How Much Money Did South Africa Make From The 2010 World Cup
Every bit the soccer world descends on Brazil for the 2014 World Cup this week, disillusionment over the last tournament nonetheless lingers in South Africa.
The 2010 World Cup additional tourism and national pride, simply information technology's clear the economical benefits failed to live upward to the hype and came at a very high price. Many now come across Africa's offset ever World Cup as a squandered opportunity.
"At that place'south certainly been a do good -- simply at what cost?" said Johan Fourie, an economics professor at Stellenbosch University in South Africa.
There is aplenty research that suggests the bear upon of pricey sporting events tends to be brief and limited for host countries, with few exceptions such as the 2000 Summer Olympics in Sydney. The 2010 World Loving cup did little to disrupt that notion.
Related: Why cities do NOT desire to host the Olympics
Pricey tourism lure: According to estimates, S Africa shelled out almost $3.9 billion on the 2010 games, including $one.3 billion in stadium structure costs alone.
Information technology'southward notoriously difficult to determine simply how beneficial major sporting events are on local economies, simply one key ingredient is the ability to attract rich tourists from other countries.
Related: Meet the World Cup'southward x biggest stars
One research newspaper published in the Journal of African Economies calculates that S Africa attracted about 220,000 extra tourists from countries outside southern Africa during the 2010 Earth Loving cup and 300,000 over the entire year.
That'south means the land spent a whopping $xiii,000 per visitor, the paper said.
The researchers concluded that hosting mega sports events is a "potentially successful withal hugely expensive strategy to develop tourism in developing countries."
Notwithstanding, Fourie said South Africa has seen a fasten in tourism in the years since the World Cup, especially visitors from Latin American soccer hot spots like Argentina and Brazil.
Revamped infrastructure remains: Of form, hosting major sporting events is about more than merely driving tourism.
Some of the coin spent on the 2010 World Cup went into infrastructure projects aimed at meeting demand for the games, increasing strange investment and improving the lives of S Africans.
That includes a country-of-the-art runway system, renovations to major airports and highway improvements.
Related: Americans finally want Globe Cup tickets
"It's all because of the World Cup," said Fourie. "The Globe Cup is very proficient at creating a deadline for infrastructure spending that might take occurred just only in the medium to long term."
Mark Clark, a business professor at American University, said South Africa has not been able to concenter as much business investment every bit information technology hoped.
"While some measures there were a success, South Africa doesn't seem to have leveraged the Globe Loving cup to the extent they could have," said Clark, who pointed to underutilized infrastructure like stadiums without anchor tenants.
The pride gene: Despite the difficulty of translating major events into sustainable economic growth, countries continue to vie for the right to host spectacles like the Globe Cup and Olympics. That may be partially due to less visible benefits like generating national pride and improving a state's standing in the world.
"I loved being in that location during the Globe Cup every bit Southward Africans came together and were proud. Yous could feel the excitement," said Mike Diamondis, who was born in South Africa and currently lives and works in Angola.
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And nonetheless South Africa'south economic system has non been able to overcome its structural problems -- earlier or after the World Cup -- including income inequality that has triggered labor strikes in the country's big mining sector.
While its stock market place has near doubled since June 2010, South Africa'southward GDP has slowed and even slipped into negative territory during the first quarter of this year.
The World Cup "created a wave and an opportunity for u.s. to capitalize on," said Diamondis. "Over the years I believe nosotros lost the momentum. Nosotros just went back to being a nation dealing with then many problems, and we haven't found solutions yet, even if the World Cup did bring some excitement."
Information technology could have been worse: It may be little condolement to S Africans, just the land was able to avoid many of the negative outcomes that some worried would occur.
The World Cup itself largely went off without a hitch. All stadiums were completed on fourth dimension, social unrest didn't disrupt any games, and at that place was no violence or terrorist attack that would take spooked potential investors and tourists watching on Television set.
While growth has slowed down, South Africa's economy isn't dealing with asset or credit bubbles that accept followed similar mega events.
"That was a real fear at the time," said Ludovic Subran, primary economist at Euler Hermes.
The same tin't be said for Brazil, which is grappling with spiking inflation and a possible real manor chimera. While the state is a hotbed for all things soccer, opposition to hosting the World Cup has mounted and organizers have been faced with riots among the issue's $fourteen billion price tag.
"I think the risk of social unrest post-World Cup considering of a lack of chore creation and inflation are massive," said Subran.
So it could exist worse Due south Africa. The land could exist hosting the 2014 Globe Loving cup.
Source: http://money.cnn.com/2014/06/09/investing/world-cup-south-africa-brazil/
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