2010 World Cup South Africa South African

¶ … 2010 world cup South Africa

South African Economy and the World cup

There is no doubt in the fact that the world has become a global village as technology has progressed and travelling has become easier. People now travel from country to country with an ease as if they used to visit a relative.

The globalization has gifted the people the ease to travel miles across to another country to attend and enjoy world events whether it be Cricket World Cup, FIFA, Formula One or the Wimbledon final. This means that whenever any such events are held there is an immigration or movement of a large amount of people to the point of attraction.

Countries have discovered these events as a new way to revive their economy as these events lead to a large amount of foreign spending in their country which in turn generate a lot of income for the local people. Events such as FIFA world cup attract more than 2 billion people worldwide and the sponsors are one of the global multinational giants such as Coca-Cola, Mc Donalds and Adidas. There is no doubt in the fact that so much money is being spent on one event just because it would in return generate a lot of income for the investors. The example of the country of origin of such event is the same as an investor who puts in a lot of money in the construction of lavish and huge stadiums which would attract a lot of people and would be a source of income and boost for their economy and would lead to the country's economic revival.

The advantages of hosting a world cup can clearly seen in countries like Japan, United States of America and Germany as they got a lot of exposure in the form of people visiting from around the world and on the other hand, it also lead to infrastructure development on a vast scale. Such was the case of South Africa being the host of the 2010 FIFA World Cup.

South Africa before the World Cup

An African nation was going to host the FIFA World cup for the first time and it was no one else but the beautiful South Africa. But the moment, South Africa was declared the host nation for the FIFA 2011, questions from every part of the world started to rise not only due to the poor infrastructure of the country but also due to some past incidents that left the people and experts insecure regarding the organizing of such a mega event in South Africa. Concerns were mainly raised as regards the security of the visitors as South Africa is a country that averages 50 murders a day but still no major disturbance had been seen in the sporting events that were previously held in the country.

Some incidents such as the robbery of money from the rooms of Egyptian and Brazilian players raised the questions that whether soccer players would be provided with enough security and whether the government would fulfill its commitment to allow visitors to move freely without any harm.

Another concern that was being raised was of the infrastructure of the country. South Africa has never been famous for its broad highways and 5 lane roads which meant that a lot was to be done in the form of building roads, bridges, stadiums and highways and this required a lot of money to be put in and required investment worth billions of dollars.

But the benefit that such a mega event would bring to the country raised the will of the South

African government was aiming to make the event a huge success by the support of FIFA and its organizers. The event had an expectation to create around 155000 new jobs in the country which would lead to a major rise in the rate on employment in a developing country like South Africa. It was also expected that around half a million visitors from outside Africa would be visiting the country which would include representatives of the sponsors which are the globally developed companies which in turn means that this would bring foreign direct and indirect investment into the country.

South Africa is already known around the world for its immense abundance of tourist attractions. Ranging from beautiful beaches of Mauritius to Cape Town, South Africa is a host to one of the world's best tourist destinations. Tourism therefore remains an important contributor to the country's gross domestic product and the economy at large. Considering this fact, the hosting of FIFA world cup 2010 in South Africa was an immensely important opportunity for South Africa as it could use this event as an opportunity to promote South Africa on the international level. The event, which was a very successful one, had left its effects both positive and negative on the economy society and environment of South Africa.

FIFA World cup

FIFA, abbreviation for Federation Internationale de Football Association, is the regulatory authority for football. The organization holds a world championship event every four years. The event is contested among the world's best football teams to win the gold FIFA world cup trophy and the winning team enjoys the title of the world football champion until the next event and contests the next event as a defending champion.

Football is one of the most popular sports all around the world with football lovers existing all across the globe regardless of the fact that their respective teams are contesting the event or not. FIFA world cup events are known to have enjoyed the highest viewership on satellite TV. Moreover, football fans have been observed as the most emotional ones in the history.

Given the number of die hard football fans around the world, hosting FIFA events is an opportunity of significant importance for any country across the globe, particularly for a country such as South Africa, that despite of being rich in natural tourist attractions fails to make full use of it due to alleged criminal violence against tourists. This is because an event like FIFA attracts tourists from all around the world, and if successful, it opens the door of strengthening a country's image on the international front. Moreover it helps attracting a considerable amount of foreign investment which adds to the foreign exchange of the country.

