Economics - Holiday Homework !

8/8/2019 Economics - Holiday Homework !

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BY

EKUS SINGH


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INTRODUCTION

South Africas airports and borders have been busy over the last few weeks as hundreds-and-thousands

of visitors stream into the country for the 2010 FIFA World Cup.

According to the South African Department of Home Affairs, 682,317 foreigners entered into the

country between 1 June and 21 June 2010 compared to the arrival of 541,065 during the same period

last year. Over and above visitors from neighbouring countries, the largest number of foreign arrivals are

from the United Kingdom, USA, Germany, Australia, Mexico, Brazil, France, Netherlands and Argentina.

As the action heats up on the pitch, with the next round soon to start, this influx is only set to rise, with

major benefits for the future of South Africas tourism industry.

From a tourism perspective the World Cup has been fantastic exposure for South Africa, said

Thandiwe January-Mclean, CEO of SA Tourism. The World Cup has afforded South Africa the

opportunity to do away with stereotypes. Overall, the response from visitors has been one of surprise.Surprise at our infrastructure development, at the excitement of match audiences. All our feedback has

been positive, people are extremely excited.

SA Tourism is confident that the World Cup will open up the country to a whole new spectrum of

visitors.

The 2010 FIFA World Cup has seen an increase in visitors from new countries, namely the Latin

American nations such as Mexico and Brazil. This has been coupled with the implementation of the

international FIFA Fan Fests, at which over 900,000 people have been in attendance since the start of

the tournament. The highest television audience and international fan-fest attendance has been in

Mexico. We are promoting South Africa in those Fan Fests, said Roshene Singh, the chief marketing

officer of SA Tourism.

There will be new market opportunities after this tournament. With our track record of hosting major

events, sports tourism is important to South Africa. We are not relaxing, we are continuing with our

campaigns to convert awareness into visitors, continued Singh.


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One of the biggest talking points around large sporting events is the revenue generated from visiting

fans, and SA Tourism is confident that the tournament will be a success from a tourism revenue

perspective. We only have estimates at this point, but we are looking at around R27 billion, almost a

thousand percent of what we spent on marketing, said Singh.

Last year the South African economy benefitted from R100 billion in tourism spend. Globally tourismnumbers took a dive in 2009 - internationally there was a 4% decrease in tourism but South Africa

managed a 3.7 per cent increase. Although we have no official figures yet, we are confident we have

met the numbers we projected for the World Cup, said January-Mclean.

South African accommodation figures are also looking promising, with 65 to 70 per cent occupancy rates

in Johannesburg, while Cape Town and Durban are looking closer to 85 per cent. We will see an

increase in movement as we reach the knock-out stages, said January-Mclean.

South Africa is home to 6% of Africa's population, and produces 18% of the continent's gross

domestic product. It also boasts 45% of Africa's mineral production and 50% of the continent'spurchasing power.

The country's economic growth averaged 3% from 1994 to 2004, an improvement on the

average of 1% in the decade before 1994. Since 2004, growth has exceeded 4% per year,

reaching about 5% in 2005.

With the faster growth rate has come rapidly improving employment creation. In the last year

measured (to September 2005), around 540 000 net new jobs were created. Inflows of foreign

capital have been exceptionally high since 2003 - R80 billion (about US$13 billion) came into

the JSE share market between the beginning of 2005 and the first quarter of 2006.

Macroeconomic strategy

Since democracy, South Africa's economy has been subject to a process of structural

transformation. Policies seeking to promote domestic competitiveness, growth and employment

and increase the outward orientation of the economy have been implemented.

Government has also embarked on a programme of fiscal reform to restructure government

expenditure towards social services that will contribute to a better quality of life for all South

Africans.

In South Africa, the central bank maintains its independence from government. The bank has

embarked on a programme of inflation targeting, which has had positive outcomes; the realinterest rate has stabilised and the currency is able to fluctuate at competitive levels.

Business confidence now stands at a 13-year high, having followed a cyclical upswing since the

political reforms of 1994. All key macroeconomic indicators have improved over the past decade

and, since 1994, South Africa has experienced a surge in the registration of new businesses.

A sound environment


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The cost of doing business in South Africa.

