Hosting a Formula One race in the capital of Hanoi in 2020 will bring both opportunities and challenges for Vietnam’s economic development, Nguoi Lao Dong newspaper reported, citing an expert speaking at the workshop “Business is Great.”

The zoning map of the F1 circuit which will be built in Hanoi's Nam Tu Liem District. The upcoming race is expected to not only bring multiple opportunities to the country but also create major challenges

At the workshop held by the British Embassy and the British Business Group Vietnam in Hanoi City on March 26, Associate Professor Dr Nguyen Duc Thanh, director of the Vietnam Institute for Economic and Policy Research (VEPR), analyzed possible impacts of the upcoming race, the Vietnam Grand Prix, on the country’s economy.

Thanh noted that the hosting of the F1 race, the latest international event to be held in Vietnam, would further enhance the country’s image; introduce and popularize Vietnamese brands and products to the international community; and open the door for the exchange of culture, economy and business with foreign markets.

Apart from this, the city will add extra revenue to its budget.

The event is expected to draw domestic and international tourists, promoting the tourism sector of the city and neighboring provinces, and benefiting airlines due to the higher travel demand during the event.

In addition, the need for transport and accommodation services would also rise sharply during the event, which is beneficial to the city and neighboring localities.

The F1 race will stimulate new investment for repairing and upgrading roads to be used for the racetrack, related roads and amenities. Aside from boosting the development of broadcasting, advertising and telecom services, hosting the race will help local firms and Vietnam-based enterprises introduce their products to potential international partners and seize cooperation opportunities.

However, Thanh said that the organization of the F1 race may involve risks for economic development, including seeing a smaller audience than expected or inadequate preparations in terms of infrastructure and services.

Moreover, the revenue from the event would be insufficient for recovering the investment if domestic firms cannot meet the demand for products and services, resulting in heavy dependence on foreign firms or imports.

As the event is expected to not only bring multiple benefits to the country and be a playground for sporting fans but also create major challenges, Thanh suggested calculating spending more carefully to ensure profitability.

SGT