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South Africa hopes World Cup kick-starts economic growth

By CLARE NULLIS, Associated Press Writer
August 15, 2005
CAPE TOWN, South Africa (AP) -- When the World Cup comes to Africa for the first time in 2010, South Africa hopes an economic windfall follows.

Such promise, however, raises an important question: Who would really benefit from a bonanza in a country still bearing apartheid's scars?

South Africa last year won the right to the 2010 World Cup, beating Morocco and Egypt in a campaign bolstered by anti-apartheid icons Nelson Mandela and Desmond Tutu.

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Organizing chief Danny Jordaan says the soccer showcase will give Africa a chance to show it has evolved from a ``hopeless continent to a continent of hope.''

``We could see a huge charge for investment engagement in South Africa as a result of the World Cup. ... FIFA has a tremendous amount of confidence in the economy, political stability and the institutions of this country,'' Jordaan told a recent conference on the business potential of major sports events.

However, some say FIFA will be the main winner, taking the cream of the profits thanks to television rights deals worth an anticipated $2.2 billion and sponsorship agreements with the likes of Adidas and Hyundai.

Butana Komphela, chairman of Parliament's sport and recreation committee, is concerned preference will be given to FIFA sponsors rather than local companies.

``The spin-offs are not as great as we thought,'' he told Parliament last week.

The organizing committee predicts the tournament will create 123,000 jobs -- a boon in a country saddled with nearly 30 percent unemployment. It predicts $2.7 billion in new investment and an additional $874 million in tax revenue.

Jordaan predicted about 350,000 foreign tourists flooding the country, compared with the 25,000 for the 1995 Rugby World Cup.

Soccer fans are expected to spend nearly $1.7 billion on merchandise, lodging, transportation and meals, he said.

Achille Mbembe, a researcher at the University of Witwatersrand Institute for Social and Economic Research, dismissed those forecasts.

``It's never as good as they pretend,'' he said in a telephone interview. ``They are overselling it, and some of their figures are totally irresponsible.''

Mbembe said the 2002 World Cup in Japan and South Korea showed that job creation forecasts were vastly overestimated. He said tourists who would otherwise have visited South Africa would likely stay away to avoid soccer crowds, and anticipated gains at hotels and restaurants would be mitigated by people staying home in front of the TV rather than eating out.

The construction industry most likely would be the biggest beneficiary, he said. But in a country where millions lack decent housing, schools, electricity and running water, organizers want to avoid excessive spending on arenas that will fall idle after the tournament.

Organizers hope to keep the cost of the proposed 10 stadiums to $390 million -- one-tenth of what was spent in Japan and South Korea -- by refurbishing existing venues where possible.

Even Mbembe agrees the World Cup will boost investment and tourism long term -- provided South Africa is well organized and takes advantage of the two-month global spotlight.

``If, through the World Cup, we manage to change the way Africa's face is seen, and our voice is heard, that would be the biggest benefit of all,'' Mbembe said. ``We stand for humanity and racial reconciliation in a world where terrorism and violence are the order of the day.''

South Africa wants to capitalize on its status as World Cup host to stage the 2011 Rugby World Cup and win a spot on the Formula One racing calendar.

``Formula One management demonstrably want it to happen,'' said David Gant, chairman of the F1 bid committee, which wants Cape Town to host annual races between 2009 and 2015 on a high-tech track proposed for wasteland near the airport.

``We can't grow more gold, diamonds or make more beaches. We have to optimize the utilization of them,'' Gant said. ``And one way is to attract more people to use these resources and fuel this economic growth.''