World Cup 2022: A cost-benefit analysis
The 2022 FIFA World Cup reached a crescendo when Argentina was crowned champion.
The sport of football has once more been successfully exhibited to a global audience and has again genuinely earned its moniker, the world’s most popular sport. In addition, the quality and talent of the current teams and players have presented onlookers with seemingly polished and rehearsed game patterns and individual skills. The beautiful game has been displayed in all its majestic splendour.
However, this World Cup in Qatar was different and more controversial than previous FIFA spectacles. First, the challenges of playing games in desert-tinged climatic conditions were equivalent to humankind squaring off against mother nature. Secondly, having a World Cup in the middle of the regular club football season was new. This World Cup has been well organised and implemented. Kudos to the project managers for solving this logistical nightmare. From all indications the 10-year (120 months)/US$300-billion preparation for the one-month extravaganza was an astounding success.
Many conversations have been had about the negatives and positives of a World Cup in the Middle East. Many acknowledged the exorbitant costs but agreed that the quantum was necessary for the timely preparation of venues and infrastructure. Then there were issues related to Qatar’s culture, religion, and climate. So the elephant in the room question becomes: What made FIFA bosses approve the small, desert country of Qatar over the likes of the USA, Australia, or Japan?
From the beginning the decision to play an intense football competition in Qatar was fraught with complications. The reality of a tiny, desert country with a miniature football culture was only offset by its seemingly endless stream of petro dollars. Unfortunately, the 2022 World Cup also evidenced FIFA’s governing body’s susceptibility to monetary influences.
Qatar is about the same size as Jamaica and consists mainly of flat, desert-type landscape. A World Cup would require building multiple stadiums, major highways, airports, localised infrastructure development, and providing thousands of hospitality solutions. The thought of staging a World Cup in such a venue must have sounded crazy to FIFA officials at first. However, with billions of dollars in reserve, Qatar understood the capitalistic nature of the principle money makes the mare run fast.
Petro dollars can solve many problems, including the alleged bribing of FIFA football bosses and affiliated countries. Some of the biggest names in football’s governing body have been tainted with charges of illegality. Top echelon personalities have been charged with several incidents of alleged fraud. Many FIFA member nations’ leaders have also been accused of conspiracy for financial gain.
As I write, boisterous debates are still being played out in the European Union Parliament as several member countries have been accused of vote manipulation in favour of Qatar. A vice-president of the EU has even been indicted. In addition, there are accusations of political and Government involvement among voting members. Ultimately, 50 per cent of the FIFA executives who voted for Qatar were fined, suspended, or indicted. Finally, the Qatar football boss, Mohammed bin Hammam, was banned for life.
Nevertheless, Qatar still got the World Cup.
Immediately after the successful bid, a Qatari company bought Paris Saint-Germain (PSG), a prominent French club. In short order a multi-billion-dollar airline acquisition deal was concluded between France and Qatar.
So what benefits are expected to accrue to Qatar from the presentation of the 2022 World Cup?
Of course, some primary benefits are intangibles relating to the game of football itself. Here new and exciting teams have been introduced, that is, Morocco and Canada, and unique talents are put on display, such as Ferran Torres Valencia, Timothy Weah, and Vinicius Junior. So the teams and players also benefit financially from FIFA, which boasts a prize pool war chest of almost US$500 million. The World Cup winner alone will pocket US$42 million while another US$200 million will be distributed between clubs to assist talent development. In addition, players will also benefit from their national associations.
FIFA projected a tournament cost of US$2 billion, revenues of US$5 billion, and profits of approximately US$3 billion in 30 days (US$100 million per day).
This is big business.
Another benefit of hosting the World Cup is the effect on employment. The project entailed hiring hundreds of thousands of local and migrant workers to prepare for hosting the most anticipated sports exhibition in the world. Many, therefore, benefited from employment opportunities and the recent introduction of a Worker’s Welfare Standards to protect and promote workers’ rights.
Qatar’s economy has also benefited from a tourism boost because of the tournament. The country braced for a million or more guests to attend the event. If the tourism authorities effectively promoted their product, many may become return visitors. The Qatar tourism ministry plans to increase arrivals from 2 million (2022) to 6 million per annum by 2030.
A recent article summarised how the need to provide the required temperature-controlled environment helped push scientific boundaries to develop air-conditioned and free-flow airstream systems. From all indications they were mainly successful, and temperature concerns at the World Cup were minimal. These technological advances in air-cooling science will benefit Qatar and provide a better future hospitality environment.
The most incredible benefits would come to the country’s economy by way of the multiplier effect of billions of dollars flowing through the recent stock exchange-listed companies.
