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09 March 2010

The legacy of the 2010 World Cup

Human Sciences Research Council (HSRC)
Press Release

With 100 days to go before the FIFA World Cup, many questions are being asked about the legacy the event will leave behind. Dr Udesh Pillay, author of the recent book Development and Dreams: The Urban Legacy of the 2010 FIFA World Cup, has concluded that while the event will leave behind many positives, the economic (or harder development) benefits tend to be slightly overstated:

(i) contribution to GDP is predicted in the region of between 0.2% to 0.5%

(ii) 150 000 employment opportunities (and not jobs per se) were created for a short-period of time, most temporary in nature, with little skills transfer

(iii) increased trade and investment flows have yet to materialise

(iv) the boost to tourism is unlikely to exceed 0.5% of GDP

(v) local ticket sales currently stand at only 11%; if this does not pick up appreciably, a lot more foreign tourists (than the 450 000 expected) will be required to purchase tickets so as not to compromise a key revenue stream

(vi) heightened levels of imports for the event (raw materials like cement, steel, plastic, fibre optics, cables, and so forth) without commensurate growth in our export trade has widened the current account deficit (our largest measure of trade in goods and services) to close to 5% of GDP at present, and

(vii) the event will not help to significantly mitigate poverty nor accelerate levels of service delivery, as longitudinal studies have attested.

So, overall, the material benefits seem to be circumscribed. On the other hand, the more pronounced material or tangible benefits (both of which will serve the country’s economic interests well in future) will be the development of an integrated public transport system and expedited investment in infrastructure (ICT, ports-of-entry upgrades, improving infrastructure in the service industry, and so forth). It is also worth noting that a 0.2% to 0.5% contribution to GDP, while small, is not entirely insignificant given that our economy contracted by 1.8% last year (2009). The 0.5% contribution that tourism is predicted to make to GDP, given a South African economy that is only now beginning to rebound, is also not insignificant.

It is, however, unfair to assess the potential of the event in zero-sum terms, and/or simply in terms of the material legacy it leaves behind. The softer, more intangible and indeterminate legacy may be no less important, for example:

(i) the distinctly feel-good factor of the event, and the excitement it has engendered, which talks to the emotional pulse and mood of the nation

(ii) the potential the event has for nation-building, unity and social cohesion; and the sense of pride and patriotism that emerges (not unlike what occurred during the 1995 Rugby World cup)

(iii) a celebration of South Africa, and indeed Africa’s, competence and capability to host a mega sporting event of this magnitude;

(iv) the resilience and efficiency of our institutional arrangements required to make the event a success (like the LOC, the host city forums, national and provincial government task teams, etc)

(v) a sound project planning blueprint (at all levels of government), which augurs well for future mega-events and mega-projects (the latter to be expedited under the auspices of government’s R846bn infrastructure spending programme, like ESKOM’s recapitalisation)

(vi) the debunking of Afro-pessimism

(vii) an opportunity to celebrate South Africa’s (and Africa’s) diversity, culture, identity and beauty, and the place-promotion opportunities this engenders, and

(viii) the hope that the World Cup provides at a time in which we as South Africans are quite a fractured nation (stark levels of income inequality, increasing unemployment, persistent poverty, a lack of service delivery, political instability, a crisis of leadership, a breakdown of our moral fabric, etc).

Dr Pillay is an Executive Director at the HSRC and is available for commentary and interviews on Tel +27 (0)12 302-2528 and Cell 083 680 7356.

He has conducted the largest 2010 research project in South Africa spanning close to 5 years, and culminating in the publication of the book ‘Development and Dreams: The Urban Legacy of the 2010 Football World Cup” (HSRC Press 2009).