Soccer World Cup: winners and loosers

Nobody can deny that so far the Soccer World Cup games in South Africa are a huge success. Of couse, here and there a few foreign visitors have been robbed (or shot), ticket sales continued to be a shambles, and there has been a considerable amount of ticket fraude, but such things are to be expected anywhere when such a large event takes place. Meanwhile South Africa leaves no stone unturned to polish up its image in the eyes of the world. Which makes complete sense - who wouldn't? And so far soccer fans are very enthusiastic about what they have seen of South Africa, and South Africa is even thinking seriously about 2020 and hosting the Olympics. The mayor of Durban even goes as far as stating that the world has finally realized that South Africa is a very safe country with modern infrastructure and little crime, where everyone is nice and tourists are being treated honestly.

So why could anyone have any justifiable criticism on South Africa's hosting of the world cup games?

Well - one good reason is that there is more than just soccer that makes the world go around. And the question is whether or not the money and resources spent on hosting the world cup games are being spent wisely.

Although the ANC optimistically expects a 0.3% economic growth as a result of South Africa hosting the world cup games, the average South African won't notice anything about it. It's mostly other countries that profit. FIFA, which makes off with most of the proceeds, has been amply discussed in recent previous posts in this weblog, so we can be brief about that. But there are many more cases of the money going right across the border, never to be seen again. Even that oh so very South African symbol of soccer frenzy, the vuvuzela, is made China, while the trainer of South Africa's national team Bafana Bafana is a Brazilian, who takes a fee of a whopping 1.8 million Rand per month (!) home to Brazil. (To put that into perspective: that is roughtly five hundred to a thousand times the average workman's salary in South Africa.) Also a significant portion of soccer fan's spendings go into flights to South Africa, which have been booked abroad and are only a small part of which reflects in revenues in South Africa.

Domestic spendings also rarely benefit the average South African. For a few weeks hawkers have done good business selling flags, caps, shirts and other soccer paraphernalia (made in China) but the market suddenly (and predictably) colapsed when South Africa was eliminated from the games in the first round. Soccer-related business on a larger scale (the building of stadiums, urban renovation, catching up on a decade and a half of road maintenance, t cetera) has been left to only a few companies (the ones with the right political connections) and meanwhile government officials have a ball with what was left of the taxpayer's money.

Meanwhile the bills continues to add up. While the soccer craze has caused many South Africans to spend way more than they can afford, many government projects have been shelved and especially the building sector (which is very much dependent on government orders) is in dire straits. Even worse: in Nelspruit (which the ANC insists on calling Mbombela these days) the municipality has spent so much money on hosting the soccer matches that they now have no money to pay wages and municipal workers will have to go without. Nelspruit, little more than an sleepy agricultural hick town with ambitions, has spent more than 140 million dollar (note: dollar, not Rand!) on a brand new stadium, but after having seen a handful of soccer matches and a few days of fans filling up the local bars, Nelspruit has gone quiet again and nobody really expects that the stadium, or Nelspruit, will ever see a major, well-visited sports event ever again.

While the proceeds in terms of goodwill are difficult to calculate, it didn't take accountants firm Grant Thornton very long to work out that of the $5.5 billion dollars that have been spent on new stadiums alone, no more than $1.7 billion can ever be expected in return, and that South Africa itself won't benefit significantly from any of it. Of course, the soccer matches have caused a huge peak in visitor figures - but there are lies, damn lies, and statistics. The 32% extra visitors are mostly from Lesotho and Swaziland (independent kingdoms that lie within South African borders) and from neighbouring countries Zimbabwe, Mozambique and Botswana - people who traditionally don't have much more (and often less) to spend than South Africa, and often lodge with friends or family. Worse: during the world cup games the regular hospitality industry has only suffered - hugely. Discouraged by noisy soccer crowds and hiked prices regular tourists and business travelers  stay away in droves, and the soccer fans themselves come to watch soccer and little else, and show nlittle interest in other tourist attractions, let alone in spending the night at tourist hotspots that are not in the immediate vincinity of a soccer stadium. And even there, during the soccer visitor peak, a significant percentage of the hotel rooms (which have been built in vastly overblown quantities) is left standing empty. After the world cup games are over this will only get worse, as the current soccer-related occupancy is of course totally insustainable.

Which brings us back to our initial question: can South Africa afford this extravaganza? The country has a considerable foreign debt which, for the moment, shows little sign of being under control - although the situation is stil far better than in, say, Greece. About half of the population has to live below the poverty line (defined at an income of $1.25 per day). Estimates of the actual percentage vary, because there are no reliable exact statistics, as many people living on the streets, in corrugated iron shacks or in cardboard boxes aren't registered anywhere. Official unemployment figures are over 25%, but here the same problem plays a role: literally countless people in South Africa do not appear anywhere in any official records whatsoever, so on paper they don't exist. Estimates of the actual unemployment rate vary from 40% to 60%. And not only black South Africans are affected - these days there are white shanty towns too, and they're not good. Other than that, South Africa has a record number of about 5.7 million people infected with HIV,
and while soccer fans have not been slaughtered by the dozen as some feared, the country is all but save and crime is a huge problem. The infrastructure (from roads and railways to the power grid and telecommunications) are in the process of collapsing.

So there is a lot that needs doing - important things; urgent things; things that South African citizens badly need. But during the past six years little has happened (except for the soccer venues and related visitor hot spots) because all attention and effords have gone to preparations for the soccer world cup. And there's no money left to do any of them now, either, because of the astronomical cost of hosting the games. And by now even the most naive have realized that the world cup is not going to bring in any money (recent estimates predict a loss of about 27 miljard Rand) and that the lasting economic benefits that the soccer world cup games were going to give us all is nothing but a fairy tale.