Johannesburg - Next year's Fifa World Cup tournament could be a "shocking waste of South Africa's resources" and will not present the economy with the bonanza that government and Fifa would have us believe.
This is the view of one of the world's top sports economists, Professor Stefan Szymanski, who is attached to the Cass Business School in London and co-author of the new book, Soccernomics.
He said South Africa will be hosting a bumper party for the world. As it is the host, everyone will love South Africa and South Africans will feel very good about themselves. But, as with any party, there is a cost attached.
Szymanski said what the tournament generates in revenue will not be enough to cover the costs. The biggest benefit will be the feel-good factor.
Various economic studies done in the past following large events like the Olympic Games and the World Cup have found that these events have had a very limited positive effect on the local economies. They could even have a negative impact.
Szymanski said the World Cup will also mean little for the South African tourism industry, with soccer fans merely replacing tourists that would normally come, but who now stay away because of the high cost of flights and accommodation.
South Africa is already one of the world's best-known tourism destinations and visitor numbers have swelled dramatically since the end of apartheid. The country has a very well-known and specific tourism niche - its natural beauty. The World Cup will do nothing to change this, Szymanski said.
The cost of staging the World Cup is estimated at R23bn. The actual agreement between Fifa and the South African government is confidential, but it appears that South Africa will have to pay for first-class flights and accommodation for Fifa's most important guests - which is a waste of limited resources, said Szymanski.
Although some South Africans will derive benefit from the tournament, they are in the minority and the government could've used the money much more effectively to help the economy, he argued.
For instance, billions are being spent on new stadiums and the surrounding infrastructure, while the money could be applied to other essentials.
Szymanski argued that South Africa is not a rich country and cannot afford to just throw this money away. The business model must change. Wealthy countries like France and Germany can afford to spend money on stadiums, but it's a huge expense for a developing country - as will also be for Brazil in 2014.
About 990 000 foreigners visited Germany during the 2006 tournament. The local organising committee showed an after-tax profit of €56.6m, thanks to good ticket sales and limited spending on stadiums - more than 60% of which were funded by clubs and the private sector. Fifa's profit in Germany was about €1.4bn.
The SA government is financing the lion's share of the 2010 stadiums.
- Sake24.com
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