South Africa's energy costs are among the lowest in the world. Eskom supplies most of Africa

with electricity, and is known for its superior supply quality. South Africa also compares

favourably in terms of petroleum prices. Private sector and multinational oil companies refine

and market nearly all imported petroleum products in southern Africa.

Telecommunications are becoming increasingly competitive, with the partial privatisation of the

telecommunications service-provider, Telkom, driving down the cost of international phone calls.

South Africa's unit labour cost is significantly lower than those of other key emerging markets,

including Mexico, Hungary, Malaysia and Singapore. In terms of the corporate tax rate, South

Africa ranks favourably against a number of developing countries who have tax rates higher

than 30%.

Three new stadiums were built for the mega eventand five older stadiums underwent major renovations.

Various operations as transportation, accommodation,

health services, logistics, technology & telecom.

Sales and promotions such as ceremonies and

cultural events, marketing etc.

Administration costs.


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Operations

35%

Sale and

promotions

16%

Adminstrati

on

15%

New

stadiums

34%


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Quick Hits-Revenue

FIFA, a non profit-making organization, said it

had made a $196 million surplus in 2009, as

revenues soared to $1.06 billion.

This is the highest revenue recorded ever in one

year in the history of FIFA.

Ticketin

g

56%

Sponsor

ship

14%

Broadc

asting

rights

30%


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Positive World Cup Implications for

AfricaFor a country that tends to be associated with images that embody the negative aspects of

humanity such as death, poverty, disease, and hopelessness, the 2010 World Cup brings an

overwhelming abundance of pride to, what may seem like, an otherwise desperate nation. Its

ability to host an event of this grandeur, puts South Africa and the entire African continent on the

global map in a positive context. Every person with a patch of land and a ball can play this


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internationally renowned sport. With that said, an otherwise meaningless game between two

children, becomes just as important as the World Cup Soccer final.

Negative Effects of the FIFA Cup in Africa

This world soccer tournament is currently estimated at costing $4.6 billion. In a country wherethe unemployment rate is twenty-five percent, this high expense may cause considerable

upheaval throughout the nation. While millions lack basic life necessities such as electricity and

clean water, FIFA and its corporate sponsors will reap the benefits of this multi-billion dollar

initiative.

Two reports of al-Qaeda threats have come to light; one against the Danish and Dutch teams

and the other during the game between England and Unites States. While the threats have

been made out to be rather insignificant by authorities, upwards of 55,000 officers are set to be

on the streets of South Africa. Each of the thirty-one participating nations will also have their

own special protection squads during the tournament.

The long-standing high levels of crime, including an estimated fifty murders a day, is suggested

to be deterring fans from attending the event. Fears such as this loom beneath the excitement

of the World Cup.

World Cup Hope for Africa

Throughout the city of Johannesburg, the continent of Africa, and, ultimately, the world, there is

a growing ambition that the 2010 World Cup will not only be momentous sporting event, but also

an image makeover for the host nation. FIFA President, Sepp Blatter is quoted as stating, "We

can all applaud. The victor is football. The victor is Africa."

hy is it that governments can find billions of dollars for global sporting events and little to

deal with the grinding poverty that affects impoverished populations? Canada applauded itself

for the $135-million in aid and disaster relief it sent to an earthquake ravaged Haiti while

spending nearly $6-billion on the two-week long Vancouver Olympics. A similar contradiction

is revealing itself in South Africa, where massive amounts of public and private spending on

the upcoming 2010 Soccer World Cup are expected to salve a faltering economy and crippling

poverty. Most South Africans, however, will see little direct or sustained economic benefit

from the games let alone muster the funds to even purchase a ticket.

What is trumpeted as a branding and investment remedy to South Africas economic woesmay very well become another Greek tragedy where the legacy of the 2004 Athens Olympics

has contributed to an economic meltdown. These global games offer dual incentives to both

local and foreign business elites and little to a frustrated local population. On the one hand,

investment, sponsorship and tourism opens new markets to foreign capital while local

business elites profit from a heightened global image. At least, this is the story sold by both

the state and World Cup planners. Central to this strategy is selling South Africa as a

marketable and consumable brand.


