2010: Views on SA will change

Johannesburg - The global economic crisis should not prevent South Africa scoring a few economic goals with the 2010 World Cup soccer tournament.

There is little chance that a recession into 2010 and beyond would handicap South Africa and prevent it from deriving full benefit from the tournament, declared a panel of economic experts at a Gordon Institute of Business Science (GIBS) conference on Thursday.

It is indeed a fact that investment bank Lehman Bros bought $50m worth of advance tickets, said Julian Wentzel, head of research at Macquarie First South.

Lehman Bros was one of the first major casualties in the financial crisis when in September it was announced that it was collapsing. These tickets will now have to find new owners.

"The financial success of the tournament will not however depend on seats on spectators' chairs," Wentzel pointed out.

Even if this were the case, he reckons South Africa, because of its distance from most soccer tourists, is a relatively expensive destination and the country has thus inadvertently aimed for a higher income market. This is a big market, which will probably still be able to afford to come and watch soccer in South Africa, despite other segments of the tourism market feeling the pinch.

More than R600bn needs to be spent on infrastructure in preparation, and about 20% of this , Wentzel explains, will be on wages. This is a massive injection into South Africans' disposable income and ought to stabilise demand in the domestic economy in the years ahead.

The infrastructure being established will of course not return to Europe or South America with the spectators. The assets remain in South Africa.

According to Grant Hatch, vice-president of Gemini Consulting, it is not simply a question of stadiums and concrete pavilions. The country's ability to handle large numbers of tourists is being demonstrated at an elevated level and the tournament will serve as a good marketing opportunity for this know-how.

"The biggest legacy will be the telecommunications infrastructure that South Africa needs to establish for the tournament."

The world soccer federation, Fifa, set strict requirements for the quality of broadcast material. Fibreoptic networks need to be established and other improvements made. Hatch reckons that after 2010 this could make the country a strong competitor in the outsourcing market.

"When we are suddenly seen to have world-class infrastructure investors will regard South Africa in a new light."

- Sake24.com

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