Unaffordable extravagance
Fin24

Unaffordable extravagance

2010-06-08 23:27

THERE's a palpable sense of euphoria over the 2010 FIFA World Cup, which kicks off this week. But this euphoria fades fast when you realise that many dreams and hopes attached to the World Cup are far removed from reality  – and I'm not talking about which team you're supporting.

In a nutshell, the World Cup was supposed to generate major short-term economic benefits in the form of growth and jobs, while also creating longer-term investment opportunities. The argument is that foreigners will see what a wonderful country SA is and want to invest substantially in this country.

Much has already been written about how short-term benefits for growth from the Cup have been overstated. Cadiz, specifically, has argued that soccer spectators aren't big spenders and that the addition to retail spending from them will be miniscule. It is sceptical about the forecast that the World Cup's effect on gross domestic product growth this year will be 0.5% - a sizeable figure considering that overall growth is expected at about 3%.

The Grant Thornton analysis – if one can call it that – has to be taken with a pinch of salt. For instance, one finds this intriguing paragraph in regard with establishing how many jobs the World Cup created: "The number of annual jobs sustained in total is 695 000.

"Of these, 280 000 annual jobs will be sustained in 2010 and 174 000 by the net additional economic activity this year. This is an economic measure of equivalent annual jobs sustained by this amount of economic activity, and not new jobs created."

What on earth does this mean? Over what period have the World Cup jobs been "sustained" and how many new jobs have been created? Grant Thornton can't tell us, hoping instead that journalists will use 695 000 in their headlines.

The stark truth is that, in a country with SA's poverty, the money spent on building stadiums could have been better spent elsewhere. Just watch the news. A striking example is the open toilets next to the dirt roads in Khayelitsha.

Rainbow nation dream comes crashing down

The real meaning of the World Cup was made clear to me when Cape Town mayor Dan Plato said on e-TV news that he was removing the open toilets because he didn't want this kind of footage to be beamed across the world. The whole issue is an example of the rainbow nation dream which underpins the World Cup crashing down. Amazingly, the toilets were removed.

Plato, who is from the Democratic Alliance (DA), decided to remove them after ANC Youth League (ANCYL) members led the charge in tearing down the tin shelters erected around the open toilets in recent days. The ANCYL is demanding that concrete shelters be built.

Plato's only worry seems to be for the BBC and CNN not to film the open toilets, but the dispute might well make international news.

The point is that we are trying to portray a country that doesn't exist. The fact is that those open toilets have been in Khayelitsha for months, and that the tin shelters were a recent development – probably prompted by the looming soccer spectacular.

The ANCYL is obviously wrong in breaking the tin shelters down. But that doesn't excuse the fact that there were open toilets in the first place.

I don't know how much the Cape Town municipality spent on the World Cup. Grant Thornton says cities and provinces spent a total of R9bn. But if the city of Cape Town can afford a world class stadium, surely it can afford closed-off toilets? Which would you rather have, if you were a resident of Makhaza in Khayelitsha?

Proper sewerage vs state-of-the-art stadiums

I mention this as one example of the extreme poverty in this country that exists just kilometres away from these wonderful stadiums. In the February Budget, it was disclosed that government had spent about R33bn in preparation for the tournament. This doesn't include spending such as the Gautrain and the freeway improvement projects, which aren't directly related to the World Cup.

The DA recently leaked the government's Green Drop report on the country's sewerage infrastructure, which government had hoped to keep quiet. The findings were scary, with the report finding that 55% of municipalities' sewerage facilities were "inadequate".

Only 7% were rated as excellent. Even worse, the actual level of non-compliance is likely to be higher, as only 53% of the country's 852 treatment plants were assessed in the Green Drop report. Many simply didn't reply. The backlog in sewerage infrastructure is R23bn – which could have been covered by the money spent on building beautiful stadiums.

You may wonder why I'm spending so much time talking about toilets. The point is, SA hasn't even got the basics right and yet thinks it's great to spend massive amounts of money on a soccer spectacular. There's also the R75bn backlog in roads and R27bn backlog in electricity distribution infrastructure.

One point that should spoil the euphoria about the World Cup is the fact that foreign journalists aren't stupid – they'll find the poverty and portray it to the world. No matter that beggars have apparently been removed from Durban's streets (and put where, I wonder?). The British Financial Times this week ran a story based on Durban with the headline: Poor cry foul over World Cup in Durban.

The SA that Cup supporters want to portray exists only in dreams and television commercials. Booking our place in history indeed – but not in the way that you think.

