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Post-World Cup South Africa -
Did it help South Africa and not only its image

"This World Cup doesn't benefit anyone except a few soccer bosses"
Marcus Solomon (political prisioner with Nelson Mandela, was the leader of Makana Football Association)

The (economic) situation in South Africa

- Since South Africa’s transitional period, a new constitution was put in place in 1994
- The Republic of South Africa is now a sovereign, democratic state
- South Africa has a mixed economy with high rate of poverty
- Uneven distribution of wealth and income: ranked in the top 10 countries in the world for income inequality
- Study about the number of South Africans living below the poverty line: 56% "black", 27% "coloured", 9% "Indian", and 2% "white"
- Unemployment is extremely high: 23 - 25 % between 2009 and 2011
- Still no real "national identity" but many identities contributed to race and class
- Crime rates in South Africa are among the highest in the world
- Education: South Africa's Public education system is in serious decline --> dismal graduation, bad teachers, crumbling buildings
- Infrastructure: Electricity, streets, water pipelines and sewage plants cause problems and need to be modernised

The World Cup

- The 2010 FIFA World Cup was the 19th FIFA World Cup
- It took place in South Africa from 11 June to 11 July 2010
- The bidding process for hosting the tournament finals was open only to African nations
- In 2004, FIFA selected South Africa over Egypt and Morocco --> first African nation to host the finals
- The matches were played in ten stadiums in nine host cities around the country, with the final played at the Soccer City stadium in South Africa's largest city, Johannesburg.


Hopes and expectations

- Creation of jobs
- through the modernisation of 5 and construction of another 5 stadiums
- through road and infrastructure projects
- More foreign direct investment in South Africa
- Improvement of standards in infrastructure
- Transport and communication
- Huge increase in tourist sector
- during the World Cup
- a higher profile as an attractive tourist destination after the World Cup
- Image improvement and "nation building"

Facts about the impact of the World Cup on South African economy

Overall costs of the World Cup: 3.6 billion $

Creation of jobs
- About 130,000 jobs have been created since 2007 in the construction industry --> 70-80 per cent of these jobs were subcontracted positions typically lasting three months
- Building and Wood Workers International (BWI) research uncovered construction workers working for as little as US $1 per hour
- Workers at one of the hallmark sites, Moses Mabhida Stadium in Durban, embarked on an 11-day strike in 2007 in part due to unsafe working conditions
- South Africa’s unemployment rate was 24.3 percent in the fourth quarter of 2010, near the highest in five years. - - The Treasury expects the rate to remain above 21 percent until 2014
- Economists who have tried to quantify the impact of these occasions on job creation have found that there are almost no long-term employment benefits

More foreign direct investment (FDI)
- FDI inflows in 2008 $9 billion compared to $5.7 billion 2007
- However, FDI inflows were only $1.2 billion in the first quarter of 2009, a 79 % drop from the first quarter of 2008
- Compared with 2009, FDI inflows in 2010 has dropped 70 %
- Local traders have been barred from selling food, beverages, and soccer merchandise outside the stadiums
- Local factories were not even awarded the contract to produce the official mascot, Zakumi, instead, the work went to a factory in Shanghai

Infrastructure
- $ 2 billion were spent on infrastructure: many new streets and highways were built, airports and public transport (railroads, buses) were expanded
- New train connection between Johannesburg and Pretoria is a major improvement compared to the "mini-taxi"system existing before
- World Cup-related infrastructure spending is equivalent to ten years of housing investment
- For every seven seats in the new stadiums a fully equipped school library could have been built
- Country left with underused stadiums and facilities which are ruinously expensive to maintain

Huge increase in tourist sector
- 450,000 tourists were expected during the World Cup. Official statistics after the World Cup: 300,000
- Many South African entrepreneurs invested in hotel business but did not profit from it and cannot persist after the World Cup
- Government income through tourism was expected to be $ 800 mio, but was in fact only $ 420 mio.

Image improvement and "nation building"
- Overall the World Cup improved South Africa's Image
- South Africa has demonstrated it has the capacity and ability to take on complex construction projects
- The focus of the world's media attention has been on violence and the crime rate

Conclusion
- Main beneficiaries of the World Cup were FIFA and its sponsors
- The World Cup provided little direct benefit to the largely impoverished people of the country
- The money could as well have been spent on education, housing, security and the modernisation of the already existing infrastructure

For further information:

http://www.dominionpaper.ca/articles/3175

http://www.theglobeandmail.com/sports/soccer/the-worlds-game/after-world-cup-euphoria-fades-south-africas-poverty-will-remain/article1628165/

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRFbYA.VfNxA

http://news.bbc.co.uk/2/hi/8718696.stm

http://blogs.hbr.org/cs/2010/06/is_the_world_cup_good_for_south_africa.html

http://www.alternet.org/story/147278/the_true_cost_of_the_world_cup_in_south_africa

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