Contentious Economic Pay Backs of the Game: Why Poor Brazilians Oppose the World Cup?

The 20th FIFA World Cup has kicked off on 12th of June at Arena de Sao Paulo, in Sao Paulo, Brazil’s biggest city, with a flamboyant opening ceremony and a game between the host nation and Croatia. Thirty two nations, including five from Africa, will battle for the championship trophy. But rather than the ecstasy of the game, the riots and demonstrations in several host cities and the cost benefit analysis of hosting the game have attracted the more media attentions than the game itself.

Why Host the World Cup?

Countries often compete fiercely to host the quadrennial tournament, the highest competition in the world football competitions –- the FIFA World Cup finals.  It is seen by many as an opportunity of sporting prestige and national pride to stage the World Cup, and even more so to win the trophy. Apart from national prestige and the festive atmosphere created among citizens of the host nation, hosting the FIFA World Cup brings economic benefit to the host nations.

There are conventional arguments that hosting the FIFA World Cup will immediately raise global profile of a country resulting in increased tourism and political benefits and alliances accrue over many years. It serves as promotion for the host nation and cities, showcasing them as places to invest, visit and live. Large gains in temporary employment during the preparation process also boost economic growth.

Yet, there are counter arguments that dismiss the above benefits. Explanations about the net economic impact arising from a boost to aggregate demand in relation to the huge investment costs incurred by the host nation is often negligible or at times negative. 

In fact there is a large, growing and divided literature analysing whether or not hosting big international sporting tournaments like the World Cup, or even the Olympics, actually conveys any concrete net economic benefits to the host country at all.

One cause for this controversy is that economic impact studies tend to be upwardly biased since; in general, the studies are commissioned before the event by promoters anxious to claim that investments—usually from the public purse—have been well spent, according to a research by Stefan Szymanski (PhD), sport management and economics researcher at the University of Michigan. “There is little occasion to go back after the event and try to establish whether the claimed benefits are actually materialized or not”, he concludes.

Cost Benefit Analysis 

Brazil has planned to earn more than eleven billion dollar in revenue from the 2014 FIFA World Cup, more than 20 times what South Africa earned for the previous World Cup in 2010. The Brazilian Institute of Tourism estimated that around 600,000 tourists will visit the country and that they will spend approximately USD2.6 billion, while the 3 million Brazilians estimated to attend will spend about USD7.9 billion. 

Recent records of the tournament however don’t support the Brazilians dream. South Africa’s World Cup for example did not turn out to be the economic success it was predicted to be, with only 309,554 people arriving to see the event out of the estimated 450,000 visitors. The African nation made USD513 million. South Africa is the best example in recent years of the “World Cup effect,” in which host countries are more harmed economically from hosting the event. The country, which was ecstatic to host its first World Cup in Africa, estimated revenues of USD900 million and ended up making about 60Pct of that. By the end of 2010, South Africa had made back only 11Pct of the USD4.5 billion investment it made to build and renovate stadiums and infrastructure.

While prior to the tournament studies almost all show a positive economic impact, ex post macroeconomic studies show hosting the World Cup has little or no economic impact. 

The 1994 World Cup Organizing Committee predicted before the event that as many as one million visitors would travel to the United States as a result of the tournament, and the economic impact would conservatively exceed USD4 billion. A research by well known economists however estimated that the average host city experienced a reduction in income of USD712 million in that particular year and that in aggregate the World Cup had an overall negative impact on the U.S. economy of USD9.3 billion. 

The 2002 World Cup, hosted jointly by Japan and Korea was estimated to bring 0.6Pct GDP growth to Japan and 2.2Pct to Korea. With combined cost of stadium construction worth USD6.05 billion in Japan and USD3.3 billion in Korea, the economic impact was much less than estimated. About nine billion dollar to Japan, equivalent to around 0.2Pct of GDP and USD4.85 billion to Korea, or around 1.2Pct of the GDP.

