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FIFA and South Africa: A Mismatch of Interests


Luis Fernando Arce, Staff Writer

Sourced from FranceCom

As the entire world knows, South Africa has just undergone an experience that is sure to have a myriad of effects on all aspects of society.  The FIFA World Cup, held for the first time ever in South Africa, has allowed the world to peek inside the doors of the country and see what it has to offer.

This opportunity, however, has shown itself to be a double-edged sword.

On the one hand there are obvious positive economic consequences for the country; but on the other, the attention has placed political pressure on South Africa, domestically and internationally, making it easier to gauge the efforts the government has made in terms of curing the social problems plaguing the country.

According to most government officials and private companies offering transportation, hospitality and tourist attractions, the figures expected to be raked in from the FIFA tournament are by all means positive.  Indeed, according to brandsouthafrica.com, an International Marketing Council for South Africa (under the executive authority of the Minister in the Presidency), the tournament is expected to bring in an estimated R93 billion gross throughout the year, with tourism accounting for 16% of the gross impact (that’s over US $12,311,162,650).  This translates to around 0.5% of the country’s expected GDP growth for 2010, which compared with the decline in the last quarter of 2009, seems very encouraging.

The Finance Minister, Pravin Gordhan, took the opportunity to say that every aspect of the country will feel benefited, from the telecommunications and transportation infrastructures to the thousands of new employees needed for the newly created jobs in the construction, service and security industries.

But even more revitalizing, according to the Finance Minister, is the potential foreign investment opportunities that have opened up as a result of all the media attention.  These benefits, he assures, are there but will be felt only “long after the players return home.”

However, despite all the positive hype, a large portion of the South African population are angry with the government’s spending priorities.

They ask where the billions of dollars used to build stadiums and accommodate FIFA personnel were found while money remained scarce for priorities such as poverty, AIDS and homelessness ran rampant.  Specifically, to hold the FIFA World Cup Tournament, South Africa shelled out over R18 billion (that is over US $2 billion) for stadiums and other costs, including accommodations and additional infrastructure.  The maintenance of each stadium is estimated at US $2 million a year.  At the same time, 40% of South Africa’s population is living on less than US $2 dollars a day or 60% under the poverty line.

Even more disgraceful is that much of the population living in the towns the stadiums were built in weren’t even able to afford access to the games inside them.

As a result, many South Africans participated in organized protests during the FIFA tournament to demonstrate their disagreement with the country’s FIFA spending.

Examples of these protests included ones that focused on the insignificant wages that the private employers have been paying their employees.  Although the stewards had been promised a payment of 1500 Rand a day by FIFA, according to what one of the protestors told the CBC associated press, they have only been given an eighth of that – 190 Rand a day.

One article in the Toronto Star, written by Craig and Marc Kielburger, the founders of Free the Children, reported that some workers were receiving even less than that, putting the figures at US $1 a day wages, as reported by Building and Wood Workers International.

Nonetheless, the South African government remains solid in its stance.

In the speech for the 2010 budget, the Finance Minister announced that there were roughly R907 billion to be allocated towards public assistance, with the largest sums going towards HIV/AIDS programmes (R5.4 billion), national and provincial health programmes (R105 billion), education (R165 billion) and infrastructure (R1.2 billion over three years).

The main issue, as such, stems from the fact that many South Africans seem to feel very little of the positive effects of the economy.  As a large part of the country dwells in slums, with over 30% of the population unemployed, it really is a wonder how the government was able to spend over six years of time and money in building stadiums rather than addressing the problem of unemployment more adequately.


The other problem has been in the government’s stubbornness to follow guidelines set out by world-wide organizations, such as the World Health Organization.  And although Avert.com, an internationally acclaimed AIDS charity, reports that in 2010 the South African government has finally taken significant steps towards complying with WHO recommendations regarding prevention of mother-to-child transmissions, there is still a need for better monitoring in regards to the collection of data and its quality, as suggested by the District Health Barometer.

In the end, the FIFA players, coordinators and fans are all packing to go home.  Only time will tell, whether the real effects of the FIFA tournament are felt on the country and its people.  Although the government has delivered its speech outlining the budget, it remains to be seen if the money will be properly allocated, properly employed and if indeed it will seep into those lives and communities most in need.

ARB Team

Arbitrage Magazine

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