The IPL just concluded its 'mega auction', and with ten franchises - with a limited purse - looking to pick up resources to compete for the title, there was plenty of economic undercurrent on display. I have written about some of that before. However, Omkar's casual question
raised an interesting prospect. In the auction (including retentions), there were a total of 10 Australian men's cricketers signed for a combined value of INR 50.6 crores (US$ 6.7 million).
How does it affect the Australian economy? On paper, that sounds like a trivial question - the amount is just 0.005% of the total economic output of Australia, so is it even worth seriously considering. But it's not quite a what-would-happen-if-a-snowball-hit-the-Titanic's-hull kind of question. Even as a microcosm, it's actually a useful lens to understand how services exports contribute to an economy. In the most basic model of measuring the total value of output of the goods and services in a country, there are three components that make up the entire economy - consumption (people buying goods - like a toothbrush, or cellphone, a car to drive themselves around, or an airplane ticket - for use now), investment (people buying goods - like a car to use as a cab, or a machine to print t-shirts - to make more goods or offer more services in the future), and exports (goods or services produced in the economy but sent to other countries). Professional cricketers belonging to one country (in our case, Australia) plying their trade in a professional cricket league in another country (India) would count in the third category. Service exports are sometimes called invisibles, because, while you can't quite see or touch them, they still make an economic impact. Globally, almost US$ 6 trillion worth of services are traded among countries each year. These can range from information technology services (like Infosys servicing foreign clients from India), to other professional services such as legal, medical etc. (although in many countries, including India, some of those professions are not allowed to offer those services outside their national borders).
As economies grow and develop, typically you can expect the share of services to go up in the total economic output (for example, around 30% of the Indian economy's GDP was made up of services in 1991, around the time of liberalisation, today it stands at around 60%), and countries can develop capabilities to deliver services to other countries at a competitive advantage (like India exporting IT support services because of a skilled, english-speaking and cheap labour force, or Australia offering to the IPL the skills of the likes of Pat Cummins, Glen Maxwell, David Warner, and Tim David, among others).
In the longer run, it might change the nature of an economy, and its structure, and while developed countries account for the most amount of service exports (80% of the total, according to an estimate by Deloitte) with the overseas players in the IPL (and some of its counterparts such as the Pakistan Super League, the Bangladesh Premier League and even the Lanka Premier League) representing a part of that flow, maybe we get to see it in the opposite direction (interestingly, the value of the Afghan players signed during the 2022 auction would represent 0.11% of the country's GDP) , if only a certain cricket board would look at it from point of view of, as Omkar puts it, the economic impact.
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