What’s the World Cup worth? Quite a bit, if you’re the host nation.
South Africa, which is hosting the 2010 event, could add 0.5% to its 2010 GDP thanks to the month-long soccer tournament, according to DNAIndia.
It’s tough to say for how long the economic boost will linger in South Africa, but hosting the World Cup would undoubtedly benefit any nation, especially one that still suffers from poverty and financial imbalance.
South Africa Hopes for Money Influx, Image Repair
South Africa will benefit in the short term, that’s for sure. The competition is projected to bring approximately 370,000 foreign visitors who will inject plenty of money into the nation’s tourism industry, among others.
Add that to the money the nation has already spent on building stadiums and infrastructure, and the nation’s GDP has improved greatly. South Africa’s GDP grew 4.6% faster in the first quarter of 2010 than it did one year earlier. In the build-up to the event between 2007 and 2010, the government spent $4.3 billion and added 130,000 jobs building and renovating stadiums, improving airports and expanding roads.
South Africa, which was governed by a segregated apartheid system as recently as 1994, has made strides to reverse course but still suffers from rampant poverty, disease and crime. According to the CIA Factbook, the nation suffers from the world’s second-highest AIDS rate and 50% of the population is impoverished. According to a United Nations study, South Africa claims the second-most murders and most gun violence in the world. An incident-free World Cup could do wonders to reverse the public perception of South Africa as poor and dangerous.
Other Nations Have Mixed World Cup Results
Germany, which hosted the 2006 World Cup, saw sharp growth in spending activity before and during the tournament but suffered a steep decline afterward. South Korea and Japan in 2002 shared the hosting duties, failing to give a clear picture of whether either economy grew substantially. 1998 host nation France saw its private consumption shoot up 1.5% during the World Cup but also saw a quick post-Cup decline.
South Africa has a very different and less developed economy than that of France or Germany, so it will be interesting to see whether the nation can hold onto the solid growth it has seen leading up to the event.