When FIFA confirmed Brazil as the site of the 2014 World Cup in 2007, the BBC reported that celebrations broke out throughout the country. Now with the current protests in Brazil, some are questioning the wisdom of allowing certain countries to host the World Cup based on economic factors.
Are these critics claiming that GDP should be a qualifying factor to host the World Cup? If so, Brazil’s GDP is the seventh largest in the world according to the World Bank. How does Brazil not qualify?
Or are they saying that a country’s poverty rate should be a factor? The World Factbook by the CIA indicates that every host country for the last thirty years except France has had a double-digit percentage of the population living below the poverty line. For example, Germany had 15% of its population below the poverty line, Brazil 26%, Italy 29% and South Africa 50%.
The only economic factor that should be taken into consideration is if the country qualifies through FIFA’s rigorous bidding process because of the enormous economic advantages and changes the global event brings.
When a country hosts the World Cup, infrastructure, telecommunications, hospitality and a multitude of other industries receive massive infusions of investments from within and outside the country.
These industries in turn hire millions of workers, raising the living standards of the population and increasing the tax base for the government to reinvest back into society.
A report from Ernest & Young Terco forecasted that an additional $64 billion will flow in the country from 2010 to 2014 in preparation of the World Cup, generating 3.63 million jobs a year.
The report also demonstrated the positive economic impact of the past three World Cups for the host nation: Japan and South Korea took in $9 billion in 2002; Germany took in $12 billion in 2006; and South Africa saw $5 billion in revenue. For this year’s tournament, forecasters are predicting a $3billion to $14 billion positive economic impact.
Price Waterhouse Coopers estimates that over 500,000 soccer fans will visit Brazil, spreading tourism dollars throughout the country from the southern city of Porto Alegre to the northern city of Manaus.
Still, according to a Pew Research Center study, 61 percent of Brazilian respondents now think hosting the World Cup is bad for Brazil because it takes money away from schools and public services.
Yet Brazil spent 5.6 percent of its budget on education in 2010 versus 3.5 percent in 2000, showing that World Cup spending did not cause a cut to the educational budget.
Colombia, the other serious contender for the 2014 World Cup, actually decreased the amount of money it spends on education from 2009 to 2012 just when Brazil was ramping up spending on preparations for the World Cup according to the World Bank.
This proves that just because money is not spent on one area, it doesn’t mean it will be spent on a different area.
Only global events on the world stage can prompt a government and populace to come together and make massive capital investments that will benefit the country as a whole.
This has been proven by Brazilians coming together to build or renovate twelve first class soccer stadiums throughout the country.
While the World Cup cannot fix all of a country’s economic problems, it does help millions and provides an extra stimulus to the economy. It can also expose long-running problems in a country, such as corruption and stagnant wages, which when placed under the global microscope can lead to opportunities for greater change as is currently happening in Brazil.