiles will directly or indirectly be able to generate almost $ 15 billion with the event. The Brazil's middle class which is encouraged to spend rather than save together with the visitors from affluent countries will ensure that the luxury textile brands register impressive sales during the event. These sale figures would likely encourage other textile brands to explore business prospects in Brazil.
Nevertheless, this optimistic picture has not been accepted by all. As per a report presented by Moody's Investors Service, it has been argued that the economic high which the textile sector will experience following FIFA World Cup will not last long. The influence of the event would be fleeting for textile sector. The global economy is recovering from recession and after registering a growth of 6.1 percent in 2007, when Brazil was declared as FIFA World Cup host, there's a fat chance that the country's economy might be on the verge of a recession. Another perspective that has led to concerns of global business community is that the situation in Brazil is not peaceful, which would deter the textile companies from outside to invest in the country. The lost workdays will do away the profits earned by momentary sales of clothing. Moreover, there is a strong demand for World Cup merchandise like t-shirts, caps, shorts, socks etc. but Asian countries including Vietnam, Bangladesh, Thailand and China are giving tough competition to Brazil's local textile manufacturers, which indicates that Brazil's textile needs to be strong.
These apprehensions are offset by the fact that the World Cup is a gigantic and rare sporting event that offers a great deal of global media exposure, which will result in long term benefits for the country. Brazil's textile sector is already among the best in the world and this exposure can further enhance this segment of business. Also among the ones that would do good amid the momentary profits include the garment sector sponsor of the event, i.e. Adidas.
Though it is difficult to measure the exact economic impacts of a large sports event, it is for sure that the textile sector will definitely rise with FIFA World Cup. Fresh investments in textiles, creation of new jobs, improved movement of exports and imports and giving an identity to Brazil, are just some of the constructive results of World Cup 2014. After all the FIFA World Cup events have had huge global impact on business in past as well and there seems to be a happy surprise in store for Brazilian textile with start of the tournament.
References:
1. Nzembassy.com
2. Wikipedia.com
3. Apparelresources.com
4. Globalconnections.hsbc.com
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