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Goal-Oriented: South Africa Hopes World Cup Kick-Starts Job Growth
Published: 07/28/2006 – ES-US
THE WALL STREET JOURNAL – EUA – COPA MUNDIAL 2010
By WILLIAM ECHIKSON
SOWETO, South Africa -- In this township known for poverty and racial struggle, Phil Mogodi points to a dusty, empty field and sees a sparkling football-training center with 40,000 seats ready for the 2010 World Cup. Hotels, restaurants and shops soon will line Soweto's ramshackle streets, he says.
"Just imagine if Brazil or England makes this their training center," says Mr. Mogodi, chief executive of the Soweto Football Association. "It will transform our image."
South Africa will be the first African nation to host what is billed as the world's most popular sporting event, with the 2006 event televised in 211 countries and territories generating a cumulative viewing audience of 32.5 billion people.
The World Cup represents a big challenge for South Africa -- and an opportunity. In the run-up to 2010, the country needs to build four stadiums and renovate another two, including the Soweto facility, and tackle the problems of poor public transport and crime, but few doubt the event will be a success. Promoters hope the tournament will provide a boost of national confidence and cohesion to a country where, years after the end of apartheid, a rich minority of whites co-exists still with a mass of impoverished blacks. South Africans are hoping for an economic bonanza that will propel the continent's already strongest economy to new heights.
When South African journalists saw Germany's flawless rail systems, sparkling stadiums and peerless organization, many wondered if their homeland could manage such an event. Germany has an economy 25 times the size of South Africa's.
"In Germany, you could leave the stadium and be at the next stadium in two hours. In South Africa, it might take two days," says Tony Twine, an economist at Econometrix, a Johannesburg research institute, who is studying the economic impact of the World Cup tournament on the nation's economy.
Finance Minister Trevor Manuel said the country would spend about $5 billion for infrastructure in the next three years. About $1.2 billion will be spent for upgrading and building stadiums. Economists say these figures are realistic for a government with a strong fiscal position and an economy with about $200 billion in annual gross domestic product, a broad measure of economic size.
World Cup spending could lift the country's annual growth rate to 6% by 2010, up from 4% at present, creating 159,000 jobs, Mr. Twine says. In Germany, the figure was much lower: a 0.5% boost to GDP growth and 50,000 jobs created. While the Olympics has left host countries such as Canada and Greece with debt hangovers, Mr. Twine says the World Cups have produced less financial pain for hosts and costs are spread over an entire country, making it an economic benefit.
Soweto's Soccer City stadium, where the final match is scheduled, demonstrates the need for renovations and why the task seems manageable. The stadium holds 80,000 spectators and will be enlarged to 110,000 by building a two-story stand, making it Africa's largest. A total of 700 million rand, about $100 million, is budgeted.
"When I hear all this talk about us not being ready, I laugh," says Edward Williams, the stadium's logistics manager. "This stadium will be ready by 2008, two years ahead of the World Cup."
Security will be a headache. Although FIFA officials say the long distance from terrorist centers, combined with international police cooperation, limit the risks of international terrorism, local crime is an everyday worry.
Barbed wire rings homes in the city's wealthy northern suburbs. The impoverished downtown and townships are crime-ridden, including the Hillbrow neighborhood around a key stadium, Ellis Park. Police make an average of 60 arrests each day there.
Public transport and lodging are weak, dominated by unreliable trains and minibuses, forcing many visitors to rent cars or hire taxis. A $3.2 billion project for a high-speed-rail project connecting Johannesburg and Pretoria recently was postponed and won't be ready by 2010.
The Johannesburg region, site of five stadiums, has a chronic hotel shortage. Organizers hope to address the problem with a method developed at the last big event held here, the 1995 rugby World Cup. South Africans were encouraged to open their doors and welcome visitors into their homes, and they did so in great numbers.
While public transportation is lacking, the country does have a good network of modern highways: two run next to Soweto's Soccer City. In order to fight crime and congestion, large numbers of police officers are being hired and a maximum of a match a day will be held in Johannesburg, the host city, which suffers from the most traffic congestion.
"The real challenge isn't building stadiums or highways," says Michael Palmer, FIFA's director in South Africa, noting that four years before the event South Africa is well ahead of where Germany was in stadium preparation. "[The challenge] is to build a country, to make sure that all South Africans can participate and benefit from the Cup."
Small businessmen are planning for profits. March Maswansanyi, 38 years old, a taxi driver who lives in Soweto, hopes to launch his own chauffeur business to drive visitors coming for the tournament. FIFA's Mr. Palmer says he expects artisans and craftsmen to sell their wares outside stadiums and at fan parks. He also plans to offer some affordable tickets for poor South Africans.
Tourism could get a big boost. The country boasts kilometers of beautiful beaches and some of Africa's best game parks. Officials hope many visitors will stay on for a beach break or safari. "We hope to effectively promote South Africa to the world and make people stay here as long as possible," says J.P. Louw of the Department of Environmental Affairs and Tourism.
In the end, perhaps the riskiest aspect of the event will be the performance of South Africa's national football team. As host nation, South Africa automatically is assured of a place in the 2010 event. It failed to qualify for this year's tournament and has performed poorly in recent years.
---- Corey Boles contributed to this article.
Write to William Echikson at