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The transition from apartheid to democratic rule in South Africa has been well documented.

During this period, the pressures of both domestic and foreign capital forced the emergent

African National Congress (ANC) government to follow the economic paradigms of the past

and encourage foreign investment. The sanctions that once crippled the economy gave way to

a period of increasing investment and relatively stable economic growth. Promoting a

comfortable and gentrified image of South Africa perfectly serves the ruling African NationalCongresss redistribution through growth policy that is intended to drum up foreign

investment while selling off government owned assets. The Soccer World Cup effectively

opens these economic and political spaces necessary to further neoliberal policies and

development.

The recent mobilizations against the 2010 Winter Olympics by members of Vancouvers poor

and indigenous communities indicate the contradictions of increasing corporate welfare

amidst economic recession and instability. The effect of the economic recession has taken its

toll on Canadians, but its most vicious impact has been reserved for the economies of the

developing world. In South Africa, unemployment, inequality and poverty have been greatly

exacerbated by the global recession. In late 2008, South Africa ended its decade longeconomic growth spurt. The economy shrank by 1.8% in the final quarter of 2008 and by 6.4%

in the first three months of 2009. A few weeks after replacing ousted Thabo Mbeki as

President, Jacob Zuma admitted, we have entered a recession.

Spectacle During Recession

The recent mobilizations against the 2010 Winter Olympics by members of Vancouvers poor and

indigenous communities indicate the contradictions of increasing corporate welfare amidst economic

recession and instability. The effect of the economic recession has taken its toll on Canadians, but its

most vicious impact has been reserved for the economies of the developing world. In South Africa,

unemployment, inequality and poverty have been greatly exacerbated by the global recession. In late

2008, South Africa ended its decade long economic growth spurt. The economy shrank by 1.8% in the

final quarter of 2008 and by 6.4% in the first three months of 2009. A few weeks after replacing ousted

Thabo Mbeki as President, Jacob Zuma admitted, we have entered a recession.

South African planners have estimated that the World Cup will contribute approximately $5.5-billion

(U.S.) to the economy and create 415,000 jobs, but these figures like the supposedly positive economic

impact of the Vancouver Olympics are ephemeral and unmeasurable. For the 50 per cent of South

Africans living below the poverty line the games will not lead to better housing, healthcare or

employment. Government and private sector rhetoric of global competitiveness has also had to face

the very real image of a South Africa still scarred by deep racial and economic divisions. The World Cup

is the playing field for many of the debates dominating South African currently: the nationalization of

mines and resource industries; land redistribution and privatization of energy and telephone services.


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This debate also reflects the bad blood and deep divisions between the ANC and its trade union and

communist allies. The international football body FIFA, and its corporate sponsors, want South Africans

to forget this debate is happening. Their belief that global games are beneficial to the world is not only

highly misleading, but it presents neoliberalism as the only solution to national economic development.

It asks the leading question: How would South Africans get better roads and sporting facilities if not for

the World Cup? Their discourse is hard to counter. Behind it are the powers of a world built upon power

relations adding the sexiness of sport gives great symbolic force to these unequal relations.

Selling Spectacle

Like Coca-Cola and Adidas both official sponsors of the World Cup South Africa is a brand. To foreign

investors and business elite, a stable rand and inflation rate are as desirable as a positive brand image

before the world. Like Clint Eastwood's Invictus, the complexities of ongoing struggles in South Africa

can be reduced to inoffensive pabulum and fed to global audiences. The dominance of the global market

in South Africa is now reified by liberal Hollywood spectacle. Globalization and brand recognition have

led many nations to market their identities as international brands. In fact, many developing nationshave little choice but to resort to these international spectacles to lure the brands and investment

encouraged by the IMF and World Bank. As Essop Pahad, former minister in the Presidency told the

2010 National Communication Partnership Conference: This event is about much more than sports it

is about Africa and Africas ability to host the world.

For one month an estimated 400,000 fans will descend on cities throughout South Africa, and millions

more will tune in to watch the largest sporting spectacle hosted, for the first time, by an African nation.

