1 month pre-World Cup
14/5/10 22:48![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
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talkpoliticsThere's less than a month remaining until the start of the FIFA World Cup 2010, easily the first event of such magnitude to be held on the African continent. And naturally, everyone here is getting very excited. There was a post 5 months ago, which pretty much reflected the general excitement among the local populace and that of the international organisers of the event. And the progress of the preparations since then has given reasons for that optimism to be confirmed somewhat, even though the expectations are a little more sober and modest today than they used to be at first.
I guess this optimism, even in the face of some serious obstacles which the organisers encountered on the long way to 2010, could be attributed to a specific cultural feature of the SA nation, as explained in a broader sense in another post.
But i'd like to look at the issue from a more neutral point of view - as if thats possible in my case at all, being a former active football player on a semipro level, and simultaneously a SA-based expat, currently. But i'll try.
Every country has had its defining moments in history. For SA, it was 1994, the year of the first democratic elections, 4 years after the end of apartheid and the release of Nelson Mandela. 10 years later, in 2004, South Africa was again full of emotions and hopes when it was announced that FIFA had elected the wealthiest African country to host the WC'10. For a couple of years, SA expected to reach another pinnacle in its history and economy. Since then, the SA government has splashed billions of Rand (ZAR 1 = approx. $ 0.13) for the construction and modernisation of numerous sports facilities, airports, roads, railroads, etc. The labour market enjoyed a unprecedented boom due to the creation of thousands of jobs, which however were temporary and were duly terminated after those projects were completed. Today the country is still struggling with a 27% unemployment, and the average monthly salary per capita is 366 USD.
For example, in the years of preparation, SA spent $ 1.3 bn for building and renovating the World Cup stadiums alone. From my local perspective, 366 millon were spent for knocking down the old Greenpoint stadium here in CT and building the brand new, state of the art Cape Town Stadium. The urban railway in Jo'burg, the Gautrain, took 1.5 billion to build. The country also modernised 7 of its airports and another one was built from scratch (the King Shaka airport in Durbs). Consequently, the expenses for new infrastructure significantly increased SA's public debt, hoping that all this investment would garner a quick return.
But it turns out the expected "boom" is going to take much, much longer to come, if at all. With just a month remaining until the official launch of the enormous event, South Africans are beginning to realise that this is not the type of event which will bring them the fast return they were thinking about. One major reason being the fiasco with the unsold tickets for the matches (part of them had to be sold out to local fans at huge discounts), also the hotels remaining unoccupied because of the relatively limited number of tourists, etc. SA remains a too distant destination even to the wealthier segments of the market, those richer fans being turned off either because of the cost of the flights, or just because of the recent financial crisis (which, granted, did not hit SA as hard, but unfortunately that can't be said about many developed countries on whose tourism generating factor we're relying). Crime has also been a psychological factor to reckon, which has consistently thrown a smear on the country's image.
Estimates about the projected visits vary between 250 and 380 thousand foreign tourists for the 11 June - 11 July period (which is the duration of the World Cup), and thats way less than the 483,000 we were initially hearing.
The data shows that previous World Cups, like Japan/S.Korea 2002 and Germany 2006, had also failed to meet the initial economic effect expectations of the organisers. For instance, SK had forecasted a 2.2% growth of their economy due to the World Cup, while in reality that never happened. Germany had expected a 0.5% growth, while they eventually had to put up with just 0.25%.
But all this could really be a matter of the relation between expectations and possibilities, rather than organisational failures. It could turn out the situation ain't that bad at all - the reason being that South Africa's expectations had just been too exaggerated in the first place.
In reality, although the foreign visitors will definitely be fewer than expected, those who are going to travel to SA for the World Cup are actually going to stay for longer and they'll spend more coins. Grant Thornton assesses the average stay per person to be 18.7 days, and their average expenses $ 4,000. Which is 1/3 more than initially projected. If this assessment turns out correct, the cash which will enter the country is about 1.5 bn. That'd cause a 0.54% growth of the economy. Surely enough, if the forecasts for nearly half a million visitors had been right, the almost $ 2 bn income could've brought a 0.72% growth, but still...