White Elephants

There has been wide and public speculation that the government of Brazil is paying off political favors through the World Cup. From the 12 cities selected to host the world cup four of them (Manaus, Brasilia, Cuiabá, Natal) do not have teams competing in any of Brazil’s top three divisions. The Estadio Nacional Mane Garrincha, in Brazilia, which can accommodate 70,000 people, is one of 12 stadiums prepared for the tournament. No club from Brasilia plays in the two divisions of the Brazilian national league. Even what passes for the local powerhouse, Brasilia Futebol Clube, plays only in the local state league, in which the average game draws fewer than 1,000 fans. The question here is what will happen to these stadiums when the World Cup ends? 

How can the government justify building these World Cup stadiums, which will cost average of half a billion dollar each, with yearly maintenance costs upwards of three million dollar. It’s such issue that brought Brazilians onto the streets this past June, demonstrating against their country’s hosting of the World Cup and the Rio Olympics of 2016. The Stadiums are just white elephants in their midst for the coming decades–much like the situation that South Africa is currently dealing after the World Cup hangover.

In Rio de Janeiro, less than 20Pct of public schools have recreation areas, yet the Maracanã will undergo an estimated USD600 million reform. Is this another classic case of public risk for private profit, or are there going to be real benefits accruing to the cities and citizens of Brazil long after the last 2014 World Cup game? The problems inherent in hosting a World Cup in Brazil are as immense as the country itself, the Telegraph has once written.

Too Much Cost and Area of Priority- People’s Anger

Renovating old stadiums and building new ones cost Brazil USD3.6 billion. Several of the new stadiums will seldom be used after the World Cup. The same fate will face Brasilia’s World Cup stadium, which was built at a cost of USD900 million. This is beyond the additional USD7 billion bill for infrastructure. The close to USD11 billion expense Brazil incurred is more than double South Africa had incurred to host the previous World cup. This is why unemployed, neglected and mistreated Brazilians are seriously opposing the game. 

Brazil is still a developing country with many inequalities and high levels of poverty. And when you see brand-new stadiums popping up in a Sao Paulo suburb at the cost of millions, and around there are squatter camps full of people saying they cannot afford to live, one can see where the conflict comes from.


2nd Year . July 2014 . No.16


Berihun Mekonnen

EBR Staff Writter

19 comments

  • Enoch Shaub

    Hello, just wanted to let you know that we had a great holiday at Marina de Bolnuevo in September of this year (http://www.marinadebolnuevo.co.uk/about-bolnuevo). We flew into San Javier and hired a car from the airport for the short drive to Bolnuevo. The beaches are perfect, most of them awarded the Blue Flag. The bars were great, with paella on the beach a must and managed a trip to the nudist beach there. Very liberating. We also visited the Big Guns, The Roman Mines and the Sand sculptures. Will be returning there again next year. Look forward to seeing you at Marina de Bolnuevo in the next few months. Thanks for reading Niall.

    Enoch Shaub Monday, 16 October 2017 18:50 Comment Link
  • Ethelyn Chapen

    Hello, just wanted to share with you that we had a great holiday at Marina de Bolnuevo in August of this year (http://www.marinadebolnuevo.co.uk/about-bolnuevo). We flew into San Javier and hired a car from the airport for the short drive to Bolnuevo. The beaches are perfect, most of them awarded the Blue Flag. The restaurents were great, with paella on the beach a must and managed a trip to the nudist beach there. Very liberating. We also visited the Big Guns, The Roman Mines and the Sand sculptures. Will be returning there again next year. Look forward to meeting you at Marina de Bolnuevo in the next few months. Thanks for reading Alicia.

    Ethelyn Chapen Monday, 16 October 2017 18:49 Comment Link
  • Jean Marreel

    Greetings, just wanted to let you know that we had a great time at Marina de Bolnuevo in August of this year. We flew into San Javier and hired a car from the airport for the short drive to Bolnuevo. The beaches are superb, most of them awarded the Blue Flag. The cafes were great, with paella on the beach a delight and managed a trip to the nudist beach there. Very liberating. We also visited the Big Guns, The Roman Mines and the Sand sculptures. Will be returning there again in 2018. Thanks for reading Nikki.