- Fin24.com      

Comments
  • Anarchist - 2010-06-09 07:32

    Replace the words "Cape Town Municipality" with "Cape Town Ratepayers" - it better helps to understand sentiment.

  • Roman - 2010-06-09 07:35

    All through history a failing government would keep the masses busy and happy by giving them games to act as a distraction.Take the ancient Romans as a prime example shortly before the fall of that empire.Same thing happening here in RSA. To me this is exactly the same as the government admitting that it has failed by trying to distract the masses into the hype of games, more time off from work and in general just doing their very best to keep the focus away from the harsh reality that is the failed state.

  • BM Noris - 2010-06-09 07:36

    Your words echo the thoughts of a multitude of South Africsns who consider that our National priorities are badly warped.

  • DirkM - 2010-06-09 07:51

    Greta, I have always enjoyed reading your articles, well balanced as they are. This one, however, has simply dropped the ice over the my warm fuzzy feelings. As they say in Afrikaans, "Ek het nou 'n gly gekry in jou". Everybody understands that there is poverty. Everybody understands that there are priorities as to money expenditure. But you of all people should know that you never put all your eggs in noe basket. Should the government stop spending on *everything* and focus on poverty instead? Should we stop the progress of our country to help the poor first. Think a moment without your heart, but with your brain. If our country focuses solely on the poor then SA will fall even further behind the rest of the world. It will bring down the living standard of everyone, not just increase the standard of the poor. Don't get me wrong... I strongly believe that we should prioritize the poor, our infrastructure and municipalities, etc. But that does not mean that we as SA should also not spend money on things that benefit us in other ways, and uplift the country and the morale of its people. Surely you do not spend all your salary on debt? Surely you also go to the movies, eat out once in a while? How is that any different, albeit on a much smaller scale?

  • Mzu - 2010-06-09 08:02

    So what should we do...cancel the World Cup?

  • Allan - 2010-06-09 08:30

    So true....unfortunately you and this article will be branded as patriotic in the least. The whole World Cup operation in SA is simply an ego trip for the soccer bosses like Jordaan and Khoza. When they could not get the Cup extravaganza in 2006 they childishly threw a tantrum and coerced a lame Blatter into ensuring the next World Cup bash would be handed to South Africa.The result is that the entire country has to pay for their personal egotism and enrichment. All in the name of Africa....!

  • Fouché - 2010-06-09 08:33

    Can't agree more. And they want us to be excited....

  • Director - 2010-06-09 08:39

    I'm actually wondering why you do so much politics in the financial section of the news? Know this. Check it out. Since the ANC took power, not a single thing has gone right. Eskom is having black outs, claiming maintenance needs to take place. Does it? Sewerage infrastructures are not upgraded. Never been, even though the countries population is growing. There is sadly, not a single thing that goverment has done to make the everyday lives of SA citizens, bearable. Now there are talks that we will be facing a water shortage in the future... Ask yourself this, do you want to live like this, or do you want someone that does not offer you empty promises?

  • ARI - 2010-06-09 08:49

    EXCELLENT ARTICLE

  • Kenko - 2010-06-09 09:24

    Just one question: Were the open toilets built like that from the start? Who in their right mind would plonk down a toilet and let the world see people doing their business? My guess is they were closed off with corrugated iron, which was then STOLEN by the same people who lived there. In the end they were the ones responsible for losing their privacy.

  • costa - 2010-06-09 10:21

    very intersting and eye opening article. do we have a similla article written for the cricket and rugby world cups we recently hosted?

  • ir8m8 - 2010-06-09 10:29

    Stunning, brilliant and factual, but at this stage your article will come accross as more sensationalistic than factual, these sorts of stories should have hit headlines in 2003/4 when the "beutiful game" was awarded to SA...one thing you did not mention is the profit that Fifa will be making out of this and the fact that the impact to the GDP this year, is on estmated at around 0.3%. Fifa having its origins in a 1st world country and getting labour and facilities rather cheap (in comparison) should donate some of its profits back to the community coffers. I am also particularly interested as to how the tenders were awarded and to see who personally benefits from the "stadia". I will put money on it that it will end up being the "usual suspects"

  • Nasdaq7 - 2010-06-09 11:20

    Giving stuff away for free - doesnt create self-reliance and jobs.

