this article is about WorldCup and Football!please help me!!!this is my homework.
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The FIFA World Cup soccer tournament has put the focus on South Africa, a unique nation that teeters between the First and Third Worlds, while struggling to develop a new identity two decades after the fall of Apartheid.
While the televised soccer matches will provide the country with unprecedented global attention, what will the tournament mean for South Africa's economy?
Generally speaking, the World Cup is unlikely to provide a significant immediate boost to the nation's economy (aside from a sudden spike in tourism-related businesses and temporary construction jobs). However, given the massive amount of money the government has spent to build Cup-related infrastructure (roads, rails, stadiums, etc.), lasting benefits may accrue – in the form of increased foreign investment and more permanent jobs, among others, -- well beyond the end of the games.
A report by UBS Investment Research (from February 2010) estimated that preparation for the World Cup – which commenced four years ago – has added between 0.5% and 2.2% to South African GDP (depending on which infrastructure projects one considers); and overall had created in excess of 300,000 jobs since 2006 – a 2.7% contribution to employment figures.
UBS research also indicated that the three previous World Cup hosting-countries saw their GDP grow by 1.8% on average during the year of the tournament – although determining how much of the growth was associated with the tournament itself is very difficult to ascertain and likely falls well below this number.
As an emerging market, the economic backdrop in South Africa remains fragile and somewhat risky, but filled with great potential.
According to Marie Antelme, an analyst for UBS in Cape Town,
South Africa emerged from recession in the third quarter of 2009; and real GDP growth accelerated to 4.6% in the first quarter of 2010 from 3.2% in the fourth quarter of last year.
“Inflation continues to fall, driven mainly by easing food inflation,” she said. “A widening government primary deficit has put pressure on government debt levels, which are now at about 30% of GDP. This remains low on global comparisons.”
However, unemployment remains high, having climbed to more than 25% in the first quarter of 2010, with over 800,000 jobs lost since the year-ago period.
The country's benchmark Johannesburg Stock Exchange All Share index has fallen just under 1.0% year to date.
While many outsiders associate South Africa with the mining industry, that sector is diminishing in overall importance and presently accounts for only 5% of the economy. Of that portion, South Africa's world famous gold mining operations represent only 2% of total employment.
“South Africa is predominantly a services-driven economy, with 62% of GDP coming from the tertiary sector,” Antelme noted. “The services sector dominates employment, accounting for 60% of total employment – including domestic workers.”
Manufacturing -- largely oil, vehicles and basic metals -- accounts for another 15% of the economy.
With respect to the global financial crisis that ignited in 2008, South Africa's banking system was not heavily affected by the crunch, as existing exchange controls limited both the banks' and households' exposure to international financial markets and loans.
“The banks did, however, aggressively grow their loan books during the 2004-2007 credit boom, and this resulted in a sharp increase in non-performing loans over the past year,” Antleme noted.
As for how some young men playing soccer will affect the nation's economic long-term; the answers may not be readily apparent.
The key questions about a post-World Cup South Africa: will South Africa be regarded as a place that is opportune for foreign investment and to do business in? Will there be legacy benefits for tourism which could support employment? Will the event build national spirit?
Antelme notes that the World Cup's economic cost/benefit spans the last 4 years, from when construction started on the first stadium in September 2006.
“The government has spend over 40-billion Rand on stadia and associated transport,” she said. “If additional projects, such as the Gauteng roads project or Gautrain are included, then this number rises fast. The economic benefit mostly accrues during the preparation phase and it comes mostly in the form of the increase in gross fixed capital formation, and associated job creation, largely but not only, in the construction sector.”
The longer-term economic benefits of the Cup itself are difficult to measure – but there is indeed a fiscal cost to hosting the event, which hopefully will be offset by an increase in spending by foreign visitors during the tournament.
But will those foreign investors keep coming to South Africa after the last ball has been kicked into the net? That may depend on how trouble-free and successful the games are.
“If there is no crime incident which mars the tournament, the country will have been showcased to the widest possible audience as a key tourism market,” she added.
“It is unlikely that tourism will pick up immediately, but certainly there should be an increase which evntually follows. An additional benefit is the experience gained and coordination that has been required within the domestic tourism industry which should enable it to function more efficiently than in the past.”
In addition, some positive economic benefit may also accrue as consumer confidence is buoyed by a successful tournament, but this will only be seen as the data emerges, Antelme noted.
Of course, in a country struggling with widespread poverty, unemployment, HIV/AIDS and rising violent crime, some have raised objections with the cost of the tournament; and questions will likely linger over whether the money could have been better spent.
“Certainly there is a dire need to improve service delivery, increase low-cost housing, but there is no guarantee that the full amount spent on the World Cup would have gone efficiently or effectively into these projects,” Antelme added.
The benefits and disadvantages of holding major sporting events have few clear answers – aside from the positive psychological boost it may provide for local inhabitants. In the U.S., cities which host such tournaments as the World Series and Super Bowl have historically received very short-term economic gains. South Africa, however, can arguably reap tremendous benefits – both financial and in terms of international goodwill – by making certain the World Cup presents the country as safe, peaceful, modernized and a viable target of foreign investment.[/B][/B][/B][/B]
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