FIFA’s spending means World Cup is no longer the greatest show on earth

The recent passing of Nelson Mandela has attracted a wealth of positive press as the world rightfully rejoices in the wonderful story of a man who led the fight against apartheid and emerged from 28 years in prison to become South Africa’s first black Head of State. It is right to celebrate his own struggle and sacrifice in the journey towards the democratic, better South Africa the 95 year old has left behind.

He lived to see his country host a World Cup, something unimaginable during the oppressive years of Pieter Botha and latterly Frederik De Klerk, but what the aftermath of his death has also highlighted is the divided state the nation is still in.

Crime is significantly high, a quarter of the black workforce is unemployed and the currency, the rand, has fallen to a 4 ½ year low against the US dollar. Economic growth is forecast at 1.9%, a long way below the 5% officials say is required for a boost in employment figures.

It is 3 years since South Africa hosted the World Cup and the official legacy runs to just 20 artificial pitches distributed across Africa, with profits shared by the African football authorities. The South African FA is aiming to raise money to drastically improve the game and its facilities, planning to build one good all-weather pitch in each of the country’s 52 regions at a cost of £20 million a year across the next decade.

That figure however, is dwarfed by the sum South Africa actually spent to host the tournament in 2010, estimating a governmental cost of more than £2.7 billion. FIFA, who pocket the sponsorship and television fees, took a tax-free £2.2 billion back to Zurich at a profit of £394 million.

£687 million of South Africa’s spend in the build up to the tournament was on the construction or renovation of the 10 stadiums used in the finals, a few of which are now white elephants. The 68,000 seater Cape Town stadium, the costliest facility at 4.5 billion rand, cost 56 million rand to maintain across the last financial year but generated just 14 million rand, according to the city councillor.

Similarly, Durban’s Moses Mabhida stadium, having cost 3.1 billion rand to build, made a loss of 11 million rand throughout the 2012 financial year. Meanwhile, in Polokwane, the Peter Mokaba stadium boasts sales of 4 million rand, paling in comparison to the 10-70 million rand needed to maintain it, according to the stadium’s director, Ndavhe Ramakuela.

The redundancy of the facilities stretches further than just the stadiums however; Africa’s first world-class high-speed real network, built in Gauteng at a cost of 25 billion rand, overestimated passenger usage by over two-thirds and requires an 800 million rand annual subsidy while, according to Patrick Bond, the King Shaka airport in Durban is mostly “desolate” and a “fantasy land”.

That president Jacob Zuma is now forwarding plans to invest more than $100 billion into improved ports, roads and railways is indicative of the futility of FIFA’s money. Bond is a professor of development studies as well as a director at KwaZulu-Natal Centre for Civil Society and is outspoken against the World Cup in South Africa.

“A World Cup could be held at much less expense if Fifa looked at a society’s needs and did not fetishise luxury,” he says. “The tournament gave us a dizzy high, but the hangover, the inequality we have here and social unrest over economic problems, is brutal.”

Next to experience that dizzy high is Brazil, preparing to host the tournament 64 years since they last did so in 1950. Again, crime is rife with roughly 23.8 homicides per 100,000 residents and police brutality and corruption widespread but poverty, at just over 8%, and unemployment rate figures, at 5.5%, are much more sustainable. Brazil, at a GDP growth rate of 5%, is seen as one of the fastest growing economies in the world. However, in this past year, the country’s stock exchange has declined by 18% and the currency, the Brazilian real, has risen by 4% against the U.S dollar.

They see South Africa, who FIFA claim pocketed $5.8 billion into the economy after 2010, as an indication that the market will be even further stimulated, though it is the fear of a false legacy that is occupying the government as they get ready to play host.

“Several of these stadiums risk becoming white elephants,” Fabiola Dorr, a member of a team set up by Brazil to monitor spending, said in an interview. “It shows a total lack of planning. For sure, there will be last-minute contracts that further increase the cost.”

Brasilia’s 71,000 seat Estadio Nacional is the costliest arena at 1.5 million reals and on the eve of this summer’s Confederations Cup, played the stage to a public protest against the mistaken priority of public spending.

Latest estimates declare that 7.6 billion reals, 91% of the total construction costs and around three times the original estimate, will be borrowed from the public purse and will spiral the nation further into debt as Pedro Daniel, an economist at BDO Brazil, said building costs are as high per-seat as they were at the 2006 World Cup in Germany.

In June, 80,000 marched on Rio to show their antipathy towards the luxurious spending but FIFA, despite Sepp Blatter attempting to acknowledge their presence by warning “they should not use football to make their demands heard”, obviously haven’t listened as the cost of the group stage draw alone cost £8 million.

Furthermore, it is not just stadiums being built that is a worry, it is now training facilities as Germany decided that they were to construct their own base in Campo Bahia. Will it create an opportunity for a Brazilian based construction company? It will be funded by a Munich-based property firm. “It will be optimum for the team” said the entrepreneur behind the venture, but what about after that? He failed to say.

On infrastructure investment, Brazil spend just 1.5% of GDP from both public and private sources, below the global average of 3.8%. The total value of the nation’s infrastructure, ranked at 114th out of 148 countries by the World Economic Forum, is valued at just 16% compared to the other big economies who operate at 71%, yet for the World Cup the Brazilian public are footing the bill for £7.6 billion worth of spend.

It is best summed up by the prolific striker-turned socialist politician Romario; “Do FIFA care if Brazil has proper transport in the cities or a structural legacy? No. FIFA are just worried whether the stadiums will be ready on time.” he said.

“Who rules in Brazil today? FIFA. They come, put on a circus, pay no tax and take the profit. The greatest benefit from the World Cup will not be left to Brazilian people, but to FIFA, to media groups, to sponsors and to contractors.

I am not surprised that there were huge protests in the streets in the summer and I expect the same again. Our hospitals and schools are underfunded and there are huge social divisions, yet we are wasting billions of pounds of public money on mega-events, starting with the World Cup.”

Brazil’s decrepit infrastructure has been the scourge of the domestic economy for years, yet it is a sad indictment of the flash-pan money that FIFA’s tournament will provide that it is only now, with a World Cup looming, there has been a catalyst for public investment, yet it is not lost on the thousands who protested during the summer and Romario, in whom they have an unlikely spokesperson.

“It’s a big farce,” Christopher Gaffney, a Rio-based U.S. professor of architecture and urban planning who is studying preparations for the World Cup, has said “The only people benefiting from this are the big construction companies.”

FIFA’s decision to award the 2022 World Cup to the autocracy in Qatar has come under more intense scrutiny in recent weeks as the plight of Zahir Balounis and the poor human-rights treatment of migrant workers shone the spotlight on the disturbing Kafala system.

Though those problems remain small beans to football’s governing body who, with the Qatar pay-day waiting 8 years in the distance, are occupied with running a smooth, profitable tournament in Brazil. The authority, as has been proven in South Africa, will go to South America, take the money and quickly depart, leaving the Brazilian government to sweep up the financial mess left behind by the tournament they have paid so handsomely to host.

There will be no “human progress” or “social change”, just another instalment of FIFA’s vacuous, cash-making machine. Even if Brazil do win it for a sixth time, this time on home soil, South Africa are showing, as hosts, you don’t truly win.

 

Written by Adam Gray

Follow Adam on Twitter @AdamGray1250

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