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Why Hosting the World Cup 2010 Is a Losing Proposition for South Africa

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Organizers of the 2010 World Cup, which started Friday, are making the same error that backers of big sporting events always do — overpromising and underdelivering.

In 2008, the South African government said the global soccer tournament would create an estimated 695,000 jobs and have a gross impact of 93 billion rand ($12 billion U.S.) on South Africa’s economy. The government also estimated that the games would grow the country’s gross domestic product by 0.3% to 0.5%. “[T]he indirect spin-offs from improved perceptions abroad could have an even greater, longer-lasting impact, not only on South Africa and its development but on the continent as a whole. A successful World Cup will help change the perceptions that a large number of foreign investors hold of Africa ” the government wrote on its web site.

That’s quite a bit to expect from a soccer tournament. Economists are skeptical that the World Cup will meet those lofty expectations and history shows that it will most likely not. Indeed, FIFA, which sponsors the tournament, doubted that South Africa would be able to pull the games off and even created a contingency plan that would entail moving this year’s World Cup to the United States.

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