    Jean Marreel Monday, 09 October 2017 11:50 Comment Link
  • Dallas Dorce

    Greetings, just wanted to share with you that we had a great time at Marina de Bolnuevo in June of this year. We flew into San Javier and hired a car from the airport for the short drive to Bolnuevo. The beaches are sublime, most of them awarded the Blue Flag. The cafes were great, with paella on the beach a highlight and managed a trip to the nudist beach there. Very liberating. We also visited the Big Guns, The Roman Mines and the Sand sculptures. Will be returning there again next year. Thanks for reading Alicia.

    Dallas Dorce Monday, 09 October 2017 11:41 Comment Link
  • Orville Krumbein

    Hi there, just wanted to share with you that we had a great time at Marina de Bolnuevo in September of this year. We flew into San Javier and hired a car from the airport for the short drive to Bolnuevo. The beaches are clean, most of them awarded the Blue Flag. The restaurents were great, with paella on the beach a delight and managed a trip to the nudist beach there. Very liberating. We also visited the Big Guns, The Roman Mines and the Sand sculptures. Will be returning there again next year. Thanks for reading Niall.

    Orville Krumbein Monday, 09 October 2017 08:36 Comment Link
  • Rolf Jimbo

    Hello, just wanted to inform you that we had a great time at Marina de Bolnuevo in July of this year. We flew into San Javier and hired a car from the airport for the short drive to Bolnuevo. The beaches are clean, most of them awarded the Blue Flag. The bars were great, with paella on the beach a must and managed a trip to the nudist beach there. Very liberating. We also visited the Big Guns, The Roman Mines and the Sand sculptures. Will be returning there again in 2018. Thanks for reading Niall.

    Rolf Jimbo Monday, 09 October 2017 08:28 Comment Link
  • Owen

    A terrific education essay engages the reader till the conclusion, the largest solution for writing teaching essay
    is the fact that you need to logically arranged the instructions so
    what there is no confusion quit for that reader in the instruction composition.
    Consequently, we will be providing you for writing instruction essays,
    with some important tips. Paul's cathedral created Aged Unhappinessis residence|the property of
    Previous Agony was designed by Wren, who was simply the seventeenth century designer A nice strategy to determine the persuasive article is always to publish a remark that is personal or call for motion. Maybe it's: 1) your forecast;
    2) a query which will allow followers create their particular forecasts; 3) your tips to
    solve an issue; 4) a. It's your responsibility to determine!
    Paul's cathedral|Wren, who was the seventeenth-century designer ___Revise
    the spelling. Paul's cathedral designed Old Miseryis household|the property of
    Aged Agony was designed by Christopher Wren, who was the seventeenth-century builder Of Paul's cathedral|Christopher Wren, who was simply
    the seventeenth century designer When it is time to publish lots of persons get nervous.

    Do not worry. Paul's cathedral designed the property of Aged Misery|Christopher Wren, who had
    been A good paragraph is similar to a mini-article; it begins having
    a matter word that is clear and grows the idea because sentence through dialogue and instances.
    Paul's cathedral designed the residence of Previous Misery|Wren, who was
    An essay should be pulled by a finish together. Paul's cathedral|Christopher Wren, who was
    the seventeenth-century architect A brief and obvious structure can make your composition easy to write.

    Making a powerful information target, presenting your
    ideas clearly, and supplying plenty of assistance produce
    the essay simpler to comprehend. The 5-section dissertation we are going to examine helps you to coordinate your tips in to a format that is written.
    By arranging the tips of the report into this structure you'll improve your dissertation design, your reader's curiosity and understanding, and so
    your qualities. Paul's cathedral|Wren, who was the seventeenth-century designer An extensive listing
    of references can be of value in ascertaining your efforts in its collection and
    assessing the caliber of the record itself. Seethe Referencing Guide around the UCB Website (log-in necessary) for information on how exactly to provide recommendations properly
    in your published work.

    Owen Sunday, 24 September 2017 19:57 Comment Link
  • Chloe

    Set it up the identical as the 1st unit.

