Organisers for the upcoming F1 Grand Prix of Europe in Azerbaijan say its inaugural event is not under threat, despite a recent global drop in oil and gas prices sparking economic concerns.
Azerbaijan is gearing up to host its maiden F1 race in June this year around the streets of its capital city Baku, but it comes at a time when global prices in gas and oil – which it is economically dependent on – have slumped.
Indeed, though Azerbaijan economy has grown sharply in recent years on the back of rising prices, the drop has caused the local currency, the Manat, to devalue sharply, raising concerns that it could be forced to rein in public spending in an effort to stabilise it again.
However, though organisers for the Baku City Circuit acknowledge the financial outlay of staging an F1 event is sizeable, they play down the negative impact such an event would have on the economy, instead maintaining that the tourism and publicity benefits would be of benefit.
“The devaluation of the Manat will have no impact with regards to the staging of the first ever Formula 1 race in Azerbaijan,” a statement issued to Crash.net
said. “In fact, when the budget for the Grand Prix of Europe was approved, it was initially calculated in US dollars. As a result, we not expecting any changes to the current event budget.
“BCC shares the concerns of everyone at the current devaluation of our national currency. BCC also accepts that staging such a major event requires a significant financial outlay. However, we would once again stress that the overall economic impact - both short and long term, direct and indirect - created by staging an F1 race will be of huge benefit to the national economy.
“The impact of increased tourism and direct visitor spending that will be injected into Baku area business establishments such as restaurants, bars, hotels and retailers will see millions, if not more, pumped into the economy.
“Similarly, the hosting of the race itself will create thousands of jobs directly and indirectly linked to the event. We are confident that the staging of this race will not only play a major part in aiding the recovery in the short term but in driving the national economy forward for years to come, outweighing any existing concerns being levelled against the cost of staging it.”