Qatar receive huge economic boost after hosting 2022 FIFA World Cup

For instance, the UAE is seeing increased tourism numbers as some fans decide to reside in the country rather than in Qatar, and has introduced a multiple-entry visa for those attending the competition. Kuwait and Jordan are also receiving more tourists, and Saudi Arabia expects a spike in pilgrims and related hotel stays. On the 20th of November, Qatar will make history by bringing the world’s most watched athletic event to the Middle East for the first time. For Qatar, hosting the FIFA World Cup is a strategic move to advance the country’s infrastructure development and foreign policy objectives.

Human rights organizations around the world have condemned Qatar for its treatment of migrant workers, who have few rights in the country. These stories only represent the negative publicity the country is getting before the tournament starts, and Qatar’s poor image will likely worsen once the tournament begins and the 1.2 million fans flood the country. The construction and preparation for the event has led to concerns about human rights violations, particularly among migrant workers who are building infrastructure for the tournament. Many organizations have called for better working conditions and treatment of these workers, which could lead to positive changes in labor laws not only in Qatar but also in other countries where similar practices occur. In the run-up to the World Cup, Qatar was under international fire for exploiting the migrant workers who built football stadiums and infrastructure for the tournament.

It will only be in several years’ time that the country will be able to evaluate whether any gains were worth the cost of putting on a show for a billion people. However, Zimbalist points out that there is no guarantee that the image created from an event will be a positive one. For the 2018 tournament, held in Russia, football’s governing body, FIFA, says more than one billion people tuned in to watch at least some of the final game between France and Croatia. In November 2022, Qatar will become the first Arabic country to host the FIFA World Cup, the world’s most prestigious and high-profile football tournament. These transportation links made it easier for fans to attend the World Cup matches, but they will also help to improve the overall quality of life for residents of Qatar now the tournament has ended.

• However, Zimbalist points out that there is no guarantee that the image created from an event will be a positive one.
• However, off the field has hosting this sporting mega event brought economic prosperity to Qatar and more broadly the Middle East?
• In a meeting just before the World Cup started, the Cabinet decided to send Sports Minister Conny Helder.
• Overall, official estimates are that the World Cup will generate USD 17 billion for the Qatari economy while it takes place.

Over one million tourists are expected to fill these new structures over the next month, providing a near-term boon to the economy—especially thanks to increased spending on food and hospitality supporting services. Increased domestic demand will also drive inflation up; our Consensus Forecast expects inflation to more than double from 2021’s figure and average 4.6% in 2022, well above the GCC average. Looking at FDI trends for the last three hosts of the tournament, none has seen sustained growth post-event. South Africa and Russia saw increased investment leading up to the tournament, and the former had a brief spike the following year, but all three have seen long-term declines in FDI in recent years, even before the outbreak of Covid-19. Qatar’s inflows of foreign investment are miniscule compared with regional neighbours such as the United Arab Emirates and Saudi Arabia.

Now, with one year on Sunday to go before the tournament kicks off, football and the world are much more familiar with the name Qatar, which in itself can be seen as fulfilling a key aim of the bid. New roads and transport projects will companies like tesla to invest in provide economic benefits for years after the final whistle is blown at a World Cup. Football’s meteoric rise in popularity over the past century has come to represent more than a game and influence much more than just match results.

Qatar’s total FDI inward stock declined each year between 2014 and 2020, according to UN Conference for Trade and Development data, although the economic blockade imposed by other Gulf Cooperation Council (GCC) countries between 2017 and 2021 accounts for much of this decline. No other single sporting event can draw as much global attention to a location, and most host countries set out to use this global platform to promote themselves and boost their economies. Whatever the truth of allegations made in a 2020 US court indictment that three South American Fifa chiefs were paid, which the supreme committee denies, Blatter himself has always maintained that the crucial votes resulted from high political influence, not backroom machinations.

Environmental Impact

Despite being surrounded by controversy, the FIFA World Cup kicked off in Qatar approximately three weeks ago. Moving towards the “business end” of the competition, most teams now have packed their bags, while others are preparing for the quarter finals. However, off the field has hosting this sporting mega event brought economic prosperity to Qatar and more broadly the Middle East? The economic benefits from hosting sporting mega events are often limited and far smaller than initially predicted.

The World Cup is expected to bring in billions of dollars for Qatar’s economy, through increased tourism, infrastructure development, and job creation. Despite the potential benefits of the World Cup, hosting major international sporting events are notorious for their poor return on investment. Forecasts indicate that Qatar’s economy will grow by 3.4 percent in 2022 and 2023, thanks to the World Cup boost, but then slow down to 1.7 percent by 2024. The challenge is to capitalize on the substantial infrastructure investments made thus far to sustain strong GDP growth. During the 2016 Olympics, Rio de Janeiro invested heavily in modernizing its infrastructure, spending $2.9 billion on subway lines and over $4 billion renovating historic districts. Rio and International Olympic Committee organizers planned to stage local and national events to maintain venues once the games concluded.

