University of Technology Sydney: The economics of the FIFA World Cup 2022 in Qatar
Australia defeated favourite Peru to book a place in the FIFA World Cup finals in Qatar in November, thanks in large part to the antics of substitute goalkeeper Andrew Redmayne. Also known as ‘The Grey Wiggle’, Redmayne’s unorthodox technique of dancing on the goal line reminded his daughter and many other Australians of the popular children’s entertainment group ‘The Wiggles’.
Whilst for European, South American and African nations, soccer or Association football is the sport, in Australia, soccer is only one of four codes of football vigorously competing for players, fans and sponsors. So, making the World Cup for the fifth time in a row, and winning respect from the Peruvian press for qualifying across continents, is no mean feat.
Apart from Australia, only in USA, Canada, New Zealand and perhaps India does the national soccer team play second or third fiddle to other national teams, so the Socceroos deserve some respect for qualifying. After all, in Australia we expect the Matildas – our women’s soccer team – to be one of the top teams in any tournament, but for the Socceroos it’s a much tougher road.
Now all eyes are on Qatar, as they were in 2010, when the tiny but gas-rich Gulf nation out-bid more fancied bids, including the game’s inventors, England, to win the right to host the World Cup. It only has a population of 2 million, has had to build 7 out of 8 stadiums from scratch in order to host the finals, and itself has never qualified for the World Cup.
It seems like an enormous economic undertaking just in infrastructure alone. So why did Qatar want to host the World Cup? It’s partly about prestige. Qatar will be the first Arabic nation to host the World Cup (as well as the first host country since Italy in 1934 to host the tournament without having played in it). But what about the economics? The Qatar authorities predict a contribution to the national economy of around $20 billion (A$28.9 billion) with 1.5 million new jobs created in construction, real estate and hospitality.
The IMF predicts Qatar’s economy to grow by 3.4 per cent a year thanks to the World Cup boost but then slow to 1.7 per cent a year by 2024. However, the Russia-Ukraine War has made Qatar a supplier of choice of Liquefied Natural Gas (LNG), which the IMF expects to boost Qatar’s GDP by 3.8 per cent in 2027 when new LNG production come online.
The World Cup is expected to attract 1.5 million visitors to Qatar, over half its normal population. However, tourists must be full vaccinated, have a ticket to the World Cup matches and respect Qatar ‘modesty’ in terms of cultural values. Qatar had put a lot of investment into cultural attractions, including a new National Museum of Qatar (NMoQ), to attract visitors between matches.
What about jobs? As many new jobs have been created as tourists are expected, but Qatar has an enormous expat workforce so the benefits will be spread across the MENA region and South Asia and Southeast Asia as well. Foreign workers fill 9 in 10 jobs already in Qatar therefore much of the job creation will be for guest workers, whose working conditions have already come under scrutiny from the international trade union movement. The World Cup should be an opportunity to make improvements on that score. The tax-fee benefits of Qatar mean there won’t be the tax revenue of past World Cups to the host government.
In terms of spending, the big-ticket item in hosting mega global events like the World Cup and the Olympics is infrastructure. It is estimated that Qatar will spend $200 billion (A$289 billion) in infrastructure to host the World Cup, building seven out of eight stadiums from scratch, as well as the associated accommodation and logistics to hold the month-long tournament. Of course, some of the infrastructure will benefit Qatar well after the tournament is over, such as upgrades to Hamad International airport, a light railway, a bridge between Doha and Bahrain and new roads. Some of the stadiums will be dismantled after the Cup and the seats will be donated to developing countries in the Middle East and Africa to support Qatar’s soft diplomacy.
Will the World Cup benefit Qatar in terms of trade? Overall Qatar is mainly a LNG exporter, so the value of the World Cup will be minimal beyond tourism, but it may be an opportunity to position Qatar as an alternate trade and aviation hub in the region to the UAE, especially if business visitors are impressed by Qatar’s hosting of the World Cup.
And how about country branding? According to Georgetown University’s Qatar campus, Qatar has been put in the Twitterverse map with a #qatar explosion in English and Arabic the day after it was granted hosting rights on 2 December 2010, and it has maintained its position since. Hosting the World Cup is part of a strategy to position Qatar long time host of major events – sporting and otherwise. The economic evidence shows that even if one event doesn’t boost FDI substantially, gaining a reputation as a regular host of major global events will boost FDI in the medium term.
So, now the Socceroos are in, what’s the opportunity for Australia in terms of trade with Qatar and the whole Middle East and North Africa (MENA) region? According to Australia’s Ambassador to Qatar, Jonathan Muir, ‘Most of Australia’s exports to Qatar are food and engineering services that have and will benefit from the hosting of the World Cup. However, after the Cup, I expect investment to be more important especially as Qatar looks to invest globally via its sovereign investment fund. For example, QIA recently took an A$ 1 billion stake (US $691 million in the Sydney Airport consortium, bringing Qatar’s sovereign investment to about A$ 4 billion (US $2.7 million).’
And for Australia and the Socceroos? We have our not-so-secret weapon Tim Cahill, Australia’s highest ever World Cup goal scorer and a FIFA World Cup Ambassador. Tim lives in Qatar and has and will be involved in a lot of Australian embassy functions, so he’s likely to help us score a lot of goals off the field as well.
With the Grey Wiggle and Timmy Cahill combined, Australia looks likely to make an impact on and off the pitch in Qatar.