The FIFA World Cup is over and fans from around the world are analysing the results but will there be lasting benefits for the host nation South Africa which spent approximately $US4 billion on the event? Similar questions apply to the quadrennial summer and winter Olympic Games as well.
Big events like the FIFA World Cup and Olympic games have a “feel-good” effect for the host nation and its citizens but I think in the cold hard light of day the billions in public funds spent on these events rarely results in a net long term benefit for the host nation and delays or cancels spending on more pressing public health, education and transport projects.
The South African Government spent approximately $US 4 billion on the 2010 FIFA World Cup even though roughly 43% of the South African population live under the poverty line.
The International Olympic Committee and Fédération Internationale de Football Association (FIFA) etc are parasitic, corrupt organisations which make a fortune from selling media rights and get treated like royalty through the bidding process and during the event.
Projected budgets for World Cups and Olympic Games almost inevitably blow out and in return the massive cost for events stadiums, infrastructure, transport etc is footed by the host nation who gets a temporary surge in tourism
In the aftermath there are always white elephant assets like stadiums and special purpose transport which can’t be used by most people or is flogged off to private companies in a fire sale.
Forecasts of huge tourist influxes during and after big events can prove to be very costly, as the Chinese government learnt during the 2008 Olympics whose partially empty venues all too obvious to TV viewers.
Expensive infrastructure projects undertaken for the Olympics also generally contribute little to long-run economic growth. While the construction of modern airports, highways, and transit systems are vital for economic development, the specialized sports infrastructure required to host an Olympic Games cannot easily be converted to other uses.
The so-called Water Cube, the site of Michael Phelps’s golden achievements, is an architectural and technological wonder. But after the closing ceremony, Beijing will have little use for a state-of-the-art swimming facility that seats 17,000.
- Boston Globe
“The price of the best Games ever is becoming clearer by the day,” argued The Sydney Morning Herald. “Despite the Government’s claims that the Games were paid for, resources were directed to them at the expense of other investments. Magnificent stadiums and sporting facilities (which have since struggled to attract users) were built for a fortnight of world’s-best-practice partying, instead of the money being spent on more humdrum things such as railways, roads, ports, schools and hospitals.”
- Telegraph
One of the worst examples is Montreal which hosted the 1976 Summer Olympic Games and took 30 years to pay off the government loans to fund the games.
It is also commonplace for the host nation to “cleanse” the streets around venues by evicting homeless people to make sure they aren’t filmed by TV cameras or photo journalists. This has been documented many times including the 2010 FIFA World Cup, 2000 Sydney Olympics and Atlanta Olympics in 1996.
Governments often claim that small business with shops near event venues will benefit but in reality there are usually large exclusion zones which stop vendors selling their local food stuffs or craft items in order to “protect the rights of sponsors” like Macdonalds.
Corruption, Bribery, Much needed funds taken away from public health, education and transport and PR Spin to make cities look like there aren’t any poor or homeless people…
So do big events like the Olympics and FIFA World Cup sound like a great experience which countries should aspire to hold in their capital city? I don’t think so.
{ 4 comments… read them below or add one }
$US 4 billion on the 2010 FIFA World Cup is really expensive..But, Investment in South Africa growth well after fifa world cup…
Neerav,
You are right, in as much as any significant infrastructure investment has the potential to go wrong and lose significant amounts of money. The Cross City Tunnel or Lane Cove Tunnel in Sydney are great examples of this.
But I think the overall premise of your post is wrong, large events like the World Cup or Olympics are enormously positive and transformative overall for the host cities. There are exceptions and you have highlighted them well in your piece.
To speak to the specific questions you raise, like the stadums in Beijing being empty, is largely a consequence of the barriers the Chinese Government put up to travellers entering the country. As the World Cup in South Africa proved, if the doors are open, the tourists will come in record numbers.
Having recently spent time in Vancouver, Canada, I can attest first hand to the kind of long term transformation that the focusing of community activity can bring to a city, Urban transformation occurs, new transport infrastructure is built, the city itself is branded and advertised to the world, and real business occurs.
Similar experiences happened in Sydney, in Seoul and Barcelona, cities that really came of age as a result of hosting olympic games. Now the hosting of the games did not fix all the challenges that those cities faced and continue to deal with, but it dramatically changed the direction and future capability to manage and respond to them.
The transformation that is going on in London for the Games is nothing short of amazing and will I think be an amazing legacy to the British people, not just a good 16 day junket for the Olympic family.
Cheers
Matthew
I agree. Recently a town near where we live in Tucson paid boatloads of money for a new stadium. Then the economy soured. Now they have a big stadium with little money.
I do believe Peter Uberroth (sp?) made money on the LA Olympics years ago, but mostly those things are big money sinks.
There is a history of tax payers footing the bills for sports. It is a tragedy all the good that could be done to help better our world is spent in this manner. Let sports pay for themselves. Taxes should help the people, especially those in need.