The True Cost of the World Cup in South Africa

Out of favour Barcelona forward Thierry Henry, pictured in April 2010, is poised for a move to a Major League Soccer team in the United States, the Spanish club's president Joan Laporta said Tuesday.

Photo Credit: AFP/File - Josep Lago

When South Africa was announced as the host for FIFA’s premier event, justifications of the cost were made on the basis that it would grow the local economy, provide opportunities for small and local business, act as a buffer against the economic meltdown, that it would contribute to the urban regeneration programs of the major cities particularly Johannesburg, Durban and Cape Town and bring smaller cities closer to the center of economic and social activity.  It was vaunted in fact as a great expression of the so called Rainbow Nation to bridge social, economic and political interests.

Here is the reality: The trade unions have been instructed not to strike for the duration of the World Cup even though some of the concerns are from exploited construction workers who helped build the stadiums; the matches are not accessible to most local people due to relative remoteness and prohibitive cost; an unofficial ‘blind eye’ has been turned to human trafficking and the victimization of sex workers leading up to World Cup; and while welcoming the world with open arms, South Africa’s sometimes shameful behavior  towards other Africans is rearing its head with reports of renewed hostility towards Mozambicans, Senegalese, Zimbabwean and Somali refugees, professionals and business people. Frankly the government was asking a lot from a small leather soccer ball to resolve the country’s complex social dilemmas.

Soccer is historically the sport of the black working class majority and it is this majority who have greatest need of any benefits derived from this event. Unemployment stands at over 40% and youth unemployment stands at nearly 70%.

The almost R800 billion (US$107 billion) set aside for infrastructure development in roads, airports, highways and stadiums, is many times the amount spent on the World Cups by Korea and Japan (2002) or Germany (2006). Despite a comparatively positive economic environment, return on investment for those countries has been negligible. Today’s climate is much less favorable for South Africa. The total cost of South Africa’s hosting the World Cup still remains to be seen.

Present estimates of total cost are 757 percent above the original guesstimates. Although the new Bus Rapid Transit (BRT) systems created for the World Cup ill also benefit those living in the Townships, the World Cup expenditure has displaced investment in projects with more intrinsic and long-term priorities such as health and education. It is estimated that World Cup-related infrastructure spending is equivalent to ten years of housing investment. For every seven seats in the new stadia a fully equipped school library could have been built - only 7 percent of South Africa’s schools have functioning libraries. It appears that revenue generated in South Africa is leaving our shores to the FIFA coffers and other overseas ‘investors.”

The primary beneficiaries of local investment in infrastructure and stadiums has, been the construction industry bosses. Between 2005 and 2006 their pre-tax profits skyrocketed to 56 percent.  The CEO’s at Murray and Roberts, the construction company who built the Cape Town Stadium, saw a 40 percent increase in their remuneration to R7.4 million/year (US $995,000)

Construction workers, on the other hand, officially earn between R1, 144 and R4, 576 per month (US $154 - $615). In reality many workers are paid far less. Most workers in the industry are not unionized and are employed on so-called limited duration contracts (LDCs). Twenty-six strikes have been recorded at World Cup sites of which 20 were wildcat strikes (strikes without the authorization from the union). The strikes were complicated by the fact that the companies involved have BEE (Black Economic Empowerment) partners with prominent political profiles. These individuals could use their influence with union bosses to settle disputes without undue pressure on their lucrative profit margins. The short-term nature of the jobs has done little for the training and skills development promised. At most, 50,000 temporary jobs are likely to have been created in relation to the World Cup; not the government claims of 415,000.