{"id":21750,"date":"2011-06-12T10:01:04","date_gmt":"2011-06-12T08:01:04","guid":{"rendered":"http:\/\/www.whalecottage.com\/blog\/?p=21750"},"modified":"2011-06-15T10:41:52","modified_gmt":"2011-06-15T08:41:52","slug":"world-cup-anniversary-south-africa-was-ripped-off","status":"publish","type":"post","link":"https:\/\/www.chrisvonulmenstein.com\/blog\/world-cup-2010\/world-cup-anniversary-south-africa-was-ripped-off\/","title":{"rendered":"World Cup anniversary: South Africa was ‘ripped off’!"},"content":{"rendered":"

\"\"<\/a>It is interesting that a review of the advantages and disadvantages of South Africa hosting the World Cup, which started on 11 June last year, and particularly\u00a0the downside of this world event, is only emerging now.<\/p>\n

Yesterday we wrote about the tourism slump that has been caused by the World Cup.\u00a0In yesterday’s Weekend Argus<\/strong>, a very critical article was published, summarising the book to be published in September and to be\u00a0entitled “South Africa’s World Cup: A Legacy for Whom?”, written by Eddie Cottle, ‘regional policy and campaign officer for the Building and Wood Workers International, a global trade union federation’.<\/p>\n

Cottle is given a prominent space in the paper, and in summary he argues that “…the promises made about the benefits of hosting the soccer World Cup were nothing but ‘bald lies'”!\u00a0 His introduction is complimentary and gentle, praising the benefits of the event, in there being few technical hitches and little crime. The negatives far outweigh the event, he writes, and he says that South Africa fell for the ‘sales pitch’ of the positives of a mega-event, despite “…the volumes of academic studies on the negative impact of mega-sporting events such as the World Cup”.<\/em>\u00a0 He says that the promises made about the financial benefit that was the drawcard for\u00a0South Africa hosting the event, with its resultant contribution to the GDP, tax revenues and job creation, which was promised by the government, FIFA, the local organising committee and\u00a0tourism consultancy Grant Thornton, \u00a0were “…bald lies, wrapped up in the haze of developmental spin. There was no serious study of the opportunity cost of the investment to be made by the government; the impact on the environment; nor the contribution of the event towards the country’s debt position or the social costs of hosting the event.”\u00a0<\/em> He adds that the official economic report was kept secret, and not open to public scrutiny, because of the flaws\u00a0it contains.<\/p>\n

Grant Thornton made many projection errors, not just in overestimating the number of international visitors to the country for the event, but also in the expected expenditure of tourists while in the country, which was only 16 % of the estimated R55 billion.\u00a0<\/p>\n

The cost to the government for hosting the event was initially\u00a0estimated in 2003 to be a ‘mere’ R2,3 billion, but given an estimate of R7,2 billion tax revenue, the event was\u00a0packaged as generating profit.\u00a0 In reality, the event cost R39\u00a0billion.\u00a0This figure may not reflect the final cost tally.\u00a0 The Reserve Bank\u00a0estimated the cost to the state on capital formation to have been just under R130 billion, creating a deficit of R 63 billion.\u00a0 What is causing a large income hole is that FIFA took R25 billion profit made by the event out of the country without paying any tax!\u00a0It was the largest profit that FIFA has ever made out of\u00a0a\u00a0World Cup, Cottle states.<\/p>\n

South Africa was also misled by projections of the employment benefits of the World Cup, 695000 jobs to have been created, of which just less than half were estimated to be retained after the World Cup.\u00a0 This scenario proved to be incorrect, in that employment decreased by 5 % in the second quarter of 2010.\u00a0 The losses of jobs in the construction sector was even higher, at 7 %.\u00a0 Cottle says that as only a handful of\u00a0construction companies, including Aveng, Murray & Roberts, WBHO, Group Five and Basil Read, built the insfrstastructure for the World Cup, their\u00a0quotes were higher than required, a ‘grand theft’, he says.\u00a0 \u00a0<\/p>\n

South Africans were caught up in the spirit of the World Cup, and went on a spending spree using their credit cards, which they are feeling the after-effects of now, partly as locals were led to believe that things would be better financially as a result of the World Cup.\u00a0 Informal traders were moved out of their normal trading locations, on the basis of FIFA’s rules of a non-trade zone around stadia, impacting on the incomes of such traders.<\/p>\n

Cottle concludes: “Indeed, a considerable negative impact has been left through higher levels of both public and individual indebtedness, the high opportunity costs associated with the event, the displacement of local spending and the reinforcing of already high social inequalities in income among and within cities.”\u00a0 He states that the government’s decision to not bid for the 2020 Olympic Games ‘surely is a wise decision’!\u00a0\u00a0\u00a0<\/p>\n

POSTSCRIPT 14\/6<\/strong>: Southern African Tourism Update<\/strong>\u00a0 reports today that the Department of Sport and Recreation will request the government to re-consider the Olympic Games bid for Durban for 2020, before the bid deadline of September.<\/p>\n

Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com<\/a>\u00a0\u00a0\u00a0Twitter:@Whale Cottage<\/p>\n","protected":false},"excerpt":{"rendered":"

It is interesting that a review of the advantages and disadvantages of South Africa hosting the World Cup, which started on 11 June last year, and particularly\u00a0the downside of this world event, is only emerging now. Yesterday we wrote about the tourism slump that has been caused by the World Cup.\u00a0In yesterday’s Weekend Argus, a […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_jetpack_memberships_contains_paid_content":false},"categories":[124,528,22,21,11],"tags":[11865,11869,11873,11866,3561,11949,11864,1602,333,18,10684,530,11872,4545,128,11867,11870,5364,1323,32389,32388,11868,11863,1721,11871,531],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t