On the other hand, juxtaposed to these numbers, the total expenses for the WC amount to roughly 7.5 bn (for stadiums, roads, other infrastructure), and thats still a huge number and the revenue does little to compensate it. The worse thing is that the public at large will have to pay for it, while...
...The really more important question is who's actually going to benefit from the World Cup. Both directly and indirectly. Because not everyone is bound to be hit by gold bars on the head. Surely, some will be more than happy, while others won't be that excited. Apart from being rather scarce, the golden rain will only shower on select few sectors of the economy - mainly tourism, transport and the hotels/restaurants biz. Meanwhile, other industries will potentially suffer. Mining for example, which carries the biggest share of the country's economy, will most probably be practically suffering directly during the 1-month forum. And that, after it showed some remarkable 4.6% growth in the middle of a world crisis (during the last quarter of 2009) - despite the weak global demand, the problems with staff security, the unfavourable rising of the Rand, and the increasing expenses for labour and electricity consumption.
The World Cup is expected with anxiety by the mining companies, who are the main driving engines of the country's economy. Because they're amongst the biggest electricity consumers. And the government requested that they cut their electricity consumption during the WC. The reason being the chronic energy shortage in the country (memories are still fresh of some severe blackouts in recent years). Some of the most affected industries will be the steel factories. This is related to decreased productivity, not only due to the above energy problem, but also because a large chunk of the staff will want to watch the matches during work time.
Curiously, the business is devising all possible ways to deal with the potential threat of losing its productivity during the World Cup. Some companies are making a list of the most exciting matches, marking their starting hour and the city where they'll be played; then they analyse the possible internal and external effects on their biz, and they adopt a flexible working time, in order to accommodate their staff to the match schedule.
The mentioned Grant Thornton company for example has already made a mini sports park for their football fans which is available in their office buildings, where the staff could go and watch the matches live, with all the necessary fandom paraphernalia. :) And companies which dont rely on excessive office presence, like automated departments and retail trade, will employ a more diverse shifts schedule.
All in all, the industries are doing their best to adapt to the new conditions while the whole country is gearing up for the huge event; and all these efforts done in a surprisingly efficient way, and wrapped in the typical positivism, despite all the tough issues that are still looming on the horizon: like the general crime background in the country (one of the most dreaded places on Earth, if you listen to the stats and BBC), and some organisational issues that need further polishing. A good example how a society could overcome tremendous obstacles to make something happen, when it comes down to it. Indeed, SA has had plenty of defining moments like that.
We shouldnt expect it to be the perfect World Cup, and no-one is really trying to achieve that. Whats for sure, its going to be pretty different from any previous World Cup in the past. Not just because of the cultural differences, the tremendous diversity of the place, the totally different atmosphere and the climate differences (remember that winter is just starting down here at the ass of the world - if you could call that real "winter" anyway). Its the spirit of the whole event, and the unique way Africans do everything that will add more spice to that.
And even if it won't bring real profit overall (expressed in money), its effects on the South African society will surely have a more long-lasting span than just the duration of the event. As well as those on SA infrastructure, on business, on local mentality if you like, and on the African continent in a more general sense. Add the reasonable expectation that the event would "stir up" an already vibrant economy a bit, as someone said in that first linked post over there - and this, at a very crucial moment global-wise - all of that is something to take into consideration before hurrying to jump in with the regular "WTF, SA sux, haha" remarks, based on little more than just a few talking points overheard from somewhere. ;)
Because in such cases, the truth is usually somewhere in the middle between the birds & roses -and- the gloom & doom.
I guess this optimism, even in the face of some serious obstacles which the organisers encountered on the long way to 2010, could be attributed to a specific cultural feature of the SA nation, as explained in a broader sense in another post.
But i'd like to look at the issue from a more neutral point of view - as if thats possible in my case at all, being a former active football player on a semipro level, and simultaneously a SA-based expat, currently. But i'll try.
Every country has had its defining moments in history. For SA, it was 1994, the year of the first democratic elections, 4 years after the end of apartheid and the release of Nelson Mandela. 10 years later, in 2004, South Africa was again full of emotions and hopes when it was announced that FIFA had elected the wealthiest African country to host the WC'10. For a couple of years, SA expected to reach another pinnacle in its history and economy. Since then, the SA government has splashed billions of Rand (ZAR 1 = approx. $ 0.13) for the construction and modernisation of numerous sports facilities, airports, roads, railroads, etc. The labour market enjoyed a unprecedented boom due to the creation of thousands of jobs, which however were temporary and were duly terminated after those projects were completed. Today the country is still struggling with a 27% unemployment, and the average monthly salary per capita is 366 USD.