However, these measures may not entirely alleviate concerns over accommodation availability or pricing. On a brighter note, it is worth considering how tourism impact will benefit Qatar’s economy long after the World Cup ends. The country has already seen an increase in tourism since winning the bid for hosting rights and expects even more visitors during and after the tournament. Although the cost of delivering the required infrastructure for a World Cup is huge, that new infrastructure has the potential to provide long-term economic benefits.

For the upcoming World Cup in Qatar, it is clear that Qatar’s organizing committee for the World Cup is willing to spend a lot of money on the promise of potential economic improvement for the nation. This committee plans to spend about $200 billion on infrastructure for the tournament, but experts believe that the country may need to spend even more to transform the nation’s infrastructure to fit proper standards. The tourism industry in Qatar anticipates up to 1.5 million visitors for the upcoming games, which is expected to generate 240 billion dollars for the Qatari economy by 2025.

• The government of Qatar did not pass labor law reforms until recently, after the majority of the construction had already taken place; by then,  the damage had been done.
• The retail industry also witnessed a rise during the final few months of 2022, with outlets and malls that accommodate visitors from around the world being available.
• For many of our readers from more than 200 countries and territories around the world the website is a vital part of their daily lives.
• The construction of infrastructure for the purpose of hosting and accommodating visitors are expected to bring many positive economic benefits to the country.

That happened at Hoekstra’s initiative and to the annoyance of the Ministry of Education, which is responsible for emancipation and LGBTQIA+ equality, and worked with Foreign Affairs to ensure their safety at the World Cup. Qatar targets between 5 to 6 million tourists until 2030, and so far tourism revenues have increased by 45% in the first half of this year 2022. Qatar has a population shy of 3 million people, only around 300,000 of whom are permanent residents. The country gained independence in 1971, and by the mid-2000’s it became the world’s top LNG exporter, catapulting its development. The government now boasts a sovereign wealth fund worth USD 450 billion and one of the highest GDPs per capita in the world.

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Hotel reservation prices are also witnessing a significant increase, as we find 4-star and 5-star hotels, the cost per night ranges from 3 to 5 thousand dollars, and 2- and 3-star hotels range from 500 to 2000 dollars per night. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world. For now, our panelists expect GDP growth to more than triple this year from 2021’s modest 1.6%, only to halve next year as the economic buzz from the tournament fades into the background.

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However, given fans potentially being dismayed by the temporary accommodation, or how Qatar’s human rights record has been emphasised during the last several months, it is possible that these legacy effects may not flourish and further depress the optimistic monetary projections. Worse still, without repeat visitors, could stock sectors these newly constructed hotels become white elephants, similar to when 40% of Lillehammer’s full-service hotels became bankrupt due to a lack of demand after the 1994 Winter Olympics. In any case, it is doubtful whether hosting the World Cup will bring $17bn of economic benefits to Qatar or even the Middle East.

As a result, Premier League football clubs such as Liverpool and Arsenal have decided to host training camps in the region, playing several friendlies against other top European opposition. This may just provide enough of an incentive for soccer-fanatics to stay in these destinations as opposed to Qatar itself. Of course, one must not forget that when calculating the economic benefits from hosting the World Cup, projections are also based on future income streams.

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Economists have found, however, that the World Cup provides little to no gain in real economic growth and tourism for the host countries following the tournament. The hotels, updated sewer systems, and other critical infrastructure pieces will certainly be applicable to the country’s plans of becoming a global innovation and tourism hub going forward, but it is harder to see this being the case for the newly built stadiums. The nature of soccer makes it challenging to potentially host other tournaments because the vast majority of tournaments and games are held domestically or closer to the big European leagues — unlike other sports like tennis and golf, which switch venues every weekend.

In total it has spent over $300bn to host the showcase tournament, exceeding the cost of all previous World Cups combined. Given the Gulf State’s vast wealth – driven by its exports of oil and natural gas – placing it in the top ten richest countries in the world based upon GDP per capita, Qatar does not need, or will not care, about a positive monetary return on this investment. To be entrusted to host significant sporting events provides a country with large intangible benefits. Qatar seems to have a preference to host large sporting events, having held the 2019 Athletics World Championships and has a ten-year contract to host a Formula One Grand Prix. After spending over $300bn on the World Cup, Qatar has just hosted a very expensive party and it is unlikely that it will be the last. The construction of infrastructure for the purpose of hosting and accommodating visitors will bring many positive economic benefits to the country.

Pros and Cons of Qatar World Cup

However, academic research into the economic impact of hosting the World Cup suggests any advantages gained are at best hard to perceive and at worst non-existent. Qatar is also the first country since Italy in 1934 to host the tournament, held every four years, having never played in it before (although Italy didn’t enter the inaugural event in 1930, whereas accurate currency strength meter Qatar has tried and failed to qualify for each tournament since 1978). It gives the world a window into that country, showing how new infrastructure makes it a good place in which to invest or to do business. Non-World Cup tourists tend to stay well clear of a host country during a World Cup, keen to avoid the crowds, traffic and inflated prices.