Beer guzzling soccer fans at World Cup stadiums will have no choice but to down American Budweiser

and Coca-Cola in terms with strict FIFA sponsorship rules. Fans will fill seats at stadiums costing over

$1.8-billion (U.S.) and travel on railways and roads specially upgraded for them. From this vantage pointthey will see the World Cups real winners: Adidas, Coca-Cola, Emirates, Sony, Hyundai, Visa, Budweiser,

Castrol Oil, Continental Tire, McDonalds, YingLi Solar and Indian IT supergiant Mahindra Satyam. In

addition, there are five national sponsors, which include South Africas largest bank FNB, British

Petroleum and the semi-privatized telecommunications company Telkom.

This spending in stadium construction and infrastructure renewal comes as the nation is experiencing its

first recession in seventeen years with GDP growth for 2009 now in the red at -0.3 percent. High levels

of private investment are supposed to dampen the negative impact of global recession, but as some

analysts have pointed out, the games need to do more than just ensure a short-lived tourism boom. If

public funds can be found to pad tourist seats, then funds can, and must, be found to deal with the

impact of low economic growth on the most disadvantaged sectors of the population. Township shack

dwellers, for example, whose numbers have grown by 50 per cent in the first ten year of post-apartheid

democracy, have little to gain from billion dollar stadiums.

For the embattled President Jacob Zuma and his fractured African National Congress, the World Cup

serves an invaluable political function. It is a diversion from the many unresolved questions of society,

such as increasing income inequality, rampant unemployment, the run-down health system, a national


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housing crisis and the presidents battered personal image resulting from his apparently unquenchable

libido.

To create a marketable image of South Africa, the national government and the International Marketing

Council of South Africa formed a 2010 National Communication Partnership. The group is working

closely with public relations firms across the continent to change the image of the continent from onewhich is perceived as poverty stricken and unstable to one that is stable, prosperous and proactive. The

Councils Brand South Africa strategy was most recently featured at the 2010 World Economic Forum

in Davos, Switzerland where it pushed South Africas role in influencing the global economic agenda

and building the countrys reputation as a trade and investment destination. The Brand South Africa

group is a private-public partnership made up of government and domestic business elites, some of

which are official World Cup sponsors.

The World Cup Local Organizing Committee chose Celebrate Africas Humanity as its slogan. While

these glib slogans are never truly intended to reflect the complex diversity of national culture see

Germany's A Time To Make Friends this slogan simplifies issues dramatically for viewers, investors

and tourists. As Local Organizing Committee chairman Irvin Khoza puts it: Africa is a continent rich in

resources. But its biggest asset by far is the warmth, friendliness, humility and humanity of its people. It

is not only South Africa being viewed, sold, bought and broadcast; the entire continent is, in the words

of Brand South Africa, open for business. Former president Thabo Mbeki hopes the event will send

ripples of confidence from the Cape to Cairo an event that will create social and economic

opportunities throughout Africa.

Selling Africa is tricky. Most African nations since independence have a shoddy record of upholding

human rights and democracy. A report in African Business says distressing images of suffering in

neighboring Zimbabwe are threatening the branding campaign of the World Cup. Blemishes like these

have led spin-doctors to roll out an image polishing campaign that makes situations like the national

emergency in Zimbabwe entirely separate from African development as a whole. When, in fact, they are

intricately linked. Thabo Mbekis policy of quiet diplomacy with Zimbabwe drew fierce criticism in South

Africa, and his inability to prevent a social and economic meltdown in the country has been blamed for

the masses of migrant Zimbabweans still streaming across the South African border. From a branding

point of view, says Dr. Nikolaus Ebert, the man responsible for branding the event, the greatest threat

to South Africas image is blowback the unintended consequence of an unsympathetic or cynical

foreign policy.

But as the Ugandan scholar Mahmood Mamdani says, South Africans have always seen themselves as

unique from the rest of Africa. Selling Africa means highlighting the successes of South Africaswholesale embrace of neoliberalism and distancing it from the unsavory actions of its neighbours. The

marketing and media campaign behind the World Cup will no-doubt seek to smooth out the

complexities of growth and development while framing South Africa as the success-story of African

neoliberalism. A glossy picture its neighbours should attempt to emulate.


