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Smarter play: Investments in education and technology will pay dividends long after stadiums have fallen into disuse.
Chinas debut as an Olympic host was hardly the unqualified public relations nightmare that many people expected, especially after the Tibet riots and the subsequent torch-tour fiasco. If Chinas goal was simply to host a fantastic Olympics, its $40 billion was well spent. In terms of sheer spectacle, impressive facilities, and the host countrys athletic performance, the games were without peer in Olympic history. But if the goal was to change international minds about China, its success was mixed at best.
With the deceptions during the opening ceremonies, the arrest of eight American demonstrators, and Chinas failure to keep its promises about political openness, the Olympics have only reinforced the conventional view of the Chinese state as capable of outstanding feats of organization and social engineering, but also secretive, repressive, and hostile to basic human rights.
In the coming years, a number of emerging economies will follow China in using international sporting events to make a statement about their new global status. They will likely find that these events often do more to highlight their countrys lingering weakness than showcase its progress. The 2010 World Cup in South Africa is the perfect example: Unless the country can pull off a miracle, South Africas own coming-out party has the makings of being an international sporting disaster, a far riskier proposition for the host countrys image than the Beijing Games ever posed for China. Indeed, South Africas bid is already in danger of showing why gargantuan global sporting events are the worst way for emerging economies to show off to the world.
With strong backing from national patriarchs Nelson Mandela and Desmond Tutu, soccers governing body, FIFA, announced three years ago that South Africa would be the site of the 2010 World Cup. It will be the first African country ever to host the Cup, or any global sporting event near its size. What better opportunity could there be for Africas leading economy to introduce the world to the enormous economic and social progress the country has made since the fall of apartheid? Yet even South Africa and FIFA are now second-guessing that decision.
As they should. Construction of the five stadiums that the country is spending more than a billion dollars to build is far behind schedule, hampered by shipping delays and a lack of skilled engineers. South Africa has already admitted that the stadium in Port Elizabeth will not be ready for next Junes Confederations Cupan Africa-only soccer competition that is considered a dress rehearsal for the World Cupand several other sites will be cutting it close. This months nationwide mine strikes are liable to worsen the delays.
South Africa is also in the midst of an electricity crisis caused by the state power companys failure to keep pace with the countrys booming economy, which is currently growing at a roughly 5 percent clip. Rolling blackouts are now common in major cities and likely will be for the next two years. To guarantee power during the World Cup, the government might be forced to freeze major industrial projects.
Another worry is HIV/AIDS. Prostitution is sadly an integral part of any major international sporting eventdespite a clampdown, brothels reportedly did a brisk business in Beijingand thats a huge problem in a country with an 18 percent HIV infection rate. The city of Durbans recent proposal to legalize prostitution did little to assuage these fears.
But the biggest worry by far is violent crime. South Africa has one of the worlds highest murder rates, with more than 50 people killed each day. The world was shocked this summer by images of xenophobic riots in which 62 immigrants were hacked, beaten, or burned to death. A huge influx of wealthy fans would likely motivate criminals, even under the best of conditions.
South Africas pre-Cup jitters seemed particularly justified in early July when FIFA President Sepp Blatter admitted that there was a Plan B in the works in case South Africa could not be ready in time. Most South Africans reacted with outrage, but no doubt a few agreed with popular newspaper columnist Jon Qwelane that losing the World Cup might not be the worst possible outcome for the country. South Africa wanted to impress the world by staging a World Cup we did not need; we needed jobs, houses, first-class health facilities, good education, non-cut-throat food and petrol prices, and not a World Cup we could hardly afford, Qwelane wrote. Roll out Plan B, Mr. Blatter!
In fairness, South Africa still has a chance of getting the facilities constructed in time and has taken some constructive steps, such as introducing a program to hire 55,000 new police officers nationwide before 2010. Unfortunately for the country, the harsh media spotlight that accompanies a competition of this size means that the bar is set almost impossibly high. June 2010 could be the most peaceful month in South African history, but even one murder or mugging of a tourist will prompt reporters to ask whether granting such a dangerous place the right to host the event was a mistake.
And South Africa is not the only emerging economy that has bought into the false promise of global sporting events. Russia hopes the 2014 Winter Olympics will showcase its recent economic turnaround. But the Olympic site, Sochi, is just a 15-minute drive from a war zone in the breakaway Georgian province of Abkhazia. Two unexplained bombings recently rocked the Black Sea resort town.
Back in 2007, the chairman of Russias bid committee told reporters there were no questions on security now, and a top Kremlin official predicted that the Abkhazian conflict would soon be resolved. Russia is going to have to spend the next six years not only convincing the world that Sochi will be ready, but convincing countries that their athletes will be safe in the violence-plagued North Caucasus. That is, if Western countries seeking to punish Russia for the recent fighting in Georgia dont take the Olympics away first.
In 2012 new Europe nations Poland and Ukraine will co-host the Euro Cup and are already trying to explain away delays and corruption scandals. Brazils soccer confederation has drunk the Kool-Aid as well, promising that the 2014 World Cup will enable Brazil to have a modern infrastructure.
Theres little evidence, though, to suggest that investing in a major sporting event does much to help transform a countrys economy. Commentators now even commonly refer to an Olympic hangover when overheated economies decline after hosting the games. In fact, since 1956, Olympic hosts have seen their GDP growth fall by an average of nearly 7 percent in the two years following the big event.
The money that South Africa is spending on the five stadiums alone could have increased its 2008 healthcare funding by 3 percent, expanded education funding by 8 percent, or paid the salaries of 80,000 Johannesburg police officersinvestments that would undoubtedly have paid dividends long after the stadiums have fallen into disuse.
In truth, events like the Olympics and the World Cup are the farthest thing from appropriate showcases for economic progresstheyre more likely to highlight a developing countrys faults. Yanking a country like South Africa out of any historical context invariably emphasizes the areas where it falls short, rather than the progress it has made. Once the dazzle of a spectacular opening ceremony or high-tech stadium fades, the world will remember a developing country struggling with less glamorous challenges such as pollution, crime, and crumbling infrastructure. In the long run, emerging countries that bet their reputations on a sporting event may wish they had spent a little more time boosting their number of exports or college graduates rather than playing games.