For example, in the years of preparation, SA spent $ 1.3 bn for building and renovating the World Cup stadiums alone. From my local perspective, 366 millon were spent for knocking down the old Greenpoint stadium here in CT and building the brand new, state of the art Cape Town Stadium. The urban railway in Jo'burg, the Gautrain, took 1.5 billion to build. The country also modernised 7 of its airports and another one was built from scratch (the King Shaka airport in Durbs). Consequently, the expenses for new infrastructure significantly increased SA's public debt, hoping that all this investment would garner a quick return.
But it turns out the expected "boom" is going to take much, much longer to come, if at all. With just a month remaining until the official launch of the enormous event, South Africans are beginning to realise that this is not the type of event which will bring them the fast return they were thinking about. One major reason being the fiasco with the unsold tickets for the matches (part of them had to be sold out to local fans at huge discounts), also the hotels remaining unoccupied because of the relatively limited number of tourists, etc. SA remains a too distant destination even to the wealthier segments of the market, those richer fans being turned off either because of the cost of the flights, or just because of the recent financial crisis (which, granted, did not hit SA as hard, but unfortunately that can't be said about many developed countries on whose tourism generating factor we're relying). Crime has also been a psychological factor to reckon, which has consistently thrown a smear on the country's image.
Estimates about the projected visits vary between 250 and 380 thousand foreign tourists for the 11 June - 11 July period (which is the duration of the World Cup), and thats way less than the 483,000 we were initially hearing.
The data shows that previous World Cups, like Japan/S.Korea 2002 and Germany 2006, had also failed to meet the initial economic effect expectations of the organisers. For instance, SK had forecasted a 2.2% growth of their economy due to the World Cup, while in reality that never happened. Germany had expected a 0.5% growth, while they eventually had to put up with just 0.25%.
But all this could really be a matter of the relation between expectations and possibilities, rather than organisational failures. It could turn out the situation ain't that bad at all - the reason being that South Africa's expectations had just been too exaggerated in the first place.
In reality, although the foreign visitors will definitely be fewer than expected, those who are going to travel to SA for the World Cup are actually going to stay for longer and they'll spend more coins. Grant Thornton assesses the average stay per person to be 18.7 days, and their average expenses $ 4,000. Which is 1/3 more than initially projected. If this assessment turns out correct, the cash which will enter the country is about 1.5 bn. That'd cause a 0.54% growth of the economy. Surely enough, if the forecasts for nearly half a million visitors had been right, the almost $ 2 bn income could've brought a 0.72% growth, but still...
On the other hand, juxtaposed to these numbers, the total expenses for the WC amount to roughly 7.5 bn (for stadiums, roads, other infrastructure), and thats still a huge number and the revenue does little to compensate it. The worse thing is that the public at large will have to pay for it, while...
...The really more important question is who's actually going to benefit from the World Cup. Both directly and indirectly. Because not everyone is bound to be hit by gold bars on the head. Surely, some will be more than happy, while others won't be that excited. Apart from being rather scarce, the golden rain will only shower on select few sectors of the economy - mainly tourism, transport and the hotels/restaurants biz. Meanwhile, other industries will potentially suffer. Mining for example, which carries the biggest share of the country's economy, will most probably be practically suffering directly during the 1-month forum. And that, after it showed some remarkable 4.6% growth in the middle of a world crisis (during the last quarter of 2009) - despite the weak global demand, the problems with staff security, the unfavourable rising of the Rand, and the increasing expenses for labour and electricity consumption.
The World Cup is expected with anxiety by the mining companies, who are the main driving engines of the country's economy. Because they're amongst the biggest electricity consumers. And the government requested that they cut their electricity consumption during the WC. The reason being the chronic energy shortage in the country (memories are still fresh of some severe blackouts in recent years). Some of the most affected industries will be the steel factories. This is related to decreased productivity, not only due to the above energy problem, but also because a large chunk of the staff will want to watch the matches during work time.