  • Ben - 2010-06-09 11:32

    Economist Adam Jacobs stated SEVERAL years ago before "extravagance" in building non-productive stadiums etc using borrowed money, that it would severely damage RSA's economy. Please proof me wrong: At that stage and until recently everyone in the Media24 environment just referred to all the so-called benefits of huge numbers of tourists. That was fiction if not blatant lies all along also coming from FIFA, ANC government, the local press etc. Even now that FIFA is effectively making the rules in RSA (e.g. no protest allowed during farm murderer' bail application, actively promoting ANC Peter Mokaba (original version "kill the boer" instigator) we read very little about this. What a reason for national shame - nothing to be proad of! RSA are being used and then discarded by FIFA. RSA acts like a 'willing lady of the night' - not even paid for being stupid. FIFA being one of the most notorious pocket-filling organisations acting against the interest of local populations. Everytime leaving the dumb countries with huge debt burdens while they leave and go on living in extravagance - this time at poor hardworking citizens of RSA's cost. Did Fin24 have the insight about all the destructive "extravagance" then? If yes - why did you not exposed this farce in time? Not even productivity losses loss of school time etc prevent BUSA and like minded short sighted people to victimise employees to buy and wear Bafana jerseys etc. It reminds one of what happened when RSA was led into the early 1990 referendum trap to hand over to ANC - and handover ESKOM, road withou potholes etc to be destroyed . . . Shame on every succer driving around as if we should be proud about feeding disgraceful "extravagance". Please do some investigative journalism and expose all the corruption and disgraceful conduct behind this. The cost to RSA can be much more than the so-called weapon scandal with it mutual corrupt relationships.

  • Horses mouth - 2010-06-09 12:20

    Wow you're a buzzkill. Ever thought about the long term benefits as opposed to short term considerations, building the masses through development which is only sustainable through overseas investment and all that other drivel. Sure, the stadiums were a bit much but maybe they can fill people with some pride in their country to at least slow the brain drain. Talk about trying to cash in sensationalism in an article. Poor.

  • Disappointed - 2010-06-09 12:51

    We live in Africa. We all know we live in Africa. Tourists coming here are aware that they are coming to Africa. I agree with you (of course) on the toilet situation. Shocking, nothing less. But you can't stop progress and if its happening in one area (for eg, South Africa winning the SWC bid), then you have to let it happen. Don't rain on the parade of those of us who see the glass as half full. Call me naive. Perhaps. But naive and happy. With a vuvuzela in my mouth.

  • CTheB - 2010-06-09 13:05

    Well done on being another person to make up stuff about the situation with the toilets and pretend as if the DA hadn't done everything it promised to do. You point fingers at Grant Thornton, but how can we take you seriously when you lie so blatantly?

  • Niel - 2010-06-09 13:15

    Why don’t all you who are so negative go bury your heads in the ground for the next month so that the rest of us can enjoy what is truly a joyous and once in a lifetime occasion without this pathetic sulking!

  • Tammy - 2010-06-09 13:33

    Think of it this way... if you have a child and limited money, would you pay for A)Your child's school fees B)Food C)A soccer tournament? Seems really obvious doesn't it?

  • Keith Armstrong - 2010-06-09 13:46

    You hit the nail on the head. As a regular January visitor to South Africa, I find it hard to see the profligate spending and waste of money on stupid things instead of what was promisec years ago. Toilets are just one item that needs urgent attention. Archbishop Tutu was right when he said "They stopped the gravy train so that they get on it". Sad state of affairs. We love SA and the people but sadly watch it deteriorate each time we visit.

  • BIG RED - 2010-06-09 13:58

    I agree with DirkM. This article is actually years too late. Its like someone claiming credit after an event for something that has already happened. The money is spent. Get over it. Now go create some new jobs, who cares about the stats.

  • rs - 2010-06-09 14:10

    I will never miss to read an article written by Greta Steyn. Her view on the world Cup is what is the view of many. South Africa's Government is always reaching for the top and is very concerned and keen for positive world's attention and completely forgetting what is on the ground and this overlooking of inter alia the poor, uneducated, unemployed will eventually have an expensive price tag. Many years ago, when the ANC Government was first in power, Helen Suzman, in an interview mentioned that she feels the ANC is doing a good job but she is concerned about the continuous celebrations for every opportunity and this has not changed up to date and the world Cup is another great fiesta and is even on for 4 weeks

  • Brett - 2010-06-09 14:24

    I don't think Greta is saying that we should not host the World Cup, but rather that it would have been more of a benefit to us if we had not needed to spend so much. I'm in London now wishing I was in SA to share in this awesome event. Time to book my one-way ticket home I think. (...I'm off to Tesco supermarket to by a vuvuzela)

  • Eugene Botha - 2010-06-09 14:59

    I wasn't going to say anything about this blog. Its too clearly written by someoen determined to undermine the SWC to even bother, BUT for the benefit of those who read this after I do. The article is written too soon. Real punters are waiting for the cup to finish before condemning or praising it. I say, lets wait and see aand at teh same time - thank the Government that they bid on the SWC or we would not have seen any money being spent on roads in Gauteng! No government is perfect, but ours does benefit the people - just take a drive through tembisa, soweto and other townships where people have moved from deadly tin shacks to brick houses! Get out of your pearl tower before you criticise the government. Maybe your neighbourood has taken a drop in standards, but millions of people have seen improvement, and you drop in standards is minor in comparison to the huge step up they have had.

