Jacob Ye, Boston College
Background
Every four years, all eyes turn towards a month-long competition in the world of soccer: the FIFA World Cup. The World Cup is considered the most prestigious prize in the sport, and boasts the title as the most watched sporting event. The 2018 Russia World Cup reached over half the world’s population. Now, four years later, Qatar’s 2022 World Cup continues to impress with record-breaking viewership. The host of the World Cup receives billions of dollars in sponsorships, advertising, and merchandising. However, the host nation pays a steep cost. Indeed, the 2022 Qatar World Cup was the most expensive World Cup to date. Was it worth it?
The Bidding Process
The hosts for each World Cup are decided via a bidding process overseen by FIFA. Until 2016, bidding was facilitated by FIFA’s 24-member Executive Committee (ExCo). A majority vote of 13 members selects which country hosts the World Cup. FIFA asserts that the host is selected based on an evaluation process combining infrastructure and commercial elements. These elements include stadiums, accommodations, predicted organizing costs, and transportation, among others. Countries offer the ExCo lucrative deals promising to construct superb infrastructure, to provide commercial rights to FIFA, including broadcasting and ticketing, and investing in security. Spending on the past three World Cups totaled $3.6 billion, $15 billion, and $11.6 billion, respectively. In comparison, Qatar promised to spend an unprecedented $220 billion on the 2022 World Cup. With such high spending, Qatar’s bid for world fame was locked in.
Costs
Since first winning the bid in 2010, Qatar spent an estimated total of $300 billion over twelve years. Costs included seven new stadiums, a new airport, over a hundred new hotels, and a massive overhaul in Qatar’s transportation infrastructure. In the nine years leading up to the event, Qatar built thousands of kilometers of road networks, cycle paths, and 200 kilometers of new bridges. Because of the massive amount of construction, labor costs became a serious concern for Qatar. The Qatari government decided to make use of their large migrant worker population, which constitutes over 95% of the total workforce, for their construction projects. However, in addition to economic costs, these projects also incurred serious social costs. Migrant workers in Qatar are regulated under the Kafala system, which gives employers near total control over their workers—employers control workers’ visas, allowing them to threaten employees with deportation. As a result, migrant workers are forced to endure low pay, long hours, and horrible living conditions. Laborers worked for extremely low wages and long hours (USD $240 per month) in the years building up to the World Cup. Because of these conditions, outside sources have estimated almost 6,500 worker deaths related to construction for the World Cup. These atrocious conditions raise concerns about Qatar’s human rights record and will undoubtedly hinder Qatar’s goal of becoming an “advanced country… providing a high standard of living for its population and future generations.”
The World Cup
Despite the staggering price tag on the 2022 World Cup and the negative public attention Qatar’s labor practices garnered, especially in Western nations, tones largely shifted as soon as the games began. There is no doubt that, in terms of viewership, the 2022 World Cup is the most successful to date. One major sports channel, beIN SPORTS, reached a cumulative viewership of 5.4 billion, a 135% increase over the last World Cup’s 2.3 billion. Revenue has been record-breaking, as FIFA projected revenues of $6.5 billion, a $1 billion increase from the previous World Cup. Additionally, Qatar 2022 broke records on social media. Instagram posts from Lionel Messi, often considered the greatest soccer player in history, have taken up spots as the most liked post on the app, and 5 other spots on the top 20 most liked. Since the World Cup, Qatar has had an increase in tourism rates as well. Additionally, much of the infrastructure constructed over the last twelve years is built to last and will help to diversify the economy, which helps explain Qatar’s willingness to spend billions on a months-long event. Undoubtedly fueled by spending on the World Cup, Qatar’s real GDP grew by 4.2% in 2022, significantly higher than other recent years.
Conclusion
While hosting the 2022 World Cup does have immediate benefits for Qatar’s economy in terms of global attraction, infrastructure, and GDP growth, it doesn’t come close to accounting for the project’s $300 billion price tag. Building this infrastructure cost over 100% of the nation’s GDP. However, in the long-term, hosting the World Cup could prove to be a boon for Qatar. Qatar never expected to profit in the short-term. As a developing country, Qatar’s massive investment in infrastructure will enable high economic growth. Additionally, while the cost is high, state-controlled Qatar Petroleum earns substantial revenues of USD $30 billion per year, allowing Qatar to absorb the cost. More importantly, this is a crucial first step in Qatar’s goal of diversifying their petroleum-dependent economy, especially in a global energy economy experiencing rapid growth in solar, wind, and other alternative energies. Nevertheless, while infrastructural investments in airports, highways, water-treatment plants, sewage systems, real estate, and seaports will clearly benefit the people of Qatar, their investments in football stadiums are more dubious with regard to long-term payoffs. Past World Cup stadiums, such as those built in Russia during 2018, and in Brazil during 2014, now lay abandoned and deteriorating, serving as a constant reminder of wasted capital and an eyesore for the surrounding area. To avoid the same issues, Qatar needs to find ways to subsidize the transition of these stadiums into homes of local football clubs or convert them for other uses such as shopping malls.