“Hosting a world cup can best be understood as hosting a party, you don’t host a party to get rich. You do it to have fun, and Brazil will have fun. Yet there’s something obscene about hosting an extravagant party in a country where millions of people need houses, electricity, and doctors. That’s what bothered the protestors.” Kuper 2018
Whether or not a country should host a world cup is usually subject to intense debate in the media, among politicians and in academia. There are two arguments; on one side, the arguments are often that the event will be too expensive and that the potential for re-use of the facilities is insufficient to justify the construction of the costly venues. Those on the other side argue that the event would stimulate economic activity, increase export revenues(e.g., from tourism), create positive publicity for the country, and lead to economic growth and increased domestic and foreign investment levels.
This begs the question, ‘Why host such a costly event in the first place?’ Does the World Cup boost the host nation’s economy enough to justify the substantial costs and risks?
MoneyRise will answer these questions.
But before we go further, let us unpack what host countries spend money on.
The biggest expenditure comes in the form of civil construction and infrastructure, such as road and railway construction, improvement of airports, the building of convention centres and hotels, improvement of telecom systems, and attempts to revive poor areas.
To make sense of this, we will divide the structures into primary, secondary, and tertiary.
Building stadiums is important; FIFA requires the host to provide almost a dozen modern stadiums. Building new stadiums and upgrading old ones cost the hosts of the 2002 World Cup, Japan and South Korea, about US$6 billion, while Brazil spent more than 3.6 billion on world cup stadiums.
Hosting the world cup also affects the development of the secondary structure, particularly ‘housing.’ It is common that football villages are constructed for athletes, referees, and media representatives in connection to major multisport events. Additionally, the secondary structure covers the function of ‘recreation.’ Sports parks often accomplish the arrangement of several sports facilities within a city. These parks offer diverse, high-quality sports and cultural programs for prosperous spectators and spaces for ‘sports for all, recreational and leisure areas through parkland and service infrastructure around the facilities.
The tertiary structure covers all other elements necessary to stage large sports events, including the tourism structure. Tourists arrive at the airport or train station, stay in hotels, use public transportation and enjoy the city by night. Many cities have the tertiary structure necessary to stage single-sport events of ‘normal’ size. Mega events often require a renewal of the existing urban strategies.
Why do countries want to host the world cup if it costs so much?
It is all about soft power, baby.
Hosting a World Cup is an exercise in the projection of soft power. It gives the world a window into that country, showing how new infrastructure makes it a good place to invest or do business. It is a nation opening its arms and homes and saying to the world: “Eka’abo! You are welcome here.”
The increased awareness and image enhancement stemming from the event’s broad media coverage have proven to be a quality investment. This year’s World Cup is projected to be viewed by 5 billion people, and the Qatari government is hoping to utilise the world cup to articulate its quality business environment to the world; we can see reviews from visitors about the safe environment and beauty of Qatar.
Increased commercial activity
Hosting the world cup also improves the host country’s health systems, housing, public infrastructure, and employment opportunities. Qatar is understood to have spent over $200bn on this World Cup and its infrastructures like hotels and leisure facilities, overhauling its entire road network and constructing a rail system. With more than a million foreign visitors expected during the month-long tournament, a host country will see a tourism spike, increasing sales for hoteliers, restaurateurs, and the like. These well-publicised improvements often lead to the desirability of the host country for both short-term revenue growth and substantial community development, largely supported by residents.
Communitas is the sense of community created by members of the host country who come together around the event and as a source of national pride. This national pride has been the focus of several investigations and has shown that hosting mega-events increases communitas. For example, South African residents perceived increased national, and community pride leading up to the Games, and Koreans reported greater national pride after the World Cup. Residents have also reported greater levels of community cohesion, which engendered greater social capital (relationships and networks between individuals)
Now, let’s talk about the disadvantages of hosting the World Cup
The poor bear the brunt of it.