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A national survey reveals that 74 per cent of South Africans are optimistic about the employment and

economic impact of the World Cup. But does this mean they will directly benefit from the billions

poured into the games from their own pockets? The record indicates the opposite. If the World Cup is to

bring any domestic benefits, it must serve the interests of ordinary South Africans before those of

Budweiser and Coca-Cola.

Global Games and Social Change

Media portrayals of South Africa have focused heavily on the alarming rise in violent crime in South

Africa and the daily-increasing rape and homicide rates (50 murders a day). Domestic and international

pressure to take action on violent crime before the World Cup was so intense that South Africa's chief of

police told Sky News that his officers should kill criminals if they came under attack. A British company

has even begun marketing a 2010 stab-proof vest for football fans visiting the country.

International concern has largely been for the safety of tourists and players visiting South Africa during

the tournament and not for those poor and disenfranchised South Africans who face violent crime while

living in dire poverty. Indeed, few commentators have asked what benefit the games will have for those

living in townships in sight of the new million dollar stadiums. Daunting economic problems remain from

the apartheid era particularly poverty in black communities, lack of economic empowerment among

disadvantaged groups, and a shortage of public transportation and housing. More than one-quarter of

South Africa's population currently receives social grants, leading some to label it the largest welfare

state in the world. South Africa has a 24 per cent unemployment rate with 50 per cent of the population

living below the poverty line. At the same time, the richest members of society have increased their

annual earnings by as much as 50 percent. According to the Gini Index a measurement of household

income inequalities South Africa has the second most unequal distribution of income in the world, just

behind its neighbor Namibia.

For these reasons ordinary working South Africans may see the billboards and advertising brought by

the World Cup, but they are unlikely to see the games themselves. The ticket prices to the big event are

likely to deter most of Africa's soccer enthusiasts. With 3 million tickets available, less than 100,000 have

been sold in Africa as most Africans are not able to afford the expensive entry fees. Chief Executive

Officer of the 2010 FIFA World Cup, Danny Jordaan said that it is the first time in World Cup history that

the host nation is not topping the ticket sales list. According to FIFA, the cheapest ticket will cost 55

Euros (570 Rand) for tickets that will entail the holder to sit behind goals. The cheapest ticket for the

final is going for 275 Euros (2,842 Rand).

At the bottom end of the economic scale, are those who will only be impacted negatively by the WorldCup. Like Cape Towns street sellers, who are reportedly being driven from the citys streets by police

and a private security company. Police also recently relocated 600 people who had been camping

alongside an inner city railway line in Cape Town to a transit zone on the outskirts of the city. While

Danny Jordaan has promised no evictions, the record is against him thus far. These forced relocations

draw on the legacy of apartheid era racial and spatial segregation. In this practice South Africa is not


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alone. It is estimated that the 1988 Seoul Olympics resulted in the eviction of 700,000 people; and the

2008 Beijing Olympics displaced 1.5 million residents.

Udesh Pillay and Orli Bass, researchers with South Africas Human Sciences Research Council, suggest

inequality may even be exacerbated by the hosting of the World Cup... There is no proof that the

hosting of mega-events will result in meaningful job creation. They argue that billions invested instadium construction and infrastructure renewal may not trickle-down as many politicians expect. The

success of the games will be measured not only in terms of how South African cities are made more

competitively global, but in terms of how an undertaking to the poor and indigent can be fulfilled.

Energy, Climate Change and Privatization

The cup will occur at a delicate time for South Africa's energy mogul, Eskom. The national energy utility

has warned that power cuts that have plunged millions of households into darkness for years could

continue right through to 2010. Eskom's power system will remain tight over the next five years with an

increased likelihood of power interruptions. This trend is set to continue at least until the first new coal-

fired base load power station is commissioned in 2011, the utility reported last year.

Eskom is the continents largest energy utility and is the primary source of greenhouse gas emissions in

South Africa. South Africa is also the biggest greenhouse gas emitter on the continent, with 73% of

African emissions. Coal is the major fuel source used by Eskom, and the utility used 94.14 million tons of

it in 2001. Eskom receives its coal at rock bottom prices because the high volume of supply contracts

awarded to coal companies allows them to sell non-export quality coal cheaply. Despite these high

emission levels, South Africa is already engaged in doubling its electricity generation capacity from coal-

fired power stations by 2025.