Effects of FIFA World Cup 2010 on South Africa

Economic Effects

The hosting of FIFA World Cup event in 2010 has beyond any doubts have given a great economical support to both the private sector and public sector of the South African Economy and has helped the country to resists the recessionary pressures of the current economic down turn

. Achieving positive economic growth is one of the primary macroeconomic objectives of any government. A positive economic growth for any country would mean a rise in the country's total value of output produces in a given year, which in turn implicates on the country's standard of living. Most of the economies around the world today adhere to the mixed economy system, where the economy functions with a partnership of both private sector and the public sector. Many of these economies have more inclination towards the private sector, which means the private sector remains the major contributor to the gross domestic product (GDP) of the said economy. However, this does not mean that the private institution become solely responsible for the economic growth. In a mixed market economy, the government institutions have a vital role to play in influencing the efficiency and productivity of the private sector and in turn influencing the economic growth of the country. Therefore the degree to which a country achieves its growth is directly correlated with the efficiency of its institutions.

Growth rates of any economy are highly influenced and are dependent on factors such as population, literacy rates, interest rates, tax rates, aggregate demand, aggregate supply, law and order, and overall political and economical stability of a country. This is where the role of institutions comes in to the picture. Government institutions are responsible to ensure economical and political stability of the country so that private sector can continue to prosper and thus contribute to the country's economic growth. In context of hosting the FIFA event, where the private sector saw a business boost by increased demands in various sectors, particularly those pertaining to tourism, at the same time the government sector was responsible to make sure that political and law and order situations were stable so that the event can be made successful on the international level without the risks of any negative publicities.

South Africa has its roots to a British colonial system and has been a democratic country ever since it has achieved its independence. Like most western countries, South Africa has adhered to a mixed market economy with an inclination towards the free market system where private sector has always been strong. The country has scene stark transition from primary sector to the secondary sector during recent years.

In order to analyze the socio economic dynamics of South Africa let us compare it with China, an economy seeing fresh but rapid growth. The primary reason behind choosing China is the fact that the country hosted the international summer Olympic Games around the same time when FIFA was hosted in South Africa. At the On contrary to that, China is a transition economy which has a history of belonging to the communist bloc. Before the Chinese revolution, China had one of the least developed and slowest growing economy with a very low standard of living. This was due to a very high population in China, combined with economic inefficiency as the country was run on the lines of command economy system. However, after China experienced the transition of economic system, the Chinese government started a strong institution building process that aimed at developing policies to facilitate the development of private sector economy. The Chinese government carried out major land reforms, tax reforms, and other economic reforms that resulted in rapid industrial growth in China. The Chinese government efficiently used its diplomatic channels to gain access to international export markets for Chinese goods and services (Hannson, 1993). The Chinese government kept political stability in control and developed policies that would ensure slowing down of population growth rate in China. The government of China also saw to it that all the legislations passed by the government are implemented in its full spirit.

The government of South Africa, unlike China, was already running in a free market environment at the time of its independence and already had well developed institutions due to the former British rule that existed in the country. After the independence, these institutions a transfer of power took place and the South African government took charge of the public institutions. Abundant with natural resources, tourism and mining remained the most important economic sectors for South Africa in terms of revenue generation. Although, the South African government achieved a great deal of industrial growth over the years, but the economic growth of South Africa is much less as compared to what exists in China. This is because while South African government too did implement various land reforms and other economic reforms, it failed to make the functioning of its institutions a transparent and corruption free affair. Many South African states face insurgencies and political instability that effect economic activity. Moreover, many important sectors of the economy such as real estate, stock markets, industrial sector, sports and film industry are under a great influence of mafias and underworld. Tax evasions and money laundering is also a common practice that impacts the country's balance of payments, government spending and budget deficits and in turn is implicated on the country's economic growth. The institutions in South Africa have achieved little success in bringing down the corruption and many public institutions are allegedly politicized and function to achieve political interests of the ruling party.

Despite of having a population lower than that in China, South Africa has a slower economic growth rate in comparison to China. According to World Development Indicators (2005), population in China was 1288 million while South Africa has a population of 1064 million. Despite of this China had a GDP of $6,090 billion, while South Africa has a GDP of $2,908 billion. The per capita GDP growth rate in China was 8.3% compared to 3.7% in South Africa. Statistics also show that despite of having a much higher population; China had greater life expectancy, better standards of living, better infrastructure and far greater literacy rates for both genders as compared to South Africa. This shows that the strong policy making on the institutional level in China has helped sustaining the economic growth in China.

