Both the Olympics and the World Cup are touted as major economic boons for the host countries. But, that doesn’t happen always. Barcelona certainly became the poster child of success in hosting a mega-event with its $10 million profit from the 1992 Olympics.

However, Greece’s billions in Olympics debt from the 2004 Athens Games expedited its bankruptcy and the 2016 Rio Olympics also experienced a $2 billion loss, just to mention a few.

In a 2016 paper in the journal Intereconomics, that supplements his 2015 book ‘Circus Maximus’, economist Andrew Zimbalist of Smith College in Massachusetts questions the economic rationale of hosting extremely expensive spectacles such as the Olympics, the FIFA World Cup or the UEFA European Championship and finds that mega-events are far from the economic engines they are perceived to be.

“Depending on the event and the host city or country, the actual economic outcome can range from significantly negative, to neutral, to modestly positive,” Zimbalist wrote.

What about Qatar, having little soccer history? As FIFA will take care of all operating costs budgeted at $1.7 billion during the one month of competition and the projected $4.7 billion revenue from international television, tickets, hospitality, and corporate sponsorships would also belong to FIFA, football’s governing body is expected to make a $3 billion of net gain. However, Qatar — having a GDP of approximately $180 billion in 2022, has spent at least $220 billion on hosting the World Cup — in bidding, building/renovating eight stadiums, transportation, hospitality, telecommunications, and security infrastructure. Thus, ever since Qatar was awarded the World Cup back in 2010, they have spent over 10 per cent of its GDP a year, on average.

Infra ‘white elephants’

Hosting an Olympics or a World Cup is often seen as a long-term investment for a country. It’s certainly advantageous if considerable existing facilities can be used, as the US could do in 1994 and Germany did in the 2006 World Cup. But, in most cases, substantial facilities incurring huge costs needed to be built. However, often the stadiums turn ‘white elephants’ afterward, requiring mammoth maintenance expenditures.

For example, built for the 1976 Olympics, Montreal’s ‘Big O’ stadium took 30 years to pay off in full, and it continues to cost $43 million in ongoing repairs. With about three million permanent residents, there’s reasonable concern about the infrastructure’s lasting utility in Qatar. In fact, several of Qatar’s stadium sites will be repurposed, and part of the arena will be given to an underdeveloped nation to help build sporting arenas. But, most of the newly built infrastructures like hotels, metro, new roads, a bridge linking Doha and Bahrain, increased hotel capacity, etc. would fail to contribute to the economy and lifestyle of the country subsequently.

The IMF predicts that Qatar’s economy will grow by 3.4 per cent in 2022 due to the World Cup, but then slow down to 1.7 per cent by 2024. Well, with an estimated 1.2 million World Cup visitors, Qatar may expect to reap nearly $1.5 billion in revenue from hosting. However, as 90 per cent of Qatar’s workforce are foreigners, the benefit from the creation of new jobs is inconsequential for Qatar.

Growing ‘soft power’ in terms of getting a more significant role in geopolitics should be Qatar’s other goal in organising the World Cup, for sure. But, there are a lot of controversies in Qatar getting hosting rights, its human rights issues, LGBTQ+ issues, and so on, and these didn’t really help Qatar to reap the full benefit of organising the World Cup.

On the contrary, the World Cup might have brought greater attention to Qatar’s human rights record — especially on the abuse of migrant workers.

Overall, Qatar’s World Cup benefit might be a tricky calculation that might result in a significantly negative output eventually.

The writer is Professor of Statistics, Indian Statistical Institute, Kolkata

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