Impacts and Challenges of Hosting 2030 World Cup for ASEAN

By Ay San Harjono

Impacts and Challenges of Hosting 2030 World Cup for ASEAN
ASEAN Foreign Ministers Meeting in Lombok in January 2011 agreed the idea of joint bidding to host the 2030 FIFA World Cup. Solicitation for bids to host the 2030 World Cup will begin in January 2017 and the decision will be made in December 2018. Malaysia and the ASEAN Secretariat are scheduled to prepare a status report for the 18th ASEAN Summit on 7-8 May 2011 in Jakarta.

Hosting a World Cup is a good opportunity for ASEAN as it would be consistent with the new strategy of FIFA to expand their football industry markets outside Europe and Latin America. It can also provide opportunities to bolster the ASEAN Community as this event will bring closer ties amongst ASEAN Member Countries and raise the international prestige of the region due to media exposure.

In addition to these non-economic impacts , hosting a World Cup can generate some economic impacts too. From a macroeconomic perspective, hosting a World Cup will increase aggregate demand of ASEAN economies, boosting consumption, investment and government expenditures. Consumption of goods and services will multiply to serve the needs of 32 football teams, their officials, the media and fans. The 2010 World Cup in South Africa recorded 3.2 million people viewers and attracted 400,000 overseas visitors throughout the 64 matches. In terms of government expenditure, the ASEAN Governments will also spend for the bid inroad construction, public transportation, stadia and other infrastructure. The South African government spent US$1.48 billion on the construction of new football stadia and the renovation of existing stadia (Humphreys, 2010). Hosting a World Cup will also encourage investors to build or upgrade facilities such as hotels, restaurants, etc. The direct economic impact of 2010 FIFA World Cup has been estimated at around 0.5% of South Africa’s GDP in 2011 (Mahajan, 2010).

Despite the economic benefits, hosting a World Cup also implies a number of costs. A host country should put her bid in a competitive auction held by FIFA ranging from US$10 million (Qatar 2002-2006) to US$478 million (Goldman Sachs, 2010). Hosting a World Cup also requires investment in infrastructure, such as training facilities, high-tech broadcast infrastructure, road construction and stadium development. As of June 2010, South Africa had spent around US$4 billion on preparations for the World Cup event (Wolfe, 2010).

Hosting a World Cup require full government support. FIFA rejected Indonesia’s bid for lack of government support in 2010 as Indonesia failed to collect the required documents and guarantees from the government. In terms of facilitating the event, the South African government needed to involve 17 ministries to provide guarantees to ensure the success of the event, including entry and exit permits by the Ministry of Home Affairs, customs, tax, bank and foreign exchange operations by the Ministry of Finance, telecommunication and information by the Ministry of Communication, etc (Republic of South Africa, 2010). These multi-sector involvements may get more complex as ASEAN consists of ten countries.

First References
Channel News Asia (2011). “ASEAN eyes 2030 World Cup”.
Goldman Sachs (2010). “The World Cup and Economics 2010”. Goldman Sachs Global Economics, Commodities and Strategy Research.
Humphreys, Brad. R (2010). “The Economic Legacy of The 2010 World Cup” Forbes
Mahajan, Sandeep. “After the World Cup: Policy Dilemmas Tackle South African Government.”
Republic of South Africa (2010) “Key Facts Government Preparations for 2010 FIFA World Cup South Africa”.
Wolfe, Michael (2010). “The Disadvantages of Hosting a 2010 World Cup”.

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