While Eskom avoided the large-scale privatizations that swiped many South African utilities from thepublic, it has consistently been on the neoliberal chopping block. Increasing electricity prices and

restructuring led to some 20,000 Soweto households being disconnected every month in 2001, until

resistance from militant communities rolled back the process. Access to water and electricity has

become a key struggle in South Africa's townships. One study conducted through the South Africas

Human Sciences Research Council found that an estimated 10 million people have suffered water

cutoffs and electricity disconnections under privatization, mostly because they couldn't afford new,

higher rates. Instead of selling off large chunks of Eskom, the government has moved toward partial

privatization of projects, which has been identified as a new source of funding in Eskoms search for

solutions to its financial woes.

The Congress of South African Trade Unions (COSATU) and the grassroots Anti-Privatization Forum (APF)

believe that electricity should remain publicly owned and controlled. The APF, which has actively

campaigned against electricity cutoffs, evictions, and supported workers struggles against privatization

in Johannesburg, has heavily criticized Eskom for doing nothing to bring basic electrical services to the

poor and for continuing to rely heavily on fossil fuels. According to COSATU, the privatization of Eskom


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would contradict the Governments previous commitment to enhance services for the poor and support

economic development.

The partial privatization of Eskom and the on-going debate over privatization and nationalization in

South Africa plays into the ideological battle being waged around the World Cup and within the ruling

African National Congress. Behind the rhetoric of global competition and brand identity, is the fact thatglobal capitalism has not delivered the goods for the vast majority of South Africas population. In the

townships outside Cape Town and Johannesburg, dreams of real liberation and even basic service

delivery have been put on hold while the country reintegrates itself into a neocolonial system that is

intent on draining further wealth from an already exploited continent. As the late political economist

Giovanni Arrighi commented, there may be little that most states can do to upgrade their economies in

the global hierarchies of wealth. Global games represent one option, but as his colleague John Saul

points out the fact is that Southern Africa simply cannot compete with more powerful capitalist centers

at playing their own game.

World Cup 'rebrands' South African economy

The World Cup has projected South Africa and its economy around the globe

The slogan Ke Nako, or "it is time", has been the catchy theme phrase of the recent

World Cup, promoting the idea of a South Africa ready and able to host huge global

events.

And generally the country was ready, leaving aside some transport glitches and issues around

Fifa's ticketing, as fans from 32 nations enjoyed the first World Cup on the African continent.

But is South Africa now ready for the post-World Cup economic challenges that face the nation,and can it carry forward the momentum created by hosting the event?

'Reputational boost'

"South Africans are very proud of what we have done here, it has been a fantastic event, from

an economic and a unity perspective," says Lee-Anne Bac, director at Grant Thornton Strategic

Solutions in Johannesburg.


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"Hosting the 2010 World Cup will radically alter the landscape for tourism in southern Africa.

More than 200,000 overseas fans visited South Africa for the

World Cup

"There has also been a reputational boost for South Africa that can help bring inward

investment and visitors.

"South Africa has been rebranding as a tourist destination and as one based around the

development of a global sports event business model."

Experts believe the country will directly recoup only about a third of the 40bn rand ($5.3bn;

3.55bn) South Africa has spent on stadiums, transport infrastructure and upgrading airports.

And while the initial estimate was for 450,000 foreign visitors, new figures from the home affairs

ministry suggest that 200,000 extra foreign World Cup fans arrived in the f irst three weeks of the

tournament.

'Tourist momentum'

But Grant Thornton is predicting that thanks to the World Cup there will be an extra 1.5 millionoverseas visitors between now and 2015.

They also envisage an extra 500,000 tourists from within Africa visiting by air, and an extra

200,000 overland tourists from within the continent, taking the overall additional visitors to 2.2

million.

The country wants to attract more conventions and conferences

"So we really believe there will be a tourist momentum moving forward," says Ms Bac.

"The tourism structures we developed for 2010 will stay in place, and the aim is now to attract

further events, conferences and conventions to the country.

"There has been media talk of attracting the 2020 Olympics, but events do not necessarily have

to be of that size."