Poorer residents in host communities bear the burden of the beautification and revitalization associated with hosting the world cup. Let us talk about Brazil as an example. Some Brazilians were being ‘encouraged’ or forced to move from their residences to accommodate the fans ascending to Brazil. According to reports from the Economist, hundreds of thousands of people were relocated from favelas (i.e., Brazilian slums) throughout the country. Favelas were destroyed to build hotels, restaurants, parking lots, and other structures for WorldCup. Families living in the Favela do Metrô, next to the Maracana stadium, were evicted from their homes due to government-mandated forced eviction for unsuitable living conditions.
Brazil has one of the highest income inequality gaps in the world, which increases the questions about using public funds for these mega-events. Media reports indicated many Brazilians were concerned with how money was allocated for WorldCup and many felt that the money should have been used for better healthcare, transportation services, housing, and education.
Perhaps, a waste of money.
The World Cup stadiums in Brazil costs is estimated to be over $200 million each with no legacy plans. These stadiums might likely remain as white elephants that serve as a lasting mark of the mismanagement of funds and the social injustices that occurred to hosting the event.
According to the Guardian, only the Rio facilities had legacy plans as they were to be used for the 2016 Olympics. Alternatively, the remaining stadiums either offered too great a capacity for the team they hosted or had no post-event plans. Multiple reports claimed the stadium in Manaus was to be turned into a multimillion-dollar prison.
Other reports outlined how an architect provided designs that could turn the facility into housing for those displaced. This lack of planning adds credence to the people’s claim that money should have been spent on the people of Brazil. For instance, as reported, healthcare and education were at the forefront of the issues when the discussion of government spending was raised. One street vendor interviewed by the Guardian highlighted that while he loves the game of football and enjoyed the benefits of the visitors in terms of profits, he stated, ‘the money they spent hosting this tournament should have been better utilised.
At the end of the day, is it worth it?
The 2014 World Cup in Brazil lasted from 12th June 2014 through 13th July 2014. Events leading up to the World Cup had many countries questioning if Brazil could host the event. Before the event, publications warned international travellers about their journey to Brazil and what to expect.
As the World Cup kicked off, so did the celebrations and jubilee surrounding the football-crazed country. Headlines in Brazil and around the world focused on the spirit of the World Cup. When the Brazilian national team played, the people of Brazil would take off work to watch their countrymen in action. Every Brazilian city could perceive the atmosphere of camaraderie, and once the samba boys adorned the yellow and blue jersey, nothing else mattered but football.
Interesting as football is, the most worrying aspect of hosting the World cup, based on history, is the question of what happens after the show leaves town. More than ever, we’re now all too familiar with the dark side of the games. We’re familiar with corruption, bribery, infrastructural insufficiencies, and total and complete financial devastation.
Brazil’s most expensive stadium cost $215 million and is now a parking lot, and the country’s preparations for the World Cup cost an estimated $11-14 billion. The National Court of Auditors of Brazil concluded that public spending on the World Cup would be “enough money to pay the entire country’s annual Bolsa Familia [social welfare] bill twice over”. When measured against an expected economic impact of $3-13 billion, it’s hard to argue that taxpayers saw a fair return on their investment.
There also exists the argument for tourism, but findings reveal that when tourism increases, it doesn’t necessarily produce a Pareto gain because there is a spend associated with attracting visitors. Before the 2010 World Cup in South Africa, it was predicted that around 450,000 tourists would enter the country for the tournament. In the end, only two-thirds showed up. Despite the reduced numbers, visitor spend increased by almost a quarter, but at the cost of acquisition to the South African government of up to $13,000. For roughly the same amount, the country could have paid the wages of the entire working-age population for a week.
However, on the flip side, it doesn’t mean that hosting the world cup is completely pointless. Football brings the planet together. And it’s not completely fair to reduce hosting the world cup to mathematical numbers and investments. Tournaments have a feel-good factor, and inspiring stories of success can encourage children and adults to take up sport. To the average South African, nothing else mattered more than the fact that for a month, their country was the centre of the football world.
Conclusively, Qatar is hosting the most expensive World Cup in history, and the country is not focused on the cost of the event. Instead, it is using the World Cup to signal to the rest of the world that Qatar is open for business. And in the end, whether you think the World Cup is worth the expense comes down to whether your heart rules over your head.