It is estimated that Qatar has spent over US$300 billion to ready the country. US$300 billion over 10 years translates to US$2.5 billion per month. Compare this to the less-than US$15 billion total cost of the 2018 World Cup in Russia. Most Qatari funding went into stadiums, infrastructure development, public transportation, and hospitality. In the process they built a new city, a new airport, and a new seaport. Ultimately, these developments, especially infrastructure, if adequately maintained, will benefit Qatar in the short to medium term.
Most infrastructure projects will feed into the hospitality industry. Qatar hopes this will help present the country as the perfect holiday and investment venue. The parade of new hotels, malls, and retail shopping facilities in unison with local subcontractors will positively influence the country’s economy. In addition, construction and security companies are expected to gain a financial windfall. Also, in anticipation of the pending sports exposition and trending global demands, Qatar has used the opportunity to double its liquefied natural gas (LNG) capacity, making the country the most significant and cheapest in the region.
Qatar has projected that the World Cup will inject an additional US$17 billion to US$20 billion into its economy over one month. This will accelerate the country’s gross domestic product (GDP) growth, making it more competitive with neighbouring oil-rich states. However, many economic commentators worry that such dynamics may promote inflationary conditions throughout the region well after the World Cup.
This, in turn, may add to global recessionary fears in the face of increased oil prices from the said Qataris.
But what was the real cost of this massive human endeavour in preparing this small desert country to offer a First-World sporting treat?
The staggering mega cost of US$300 billion or more to upgrade infrastructure throughout the country has already been pointed out. We have also pointed out the supposed lack of integrity amongst the leaders of football when face to face with large sums of money for the under-the-table taking. The corruption and rampant fraud that enveloped the entire Qatar World Cup selection is a cost that FIFA will bear for years.
Added to this is the debate over Qatar’s human rights issues, especially regarding race and sexual persuasion. As usual, adverse race relations against blacks is a factor in many Arab countries and is evident in Qatar. However, adultery and sex outside marriage are considered crimes. In addition, minority groups like homosexuals are subject to criminal penalties, and women’s rights are restrained. Also, activities relating to indulgence in spirited drinks are limited. Many saw these obstacles as going against the grain of most established Western societal standards and that the actions of the Qatari would harm them.
Apparently this was a price the host was prepared to pay.
Another perceived cost to the football game relates to the potential injuries to players operating outside their regular seasonal schedules. As the biological clocks of the World Cup players reset, medical practitioners feared difficulties would arise when they slotted back into their traditional club-playing formats. Moreover, European and other professional leagues have been disrupted, and players’ workloads have deepened because of increased time constraints.
The medical fraternity concluded that players would face potential widespread injury risks.
Another significant downside of the Qatari experience was the alleged abusive treatment of thousands of migrant workers. Although employment is always welcomed, it must be noted that many of these jobs were of short-term duration. There are reports in The Guardian newspaper that up to 6,500 transit workers lost their lives trying to fulfil Qatar’s World Cup adventure. However, FIFA and Qatar responded that only 40 people lost their lives, with three dying of work-related causes.
Who do you believe is nearer to the truth?
Migrant workers represent about 90 per cent of Qatar’s workforce and consist mainly of South Asians. Accusations and charges of human abuse have been levelled at the Qataris over an extended period. Private investigations have uncovered impoverished living conditions and inhumane treatment of these workers. Several human rights groups are now lobbying FIFA and Qatar to provide a pool of “remedial” funds for migrant workers and their families. They are seeking an amount of approximately US$500 million.
The treatment of their migrant worker population is a black eye on Qatar, FIFA, and the 2022 World Cup tournament. However, the buck should stop with FIFA, which is responsible for ensuring workers’ rights are preserved. Or is FIFA again guilty of allowing money to muddy its ethical waters?
In the final analysis, world football may be threatened by immoral and unethical behaviour. Is it going to be business as usual in the future?
In conclusion, the strengths of Qatar’s 2022 World Cup seem to outweigh the weaknesses. But this will ultimately depend on an expected definitive report on the treatment of migrant workers. If the stories are confirmed regarding the thousands of deaths, then the 2022 World Cup was not worth it, and Qatar and FIFA should be sanctioned.
Additionally, many social commentators think the event’s price tag was absurd. Where does humanity draw the line between wanton expenditure and responsible spending for the social good? Is spending so much money on a 30-day sporting exhibition ethically acceptable? This money could go a long way in solving some of the refugee crises and sufferation facing countries in the mid-east region, such as Syria, Palestine, Iraq, etc. But, unfortunately, once again, the wealthy have dropped the ball.
The rich of the world do throw some peanuts at charity under the guise of philanthropy. However, billions are spent on exorbitant edifices, space tourism, or sporting programmes like golf and football.
But, as old-time Jamaicans would say, “When dog have money, him buy cheese.”
Rohan M Budhai is a tax consultant, writer, and history enthusiast. Send comments to the Jamaica Observer or mariobudhai@yahoo.com.