For example, last week the inaugural International Sports Tourism Conference was held in

Johannesburg, and later this month the BMX World Championship will be held in KwaZulu-Natal

Province.


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'Good returns'

And many, including President Jacob Zuma, also envisage a lasting positive effect on the

economy through the recent development of national infrastructure.

Cash has been spent on infrastructure, including on stadiums like Soccer City

And Ms Bac says she has already noticed one potential economic benefit from the investment in

infrastructure.

"As a citizen of South Africa it has made commercial life so much easier with the new roads and

transport links, with less time wasted travelling and getting around," she says.

The infrastructure legacy of the World Cup also includes stadiums, airports, and informationtechnology.

"We can safely say that we have good returns on our investment, which includes 33bn rand

spent on transport infrastructure, telecommunications and stadiums," said President Zuma

recently.

The World Cup has brought more support across the communities for football... where

there has historically been a racial divide

Lee-Anne BacDirector, Grant Thornton Strategic Solutions, South Africa

He said investment in stadiums had created some 6,000 new construction jobs, and the securitydemands of the tournament now meant the country had an additional 40,000 police officers.

Meanwhile there have also been increased hotel bookings, car rentals and sales of World Cup

memorabilia (including the ubiquitous vuvuzelas) and sports items during the tournament.

Advertising is also set to benefit from increased spending.


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The South African Treasury had previously forecast the one-month tournament would add 0.4%

to GDP this year, while Grant Thornton is predicting additional growth of 0.5%.

The actual economic figures about the effect the World Cup has had will not be announced for

another few months yet, nor indeed will Fifa's or those of the local organising committee.

Training

But it is not all positive news: unions have been predicting an increase in unemployment,

particularly among construction workers and temporary staff employed at the 10 host football

grounds.

"Yes, the construction industry will suffer slightly," admits Ms Bac.

There may be a drop off in construction work post-World Cup

"But construction companies now have the World Cup work on their CVs and will be looking to

win more projects, and there is a new pool of construction talent.

"There are not going to be any more stadia built but there are other projects. For example theGautrain rail project still has to be built all the way to Pretoria."

And she said that the large infrastructure projects had provided training that workers might not

otherwise have had, which could only help the country with regard to future construction

developments.

She also said that many of those employed at stadiums worked for agencies providing

hospitality and other staff, and that these would now hopefully be contracted to other events.

'Problems'

However, unemployment in South Africa remains high, while many in the country still live in

poverty 16 years after apartheid ended.

South Africa, a country of 49 million people, has only five million taxpayers but 13 million people

who receive a social grant of some sort..


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Many South Africans live in homes with no electricity or

running water

"We have big problems in the country but not as bad as in some others," she adds.

"Yes there is still a large unemployment rate, and housing and other issues, but the World Cup

cannot solve all these problems.

"However by providing employment it has hopefully increased the taxpayer base, providing

more taxes which can then be spent on social needs."

And she says the World Cup has shown that in some areas - such as management of major

stadiums - South Africa still needs a "skills transfer" from international experts.

But while all ethnic sectors of the country can benefit from such international expertise, Ms Bac

acknowledges that post-World Cup "we need to equalise the skills factor of some sections of our

community".

In this regard she believes that the Black Economic Empowerment (BEE) programmes could

continue to play a useful role.

'Eye-opener'

Meanwhile, she says, the World Cup has been a "fantastic experience for South Africa" which

the country hopes to build on with advertising around the globe to attract more visitors to the

country.

The event has helped broaden football's appeal in South Africa


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"We have internationally-renowned cities - Cape Town, Durban, Johannesburg - and we have

got the infrastructure to carry the country forward," she says.

Meanwhile there has been an unexpected benefit for football.

"The World Cup has brought more support across the communities for football too, where there

has historically been a racial divide," she says.

"The tournament has been a real eye-opener for so many people in this country."


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One item which was seen with almost every visitor to a match was the

vuvuzela. This is a traditional South African instrument which was a craze

during the World Cup in 2010.

The handicrafts industry of S.A is certainly got a big boom with this

development.

Recently, the Chinese manufacturers also started manufacturing plastic

vuvuzelas.


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Economics - Holiday Homework !