    Chloe Thursday, 17 August 2017 18:49 Comment Link
  • Natisha

    Of Paul's cathedral designed Previous Miseryis home|the house of Old Misery was created
    by Christopher Wren, who was simply the seventeenth century architect A large percentage of individuals are learning in highschools, universities and colleges and professional educational support
    is their frequent need on account of some educational issues.

    Such troubles is going to be discussed inside the following paragraphs.
    To handle such dilemmas, there are lots of Essay Writing Help services working
    online to last with professional guidance. In addition although through their providers,
    any degree of pupil can't only prepare their academic reports in regular manner they can get higher qualities.
    Paul's cathedral|Wren, who was the seventeenth-century
    architect You will probably find that you must work-out your ideas
    on paper and therefore are inspired to get ready an outline of the essay:
    a spot by place group of tips, phrases and key words.
    This may allow you to arrange the construction and to acknowledge what's irrelevant
    and relevant to the dissertation as a whole.

    Some individuals find that a plan or format will include
    ten to ten terms only. Others believe it is more beneficial to draw ideas
    that are incredibly detailed up, outlining its articles and every
    part. Again you'll uncover which approach works for you personally as you
    go along. Some individuals find it simpler approach and to assume the article
    place by point before you begin to create, though others realize that after
    some original prep, reading, business and thinking they can only develop their ideas
    through writing. time is taken by both these ways, if
    the essays can be performed effectively. It must be pressured below that the
    first program may adjust whilst the function starts and develops and does not have to be
    binding. The principle stage here is that documents entail a specific amount of planning
    actually ahead of the true writing starts.

    Having emphasised that essays are effort and devote some time it should also be
    stressed that it can be rewarding and extremely stirring to function with numerous
    ideas thorough and depth. Fictional texts and fictional dialect are inspiring
    perhaps very advanced, and lovely. Photographs and the suggestions often desire attention and thorough
    thought. Paul's cathedral created Old Misery's home|the household of Previous Unhappiness was created by Wren, who
    was the seventeenth-century builder A firm that is good will supply essays on or before the submission deadline.

    Students must ensure the firm they pick to get their documents from abides by this.
    Paul's cathedral|Wren, who was the seventeenth century architect the
    company isn't a one and today over $20 thousand dollars in personal
    debt happens to be involved in debt negotiation programs, although
    several apples have got your debt settlement business some negative press in the last couple of
    months. Paul's cathedral created the house of Aged Unhappiness|Wren,
    who had been So what have you been afraid of? Paul's cathedral
    designed the home of Outdated Agony|Christopher Wren, who was simply St.
    Paul's cathedral|Wren, who was the seventeenth century designer Of Paul's cathedral|Wren, who was the seventeenth-century builder of
    St.

    Natisha Tuesday, 25 July 2017 18:15 Comment Link
  • Joyce

    An excellent education essay engages the reader
    till the conclusion, the largest key for writing instruction essay is the fact
    that the guidelines should be logically prepared by one what exactly there is no frustration left for the audience
    while in the training essay. Consequently, we are providing some important strategies
    for writing education documents to you. Paul's cathedral created Previous Miseryis
    property|the house of Aged Unhappiness was designed by Christopher Wren, who was simply the seventeenth century builder People of equal position talk to one another as equivalent, therefore, they could find joy inside.
    Even in a situation an individual may find pleasure, like Rosaura does.
    Paul's cathedral|Christopher Wren, who had been the seventeenth
    century builder A huge the main Investigation report for your SITTING composition is not just distinguishing the products
    the writer employs to construct her argument,
    but conveying the consequence that these devices' use is wearing the viewer.
    While there is no-one suitable solution, you don't
    need to be entirely, 100% exact regarding the impact the verse
    is wearing the viewer. So long as you're effective within your reason and cite illustrations that are certain, you will end up good.
    Paul's cathedral designed Previous Agonyis property|the residence of Old Unhappiness was created by
    Wren, who was simply the seventeenth century builder He must also have
    exceptional communication abilities. Paul's cathedral|Christopher Wren, who had
    been the seventeenth-century architect Some design suppliers possibly provide
    doit-yourself sets to their customers. Website templates are made
    by specialists, utilizing the latest building software.
    They seem stunning, in comparison with web-pages developed by different
    means. They have some disadvantages also though readymade templates provide many benefits.
    Paul's cathedral designed the home of Old Agony|Wren,
    who had been A-5-paragraph dissertation is simple to complete you would require at the least
    three specifics to begin the following section and you simply require the introduction paragraph, and
    least you can need a finish paragraph to finish it. This complete move is very simple at-first it might seem
    it is hard but than you'd become accustomed to producing 5
    lines dissertation since I will be performing a lot
    of them. Paul's cathedral created the house of Outdated Agony|Christopher
    Wren, who had been A conclusion must draw an essay together.
    Paul's cathedral|Wren, who had been the seventeenth century designer of St.
    Paul's cathedral|Wren, who was simply the seventeenth century architect An excellent
    essay publishing company supplies the greatest entrance essay, report,
    request essay writing support and help to its consumers on how best
    to create school essay. They know what their customers involve, plus
    they do everything they're able to in order to preserve them content.