  • CHRIS - 2010-06-09 16:26

    YOUR COMMENTS ON THE STATE OF THE LACK OF TOILETS IN THE MUNICIPALITIES HAS SERIOUS IMPLICATIONS FOR THE HEALTH OF COMMUNITIES.

  • Juan - 2010-06-09 16:40

    SO TRUE!!!! Watch these soccer supporters moan about service delivery in August!

  • Kajan Lakhan - 2010-06-09 16:43

    Rome wasnt built in a day, neither was Harapa in the Indus Valley of Ancient Hindustan . The EU is cutting public servants salaries by 5%. A salary DEDUCTION, somethings which we as South Africans have never heard off! - because for every strike, we get another perk. It is not the country to blame, but the countries people - for not being really active in their countries activies. The Soccer World cup serves to educate the people aboard about what South Africa is. It advertises for us. Without this advertising , we as South Africans are merginalised on a world playing field. What was an "Unaffordable extravagance" when Eskom suddenly held the country to ransome, and as a result the DA won over the Cape due to poor service delivery. Politics is "Unaffordable extravagance" , because we do not know the extend to which a political party may go too. To their gain victory, it is the civil that suffer. ( this should be monitored some how. ) Lets quit complaining, and start doing. I dont see the rich communities getting physically involved with the poorer ones... if this can be done, then the social economics can be balanced, thus no crime due to poverty.

  • mike - 2010-06-09 18:09

    "Grant Thornton " again. Didn't they also screw up the numbers of foreign arrivals. Wouldn't place to much emphasis on their figures.

  • Buhle G - 2010-06-09 19:30

    I'm a final year finance and economics major and I must say that this article is shameful to say the least. The world cup bid was won 6 years ago. Qualified economists such as yourself ,Greta, used fairly sophisticated forecasting models to predict the impact the SWC would have on the economy. None of you had enough vision back then to foresee this. Now, 3 days before the country's greatest sporting event you come and write an article like this. I'd much rather show some patriotism for my country and Bafana.All eyes are on the nation now. Foreigners watching the spectacle will be impressed by the infrastructure we've provided for the tournament and I have no doubt in my mind that the long-term benefits will far exceed the short-term costs. Take a look at the CIVETS group we've just been classified under recently.

  • roguetrader - 2010-06-09 19:52

    Miracles happen. For once I am in full agreement with this columnist. I think Greta should rather stick to sport, and leave the SARB and interest rates alone.

  • Own goal - 2010-06-10 07:08

    This has nothing to do with ANC v DA or about patriotism. We can still support Bafana and also comment on this fiasco. Its about a very poor country wasting valuable resources and time chasing an image and a place in the world that could never possibly have been achieved by misallocating so many billions into non-productive assets. The only winners here are FIFA. If you wanted to raise South Africa's profile in the world, a well directed marketing campaign, at a fraction of the cost of the stadiums, directed at people that count, who have influence, and who could benefit SA in the long-term, would have achieved enormous results. What a shame to see in central Cape Town, amongst so much poverty and suffering and decrepit infrastucture, dozens of functioning streets ripped up, kerbsides, tarmac and paving removed and thrown away, only to be replaced with expensive patterned brick, bollards, trees etc. All to create a walkway for soccer fans on their way to a R4 billion stadium. For eight matches. We are not a rich country, we have more important tasks and priorities. To say that the money is spent and should be written off is an insult. You underestimate the damage done to tax morality in this country by such irresponsible expenditure. The taxpayers of this country are angry. Dont blame them if they are reluctant to pay their taxes in future.

  • Kajan Lakhan - 2010-06-10 11:49

    In definance of this article, a quote with a sting comes to mind " I like dreams of the future better than the history of the past. " Thomas Jefferson ...why are we concerned with what the British think or the Arabs ,Americans etc? ( we not dependent on them ) Greta, havent you watched the movie " City of God " . WHY DO SOUTH AFRICANS HAVE SUCH A LOW SELF ESTEEM? Every Country got its problems, they just dont degrade themselves.

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