World Cup missed economic goals
THE billions invested by South Africa in stadiums for the 2010 Soccer World Cup did not bring long-lasting economic benefits.
That’s according to a report by German researchers, who used satellites to measure the light emitted from host cities at night to measure the impact of investments in World Cup infrastructure.
The economists found that in the short term — between 2004 and 2009, during the pre-tournament construction boom — there was a 1.3-percentage-point decrease in the unemployment rate and an increase of $335 (about R5 100 at today’s exchange rate) in GDP per capita.
But the growth was shortlived, largely due to the jobs being short term.
The research also concluded that in the absence of “plausible concepts regarding how stadiums could be reused after the actual event, such investments do not seem to pay off”.
The findings are supported by South African filmmaker Craig Tanner, whose documentary, March of the White Elephants, is part of the Durban International Film Festival, which opened on Thursday.
The film focuses on South Africa and Brazil, where the World Cup was held in 2014, and concludes that “Fifa prowls the globe, pocketing billions and leaving host countries with a legacy of empty stadiums and social distress”.
The German researchers found, however, that investments in transport — such as airports, bus rapid transit systems and the Gauteng Freeway Improvement Project — had long-term economic benefits.
“These positive gains are particularly evident in smaller towns,” they said. “For example, in Rustenburg . . . we find a very large effect of the World Cuprelated infrastructure investment, equivalent to an increase in GDP per capita of around $3 642.”
Researchers Gregor Pfeifer, Fabian Wahl and Martyna Marczak, of the University of Hohenheim, will present their findings on Thursday at a conference in Italy. Their research used data on “night lights intensity”, which had been “recently acknowledged as a suitable proxy for economic development”.
Converting the value of World Cup-related investment into dollars at the average 2010 exchange rate, they found that South Africa invested $14-billion, mostly on transport ($11.5billion). Stadium construction accounted for $2.5-billion. Six stadiums were built and four got facelifts. Millions were spent upgrading training venues.
Out of 127 investment projects identified, they narrowed their list to 72 directly linked to the World Cup.
“[Results of the research] suggest that such events can distinctly benefit the affected regions if public investments are directed on improving the ‘right’ infrastructure,” they said. “This seems to be the transport sector, where we observe persistent treatment effects still evident years after the tournament.”
City of Johannesburg spokesman Nthatisi Modingoane said the World Cup had enhanced the metro’s status as a city that could punch at a global level.
“The World Cup . . . has given Johannesburg access to both expertise and platforms where direct investment in Johannesburg is being promoted.”
The city’s bus rapid transit system, Rea Vaya, formed the backbone of a project called Corridors of Freedom, which aimed to reverse apartheid spatial planning, he said.
The City of Cape Town is struggling to find ways to make Cape Town Stadium pay for itself, but mayoral committee member for transport Brett Herron said transport-related investments had been necessary regardless of the World Cup.
“Parts of the planned improvements were fast-tracked
Such events can benefit regions if public investments are directed at the right infrastructure
. . . so as to provide a public transport service to and from the airport and also to and from the Cape Town Stadium.”
Neil Brandt, producer of March of the White Elephants, said the World Cup could be amazing. “But the way local elites get into bed with Fifa creates a process where an enormous amount money is spent in the incorrect way.”