Curiously, the business is devising all possible ways to deal with the potential threat of losing its productivity during the World Cup. Some companies are making a list of the most exciting matches, marking their starting hour and the city where they'll be played; then they analyse the possible internal and external effects on their biz, and they adopt a flexible working time, in order to accommodate their staff to the match schedule.
The mentioned Grant Thornton company for example has already made a mini sports park for their football fans which is available in their office buildings, where the staff could go and watch the matches live, with all the necessary fandom paraphernalia. :) And companies which dont rely on excessive office presence, like automated departments and retail trade, will employ a more diverse shifts schedule.
All in all, the industries are doing their best to adapt to the new conditions while the whole country is gearing up for the huge event; and all these efforts done in a surprisingly efficient way, and wrapped in the typical positivism, despite all the tough issues that are still looming on the horizon: like the general crime background in the country (one of the most dreaded places on Earth, if you listen to the stats and BBC), and some organisational issues that need further polishing. A good example how a society could overcome tremendous obstacles to make something happen, when it comes down to it. Indeed, SA has had plenty of defining moments like that.
We shouldnt expect it to be the perfect World Cup, and no-one is really trying to achieve that. Whats for sure, its going to be pretty different from any previous World Cup in the past. Not just because of the cultural differences, the tremendous diversity of the place, the totally different atmosphere and the climate differences (remember that winter is just starting down here at the ass of the world - if you could call that real "winter" anyway). Its the spirit of the whole event, and the unique way Africans do everything that will add more spice to that.
And even if it won't bring real profit overall (expressed in money), its effects on the South African society will surely have a more long-lasting span than just the duration of the event. As well as those on SA infrastructure, on business, on local mentality if you like, and on the African continent in a more general sense. Add the reasonable expectation that the event would "stir up" an already vibrant economy a bit, as someone said in that first linked post over there - and this, at a very crucial moment global-wise - all of that is something to take into consideration before hurrying to jump in with the regular "WTF, SA sux, haha" remarks, based on little more than just a few talking points overheard from somewhere. ;)
Because in such cases, the truth is usually somewhere in the middle between the birds & roses -and- the gloom & doom.
(no subject)
Date: 14/5/10 20:50 (UTC)(no subject)
Date: 14/5/10 20:52 (UTC)(no subject)
Date: 14/5/10 20:54 (UTC)(no subject)
Date: 14/5/10 20:56 (UTC)(no subject)
Date: 14/5/10 21:03 (UTC)...oh memories.
(no subject)
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Date: 14/5/10 21:15 (UTC)(no subject)
Date: 14/5/10 21:21 (UTC)And it is no surprise that the company you're launching next month will be dealing exactly with these 3 things, plus construction, EH?
(no subject)
Date: 14/5/10 21:28 (UTC)(no subject)
Date: 14/5/10 21:26 (UTC)I do know the fantastic legacy that the 1988 Olympics left here in Calgary. However while I play chess with people all over the world, I'd say 90% have never heard of Calgary before. So if you're expecting that the FIFA World Cup will garner the country a global respect or greater understanding, keep your expectations low. Granted, the World Cup has a larger global audience then the Winter Olympics, so what has proven true here may not apply in your case there.
We'll be watching the WorldCup here, hopefully in a social setting. (http://www.calgarysun.com/news/columnists/michael_platt/2010/05/13/13932096.html)
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and who isnt)(no subject)
Date: 14/5/10 22:47 (UTC)(no subject)
Date: 14/5/10 23:28 (UTC)I really wish the tournament is a massive success both economically and logistically. Africa always has at least one team putting up a good show, but continuity tends to falter and I'm keeping fingers crossed that perhaps the change of scenery will bring out their best game.
What I'm not looking forward to at all: the politics. My father once said that "there are interests too big for 22 players to decide on the field". Countries with internal struggles will momentarily forget their issues (Ivory Coast and Ghana in 2006) when their teams win. Similarly, something that would worry the hell out of me: a match between Japan, South Korea, or the US against North Korea (chances are ludicrously slim, but it illustrates the point).
(no subject)
Date: 15/5/10 06:20 (UTC)(no subject)
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Date: 15/5/10 11:02 (UTC)