- A new research book discussing the future benefits and legacy of the 2010 FIFA World Cup in South Africa concludes material and economic development hopes pinned to the event are mostly "overstated". The non-material legacy will become more important.
With 100 days to go before the FIFA World Cup in South Africa, many questions are being asked about the legacy the event will leave behind. Dr Udesh Pillay, author of the recent book "Development and Dreams: The Urban Legacy of the 2010 FIFA World Cup," concludes that while the event will leave behind many positives, the economic development benefits tend to be slightly overstated.
According to data collected by the scientist and to his analysis, contribution to GDP is predicted in the region of between 0.2 percent and 0.5 percent. This means the figure will almost not be felt.
When it comes to the labour market, benefits of the World Cup will also be smaller than the public expects, according to Mr Pillay. Only 150,000 employment opportunities - and not jobs per se - were created for a short-period of time. These were "most temporary in nature, with little skills transfer," according to the analysis.
The expected increased trade and investment flows "have yet to materialise," Mr Pillay holds. And even the boost to tourism was "unlikely to exceed 0.5 percent of GDP," he adds.
Even ticket sales may become a disappointment. Local ticket sales currently stand at only 11 percent. "If this does not pick up appreciably, a lot more foreign tourists than the 450,000 expected will be required to purchase tickets so as not to compromise a key revenue stream," he observes.
Also the heightened levels of imports for the event - including raw materials like cement, steel, plastic, fibre optics, cables, and so forth - without commensurate growth in the South African export trade had widened the current account deficit to close to 5 percent of GDP at present, the analysis found.
Finally, the event would "not help to significantly mitigate poverty nor accelerate levels of service delivery, as longitudinal studies have attested," Mr Pillay concludes on the economic long-term benefits of the 2010 World Cup.
While the researcher finds that, overall, "the material benefits seem to be circumscribed," there were other, more pronounced material or tangible benefits for South Africa, which would serve the country's economic interests well in future. In particular Mr Pillay emphasises on the development of an integrated public transport system and expedited investment in infrastructure. This included investments in ICT, ports-of-entry upgrades, improving infrastructure in the service industry, and more.
"It is also worth noting that a 0.2 to 0.5 percent contribution to GDP, while small, is not entirely insignificant given that our economy contracted by 1.8 percent last year (2009). The 0.5 percent contribution that tourism is predicted to make to GDP, given a South African economy that is only now beginning to rebound, is also not insignificant," the researcher added.
He however holds it would be unfair to assess the potential of the event in zero-sum terms, or simply in terms of the material legacy it leaves behind. "The softer, more intangible and indeterminate legacy may be no less important" for the nation, Mr Pillay says.
One should not underestimate the value of "the distinctly feel-good factor of the event, and the excitement it has engendered, which talks to the emotional pulse and mood of the nation." In Germany after the World Cup there, this led to a positive spirit that had its effects on the economy.
Also, the potential the event had for nation-building, unity and social cohesion in South Africa should be considered an important asset, Mr Pillay says, adding to "the sense of pride and patriotism that emerges." He holds that South Africa organising of the 1995 Rugby World cup had a similar valuable effect on the nation.
The World Cup would lead to a national and global "celebration of South Africa, and indeed Africa's, competence and capability to host a mega sporting event of this magnitude." The image building value of this celebration could have a key effect on investments in the nation and the continent over the long run. It could further help "the debunking of Afro-pessimism," he holds.
Also in South Africa, it could lead to a change in attitudes, contributing to "the resilience and efficiency of our institutional arrangements required to make the event a success." Further, it should provide "a sound project planning blueprint at all levels of government, which augurs well for future mega-events and mega-projects."
Culturally, the World Cup would provide an opportunity to celebrate South Africa's and Africa's diversity, culture, identity and beauty, and the place-promotion opportunities this engenders, the analysis holds. Finally, the World Cup would provide "hope" to a nation strongly fractured socially, economically and politically, the researcher assesses.
Overall, South Africa's massive investments in the 2010 World Cup therefore should prove worthwhile.
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