2010: mixed reactions on 'real' benefits, legacy

Finance minister Pravin Gordhan has reassured the nation that the world cup will add R38 billion to the economy. But the man on the street - who bears the brunt of social injustice and misery - is unmoved and is demanding to see immediate 'real' benefits.

Simply a PR exercise?

Some groups claim the tournament was simply a public relations exercise aimed at improving the country's international reputation, stating that the real legacy is of certain businesses making big profits and local football authorities pocketing huge bonuses.

So, was it really worth hosting the world cup? Many continue to ask this as the last foreign soccer fan leaves the country and stadiums stand empty and quiet.

Kay Walsh, senior economist at Deloitte SA, told Bizcommunity.com earlier this week: "The world cup spending helped South Africa through the recession - fortuitously, planning for the world cup was well underway when the global financial crisis hit. Spending was a good form of fiscal stimulus and helped to cushion SA from the negative impact of global recession."

Long-term perspective

Walsh, who believes that the impact should rather be analysed from a long-term perspective, said that hosting a tournament of such a magnitude without incident has improved SA's international image, and will help to promote the country as an investment and tourism destination.

"This is particularly true for SA, given our remote geographical location and underdeveloped tourism industry. We have much to offer as a destination and our tourism industry has the potential to create many sustainable jobs," she pointed out. "There is also an increased confidence of South Africans in their own country to deliver world-class infrastructure and events and an enhanced feeling of national pride."

A total of 1 020 321 million foreigners, mostly from African countries, visited the country 1 June-1 July 2010, according to the Department of Home Affairs. And the final tally is yet to be known.

Catalyst for development

But Walsh said SA will not have managed to 'break-even' in hosting the world cup in the narrow sense - that is, revenues received from foreign tourists will not cover the direct costs of hosting the event. Nevertheless, she said the event has left a legacy that will act a catalyst for development, explaining that infrastructure projects, including upgrading highways, airports and many more, will probably yield significant benefits to the economy in the long run.

"SA's infrastructure had lagged behind economic expansion since the 1990s. Certainly much of the transport infrastructure created ahead of the world cup, the bus rapid transit system, airport upgrades, road upgrades for example, will have a useful life well beyond the world cup and will promote growth and the smoother functioning of our cities.

"Broader economic benefits"

And regarding concerns that some of the stadiums will be underused during the post-world cup period, Walsh said international experience shows that it is indeed difficult to make a profit on stadiums in these circumstances. "However, I don't think that this type of investment should be viewed in a narrow 'financial return' sense but rather in terms of the broader economic benefits the world cup has [brought] and will bring to SA."

"While there is no doubt that spending on healthcare and basic service delivery is important, the world cup did not encroach on or 'crowd-out' the budget for these essential items."

The tournament has created 130 000 jobs, the finance minister said, without specifying how many of these jobs were permanent.