Qatar spent more than its total GDP to host the FIFA World Cup 2022! Will it pay off?
With over 3.3 billion people tuning in to watch in 2018, the FIFA World Cup is undoubtedly one of the biggest sports spectacles in the world. Countless countries vie for a chance to host the sports tournament that guarantees billions of broadcast viewers as well as millions of tourists. With this year’s World Cup being hosted by Qatar, the usual questions around the economic practicality of hosting such a tournament have resurfaced yet again. This time, however, the scale of these questions has increased dramatically, in lieu of the massive investment made by Qatar - over $220 billion according to multiple sources. In comparison, the oil rich nation’s GDP stands at approximately $180 billion. Ever since Qatar was awarded the World Cup back in 2010, the tiny nation with barely any soccer history has been spending 10% of its GDP every year, in order to prepare for the sports event. With such a massive amount of investment being made for a month-long sports tournament, it is understandable to ask the question whether the unprecedented amount of investment would actually pay off or not? Well, let’s find out!
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So where exactly was the $220 billion spent? Well the initial costs for Qatar began even before the construction of stadiums even began. In order to secure the rights to host the 2022 World Cup, Qatar reportedly bribed FIFA officials with a staggering $880 million, out of which $400 million was offered before the selection day, with the rest coming afterwards, when Qatar was confirmed as the host country. Once selected, Qatar began the construction of the stadiums, which was initially estimated to cost $4 billion, but has since grown to between the range of $6.5 to $10 billion. Apart from the stadiums, the other major part of the overall infrastructure development plan includes the construction of nearly 130,000 hotel rooms to accommodate the 1.2 million football fans who are expected to visit Qatar for the World Cup - that’s nearly half the country’s total population! Apart from these two primary investments, the country plans to overhaul its overall infrastructure including its sewage and transportation systems in order to prepare for the sports tournament. However, not all of the $220 billion would be spent in one go - the country has plans to turn itself into a global innovation hub by 2030 with the proposed investment.
While all this sounds good, one needs to look at the past record of host nations before making any final decisions, right? Well, if one were to go by the historical data, hosting such sports events like the Olympics or the FIFA World Cup rarely pays off for the host country. For example, Montreal’s “Big O” stadium, built for the 1976 Olympics, took 30 years to pay off in full! The scale at which Qatar plans to host the FIFA World Cup is already way higher than the previous World Cups. In comparison, it cost Russia $11.6 billion to host the 2018 World Cup & Brazil spent $15 billion to host the 2014 World Cup. If you talk about the potential revenues, according to the most recent estimates from June 2022, Qatar is expected to earn nearly $17 billion - that’s a $200 billion plus deficit, which will take years to make up for, even if it has been taken into account as a part of Qatar’s 2030 goal. While the hotels, upgraded sewage & transportation systems, and other critical infrastructure will certainly help Qatar in becoming a global innovation & tourism hub, the same can’t be said for the stadiums it has built. With the premier football league in the country, Qatar Stars League averaging well under a 1000 person attendance, the massive stadiums with 40,000-80,000 seats are practically useless after the FIFA World Cup.
It’s pretty clear that in a purely economic sense, hosting the FIFA World Cup 2022 is going to be a highly unprofitable endeavor for Qatar. Flush with cash, the oil rich nation can easily recover from the losses incurred in hosting the World Cup, with the ultimate goal of spreading its image out in the world. Like other oil rich countries in the region, Qatar plans to become a global tourist destination. If that was in fact the actual goal for hosting the World Cup, Qatar has quite possibly failed there as well. The unprecedented amount of bad press attributed to the FIFA World Cup 2022 and Qatar is most likely going to act counterproductive to the country’s goal of becoming a global innovation hub by 2030. Starting with the human rights abuse allegations pertaining to the construction of the stadiums to the bad treatment of LGBTQ+ tourists, Qatar has damaged its reputation in the minds of tourists & migrants alike. The blood stained image created in wake of the negative publicity could prove highly detrimental to the short and long term goals of the tiny oil rich nation, making hosting the World Cup an incredible waste of time and resources!