Monday, October 31, 2011
Economic Impact of the World Cup
Many would be quick to assume that the largest global sporting event, held every four years, would bring economic prosperity to the host country, regardless of size. The World Cup is assigned through a bidding process that requires countries to outbid other nations for rights to host the tournament, and the winner eventually has to build stadiums, hotels, and tourist attractions for the month the tournament happens. Because it is already a generally large tourist destination, the economy will not thrive because of an unusual amount of visitors. South Africa is a relatively small country with 50% of the population living in poverty, and a 24% unemployment rate. Although the World Cup brings jobs and a temporary expansion and peak, to the country for the few years prior to the tournament, the people who are assigned the task of building the stadiums are out of a job as soon as the tournament comes to a close. The stadiums then usually sit empty, with no practical use for such a large venue. The government then usually sits in debt because of the millions of dollars they spend building on stadiums that don't bring in revenue. The host countries have to weigh the costs and benefits of hosting the tournament in their country before they decide to place their bid. Although the tournament brings temporary economic highs, the benefit of the economic boost may be outweighed by the contraction that follows.