FIFA World Cup Economy


The Olympic Games and the World Cup are presented as major economic assets for the host countries. But, that doesn’t always happen. Barcelona certainly became the poster child for success by hosting a mega-event with its $10 million in profits from the 1992 Olympics.

However, Greece’s billions in Olympic debt from the 2004 Athens Games accelerated its bankruptcy and the 2016 Rio Olympics also suffered a $2 billion loss, to name a few- one.

In a 2016 article in the journal Intereconomics, which complements his 2015 book “Circus Maximus”, economist Andrew Zimbalist of Smith College in Massachusetts questions the economic justification for staging hugely expensive shows such as the Olympics, the FIFA World Cup or the UEFA European Championship. and finds that mega-events are far from the economic drivers they are perceived to be.

“Depending on the event and the host city or country, the actual economic outcome can range from very negative to neutral or even slightly positive,” Zimbalist wrote.

What about Qatar, which has little football history? Given that FIFA will cover all operating costs budgeted at $1.7 billion during the month of competition and that the projected revenue of $4.7 billion from international television, tickets, Hospitality and corporate sponsorships will also belong to FIFA, the football governing body expected to make a $3 billion net gain. However, Qatar – having a GDP of around $180 billion in 2022, has spent at least $220 billion to host the World Cup – in bidding, construction/renovation of eight stadiums, transport , hospitality, telecommunications and security infrastructure. Thus, since Qatar won the World Cup in 2010, it has spent on average more than 10% of its GDP per year.

Infra ‘white elephants’

Hosting an Olympic Games or a World Cup is often seen as a long-term investment for a country. It is certainly advantageous to be able to use considerable existing installations, as the United States were able to do in 1994 and Germany during the 2006 World Cup. But, in most cases, important installations entailing enormous costs were to be built. However, stadiums often become “white elephants” afterwards, requiring gigantic maintenance expenditure.

For example, built for the 1976 Olympics, Montreal’s “Big O” Stadium took 30 years to fully pay for itself, and it continues to cost $43 million in ongoing repairs. With approximately three million permanent residents, there are reasonable concerns about the lasting utility of infrastructure in Qatar. In fact, several stadium sites in Qatar will be reallocated and part of the arena will be given to an underdeveloped nation to help build sports arenas. But, most of the newly built infrastructure like hotels, metro, new roads, a bridge connecting Doha and Bahrain, increased hotel capacity, etc. would fail to contribute to the economy and the way of life of the country afterwards.

The IMF predicts that Qatar’s economy will grow by 3.4% in 2022 due to the World Cup, but will then slow to 1.7% by 2024. Well, with around 1.2 million visitors from the World Cup, Qatar can expect to raise almost 1.5 billion dollars. in accommodation revenue. However, as 90 percent of Qatar’s workforce are foreigners, the benefit of new job creation is inconsequential to Qatar.

Increasing soft power in terms of getting a bigger role in geopolitics should be Qatar’s other goal in hosting the World Cup, for sure. But, there are a lot of controversies in Qatar about home rights, its human rights issues, LGBTQ+ issues, etc., and that hasn’t really helped Qatar to take full advantage of the situation. organization of the World Cup.

On the contrary, the World Cup might have drawn more attention to Qatar’s human rights record, particularly the mistreatment of migrant workers.

All in all, Qatar’s World Cup advantage could be a tricky calculation that could eventually result in a significantly negative exit.

The author is Professor of Statistics, Indian Statistical Institute, Kolkata


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