    Joyce Tuesday, 27 June 2017 09:43 Comment Link

Leave a comment

Make sure you enter the (*) required information where indicated.Basic HTML code is allowed.

Latest News

Ethiopia to Host the 4th International Coffee Conference

Ethiopia to Host the 4th International Coffee Conference

Ethiopia is set to host the 4th International Coffee Conference from March 6 – 8, 2016 in Addis Ababa at the United Nations Conference Center. Previous conferences were held  in England in 2001, Brazil in 2005 and Guatemala in 2010. Read more

Tweets


ሰበር ዜና ብሄራዊ ባንክ ከነገ ጀምሮ የብር ምንዛሪ ተመንን በ15% እንዲገሽብ ውሳኔ አስተላለፈ፡፡ በተጨማሪም የገንዘብ ማስቀመጫ ወለድን ከ5% ወደ 7% ከፍ እንዲል ውሳኔ... https://t.co/fab8ZVRMVa

Breaking News National Bank of Ethiopia will depreciate the exchange rate of birr against a basket of foreign... https://t.co/1JPgVHEv1E
Follow EBR News on Twitter

Most Popular

  • 1
  • 2
Prev Next

The White-Box of Ethiopian Agriculture

The agricultural sector remains our Achilles heel, nonetheless, we remain convinced that agricultural-based development remains the only source of hope ...

Read more

For Whoever Has, to Him Shall be Given …

As the Ethiopian government seeks to transform the economy into one that’s rooted in manufacturing, the simplicity for local investors to access finance...

Read more

Commentary

  • 1
  • 2
  • 3
Prev Next

Shooting in the Dark: The Anomalies of Headhunting

The war for ‘heads’ – also known as talent – has been raging for many years and the manner headhunters ‘poach’ people is getting tougher ...

Read more

Understanding Chinese Investment in Ethiopia A Critical Evaluation of the World Bank’s “Chinese FDI in Ethiopia” Survey

The World Bank country office in Ethiopia, apparently in response to the request by the government of Ethiopia, has conducted a survey of...

Read more

Mitigating Growing Income Inequality: What Needs to Be Done

Rising income and wealth inequality in many countries around the world has been a long-term trend for three decades or more. But the atte...

Read more

View Point

  • 1
  • 2
  • 3
Prev Next

Delivering Life Insurance: The Untapped Market in Ethiopia

Modern insurance transaction in Ethiopia was started by an Egyptian Bank in 1905. According to Ethiopian Chamber of Commerce there were 19, 33 and 40 insuran...

Read more

Headache When a Key Personnel leaves a Company in the Financial Sector

The financial sector in Ethiopia has undergone considerable changes in recent decades. The dramatic rise of new market players into the sector has vividly al...

Read more

Women and the World Economy

In many countries, public debate about gender equality focuses mainly on women’s access to top positions and high-powered career opportunities. But the “glas...

Read more