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The 2014 WORLD CUP: A FEW BILLION TOO many?

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Story by

Default profile picture Guillemette Cartier

Translation by:

Tom Gale

Brussels

The football World Cup is one of the most well known and popular sporting events on the planet. However, away from the matches, there is a whole system of actors in addition to the players and referee. The 2014 World Cup brings with it a number of positive and negative economic impacts, from which multiple contradictory conclusions have been drawn.

The World Cup has cer­tainly brought its share of prob­lems to the Brazil­ian econ­omy, but a num­ber of pos­i­tives can also be found. This has been one of the most lu­cra­tive World Cups in his­tory: FIFA has pock­eted 4.2 bil­lion dol­lars (2.5 bil­lion in TV rights and 1.7 bil­lion in spon­sor­ing). The Word Cup has also brought more than 3.7 mil­lion tourists to Brazil, gen­er­at­ing some 9.2 bil­lion dol­lars (or about 2,500 euros per tourist) in tourist rev­enue. The World Cup has also helped to lower Brazil's un­em­ploy­ment rate by cre­at­ing 3.63 mil­lion jobs. Dur­ing the con­struc­tion process, Brazil was able to mod­ernise its in­fra­struc­ture and in­vest in the building of new sta­dia. How­ever, these mod­erni­sa­tion pro­jects caused a num­ber of major in­con­ve­niences.

The con­struc­tion of the sta­di­ums fell be­hind sched­ule. These de­lays meant that the pro­ject sur­passed its ini­tial bud­get by 12.6%. The ini­tial es­ti­mate was 3.1 bil­lion dol­lars, but the final amount spent was 3.68 bil­lion dol­lars - an enor­mous over­spend! For ex­am­ple, the cost of the most ex­pen­sive sta­dium rose to 444 mil­lion euros and the cheap­est to 103 mil­lion euros. A num­ber of pro­jects in par­tic­u­lar were aban­doned due to over­spend­ing; re­tractable roofs and other hare­brained ideas fell by the way­side. Due to the de­lays ac­cu­mu­lated in build­ing the sta­di­ums in Cuiabá and Ma­naus, the Brazil­ian gov­ern­ment ex­ceeded its pro­vi­sional bud­get.

Dur­ing the con­struc­tion of these sta­di­ums, a num­ber of cities al­most pulled out of the pro­ject. The city of Porto Al­lègre, for ex­am­ple, threat­ened to with­draw un­less taxes were low­ered; the city was fac­ing se­vere fi­nan­cial dif­fi­cul­ties.

FIFA and the Brazil­ian gov­ern­ment have had to re­solve these se­ri­ous prob­lems. Meet­ings took place to de­cide on a "Plan B" to mit­i­gate the de­lays in the con­struc­tion of the sta­di­ums, but noth­ing came of them: al­most all the sta­di­ums built for this World Cup have been over bud­get.

It is thus pos­si­ble to claim that the or­gan­is­ers of this World Cup have not lived up to ex­pec­ta­tions: be­tween the sta­di­ums com­ing in over bud­get and the de­lays the losses are huge. This all points to a dif­fer­ent ques­tion: Could Brazil have spent all this money on some­thing more in­ter­est­ing?

Story by

Default profile picture Guillemette Cartier

Translated from Mondial 2014 : Quelques Milliards de trop ?