Economic Impacts of Hosting a World Cup
In the world of sports, you can’t deny that the FIFA World Cup 2020 is a big deal. Every four years, this event takes place. However, the country that will host the event changes on a recurring basis. The privilege to host the very next World Cup will be awarded through a competitive bidding process. This practice has been questioned by a number of economists.
There is, however, no solid evidence that hosting the World Cup is a good thing. This appears to be a waste of time, resources, and funds to the majority of economists and the general public. As a result, World Cups will continue to be held until at least 2026.
There have been several countries that have slipped into debt since the World Cup was held. South Africa, which hosted the 2010 FIFA World Cup, serves as a good example. Media coverage of the FIFA World Cup’s economic benefits continues to be emphasized, which is peculiar. The benefit, if any, is greatly exaggerated in this case.
Does it make sense to host a World Cup?
Despite the fact that many people consider football to be the most essential sport to devote our time and resources to, many economists disagree.
This is due to the widespread belief that hosting the vòng loại world cup is an unnecessary expenditure. In spite of the fact that it may be easy to condemn economists for being jerks, the vast majority of data points to the contrary.
The World Cup in Russia this summer is expected to generate a cumulative economic impact of $30.8 billion by 2023, according to the tournament’s organizers. Putting all your investments on construction and other forms of investment will have the desired effect.
Many argue that hosting large athletic events like the World Cup may help a country’s economy by drawing tourists, launching critical infrastructure projects, and making cities and countries attractive places to conduct business.
However, it appears that the expenses of accomplishing these lofty objectives surpass the gains they bring economically.
It’s a huge investment
The potential cost of holding a large athletic event is the most obvious factor. Long-term investments in vital sections of the economy are more likely to benefit from the money invested on new or updated infrastructure.
This justification for large-scale development is often based on economic growth and long-term benefits to society in the short term.
The Inclusive Growth and Development Report of the World Economic Forum contends that concentrating on inclusive growth is more important than increasing government spending, even though this may be true. This entails spending in order to boost the economy and enhance the lives of the general public over time.
It’s unfortunate that sporting infrastructure is so expensive to build and maintain, consumes so much valuable and limited real estate, and is so rarely used as to be unaffordable in terms of upkeep. In reality, a stadium isn’t necessary for the average worker’s financial security.
It’s too costly
It’s difficult to account for the FIFA World Cup 2020 because all of the costs are just tacked on to the revenue generated by the event itself. Opportunity costs should be taken into account in any economic analysis.
As a result, FIFA doesn’t take into account any opportunity costs. The truth is that even the sum of money has been spent even if the FIFA World Cup was not held in the hosting country. Watching a movie, going out to eat, and so on all cost the same amount of money.
Expenditures for the FIFA World Cup are simply diverted to football.
Some say it promotes tourism
Most people consider hosting the FIFA World Cup pride for a country and it is typically highlighted as a big benefit to tourism. Many argue that the World Cup is why so many people from other countries travel to host countries.
As a result, the hotels and restaurants in the area generate revenue, and the economy as a whole benefits as a result as well.
This argument has numerous faults. To begin, it’s important to remember that the recent uptick in tourism is merely a passing phenomenon. Tourism will return to pre-World Cup levels once the tournament concludes. As a result, the economy benefits little from it.