Hosting a mega event like the World Cup or the Olympics has always been seen as a privilege, especially for developing countries. This may seem to be a positive step for developing countries, but there is much speculation in terms of the expenses and profits those games generate.
Games have been held in the past in developing nations such as China in 2008, India in 2010, and South Africa even hosted the 2010 World Cup. In addition, Russia is slated to host the 2018 World Cup and Brazil just recently held the 2016 summer Olympics. For those who don’t know, a World Cup in your nation would require million and millions of dollars, and world class stadiums and hotels for FIFA officials must be secured.
Also the choosing of host nations evolved so that the host country is now picked through vote by FIFA’s Council. Typically the vote is done seven to eight years in advance of the tournament. However recently the decision for the 2018 and 2022 hosts were done together.
The two developing countries that I will be discussing in this project, Brazil and South Africa, have many similarities. They are both considered upper middle income countries by World Bank and both are leading economic and political leaders on their respective continents. In 2013 the GDP of South Africa’s economy was 350.
6 billion USD, while comparatively Brazil’s stood at 2.246 trillion US dollars. The common thought is that a World Cup in your country will generate millions and most likely billions in revenue through tourism and pump money into the economy.
However, in Brazil despite having the privilege of hosting the cup, Brazil has not seen any real positive social or economic effects. Is anything, hosting the world cup did more harm than good for the economy of Brazil. According to the government, the world cup brought in $14 billion into the economy but Brazil could have been better off letting another country host. Although $14 billion was put into the economy, an estimated $11.3 billion was spent in total preparing for the cup.
Also, contrary to popular belief tourism didn’t pull in as much revenue as the government estimated. Because soccer is almost like a religion in Brazil, most of the match days were essentially declared municipal holidays. Many workers took days off and skipped work to watch the games, which left businesses understaffed and Brazil’s job creation in the month of June dropped to its lowest since 1998.