The world over, football (soccer) fans may be seen glued to their television sets as they engage in the triumphs and defeats at the FIFA World Cup 2014. Government authorities of the host country, Brazil, also appear to be pleased; they talk about how the football tournament is injecting life into their nation’s sluggish economy. However, analysts examining this event beg to differ.
On June 19, Vicente Neto, Head of Brazil’s tourism board, famously announced how the event has pumped in $15 billion and created 1 million jobs, that amounts to 15% of the overall job market. From their end, the government had already invested $11 billion in erecting stadiums and strengthening infrastructure. It also added $2 billion in enhancing security. In addition, they are investing billions of dollars to prepare the country for the Olympic Games that they will host in 2016.
However, experts believe that these jobs are only temporary and that the investment is barely 30% of what is actually needed for the country’s economy to thrive.
Another group of analysts fear that hosting such an event could boost Brazil’s inflation, public debt and social costs. Since November 2013, an average of 1 construction worker has died every month while working on construction projects related to this event. Also, the enhanced security does not seem to have given results; 420 muggings were reported aboard Rio de Janeiro buses in January 2014 as compared to 195 in January 2013. Also, while there will be an influx of football fans, numbers of other types of tourists will decline.
On the other hand, the qualitative value-addition is apparent. Brazil is seeing a rise in awareness about hospitality, technology, merchandizing, retail and media. Also, the infrastructure is here to stay. Forecasts have been made about the positive economic impact ranging from $3 billion to $14 billion, an addition of $30 billion to Brazil’s GDP in the 4 years leading up to it and an additional $8 billion in tax revenues. The country has witnessed a footfall of 6 million foreign visitors, who will spend at least $2,500 on average.
At the end of the day, hosting the World Cup can add a badge of honor and bolster the “feel good” factor amongst Brazilians. If all goes well, football fans may recommend the country to family and friends back home and boost tourism. The long-term effects of this decision remain to be seen by the world. Until then, let’s stay tuned to our television sets, sporting the T-shirt of the country we support and cheering in euphoria when it scores!