While ensuring efficiency in the microeconomic environment is the responsibility of the individual organizations in the private sector, the stability of the macroeconomic environment is the responsibility of the institutions. It is the macroeconomic policies that effect the microeconomic decision making of the private sector. In order to achieve a sustainable economic growth rate, policies must be made that aim at minimizing the population growth rate and the population structure must be such that the working age group dominates the population pyramid. Literacy rates must be pushed upwards. Government policies pertaining to internal politics and foreign relations must support the economic aims. Inflation rates must be kept stable and tax nets must be increased (Hayden, 2006). The country must be made self sufficient where possible. It is the political will and the institutional framework that will be implicated on the degree to which a country will achieve its economic growth.

South Africa's tourism and the FIFA event has various target markets. Their biggest target markets are the tourists, which include both local and international tourists. FIFA World Cup 2010 has always been a major attraction for tourists who visit South Africa during. As a matter of fact, there are a significant number of local and international tourists who visit South Africa during spring, only to attend the FIFA World Cup 2010 event. In order to attract these tourists, FIFA World Cup 2010 offers a lot more than a conventional sports show

. It offers everything from music to clubbing and from shopping to dining. In order to attract international tourists, FIFA World Cup 2010 offers interesting accommodation deals at reasonable prices in South Africa's best hotels and resorts. International tourists are provided with the facility to book these accommodation facilities online through the South Africa Tourism's official website.

The wide variety of attractions offered at FIFA World Cup 2010 stadia attracted other target segments as well. School, College and University students did not only attend the events, but were also a major participant at the event. Students, both young and old, organized fairs, carnivals, concerts and other forms of entertainment and leisure. These events were an important attraction for visitors because of their creativity and originality of ideas.

Another important target market for FIFA World Cup 2010 included businesspersons and corporate houses. Considering the fact that the event hosts more than three hundred thousand visitors, FIFA World Cup 2010 proved to be an ideal and perfect time for promotion and marketing for most businesses. Restaurants, brands, tourism companies and other such businesses offered great promotional schemes in order to attract their respective target markets, thus indirectly contributing in the attraction of FIFA World Cup 2010's own target market.

In order to attract its respective targeted consumers, that were the foot ball fans from around the world, FIFA World Cup 2010 uses varied promotional strategies. The promotional campaigns revolved around and highlight the theme of the event for that particular year. For the year 2010, FIFA World Cup 2010 incorporated South Africa's cultural heritage and natural beauty in its promotional campaigns. The World Cup official song by the international singer Shakira was also shot in a way that depicted and promoted South Africa's rich and warm culture.

The event was promoted using both, above the line and below the line promotional methods. These include television and radio advertisements, magazine and newspapers, posters and flyers, and the internet.

International tourists were targeted through advertisements on television channels that have international viewership. The event is also promoted through FIFA World Cup 2010's official website as well other travel and tourism related websites. The tourism ministry of the South African Capital Territory has a great role to play in doing so and takes keen interest given the immense economic contribution brought in by these tourists.

Local visitors were targeted using local print and electronic media. Apart from that, hoardings, posters and banners at public places and direct marketing practices such as newsletters are also an integral part of FIFA World Cup 2010 marketing strategy.

The main role that was to be played in the year 2010 in order to increase the target market was the theme of the event itself. The theme is a very creative one and the attractions are expected to be "imaginative" or never seen before, as it says. In order to attract the target markets, the official website showed highlights of some of the interesting attractions that were to be offered at the 2010 event. These included attractions for kids, younger generation, fashion fraternity and media related people. The website also highlights the number of people that attend FIFA World Cup 2010 each year and thus invite businesspersons and corporate houses to the event.

Apart from the website, video tours of FIFA World Cup 2010 are also posted on You Tube. Besides the internet world, the 2010 event is promoted using the conventional television and print mediums. As a result immense economic support was provided not only to the sports and tourism industry, but also indirectly to other industry as tourists spent on other ancillary services as well.

On the negative side one major point of concern was the fact that with the amount of tourists and foreign investments coming in the level of spending in the economy and demand of goods and service substantially increased resulting in inflationary pressures on the economy

. While many economists argue that this negativity was overshadowed by the fact that at the same time employment levels went up, however, it must be noted that the net effect of inflation was much more than the rate at which employment levels went up

. Moreover while the richer economic group and the tourist had the ability to spend, the local poor population felt the burden of inflation in the midst already recessionary time period. Some people also argue that most of the employment was only seasonal and temporary and many employees who had jobs related to the event lost their jobs soon after the event was over.

Social Effects

The biggest social influence that helps in attracting tourists for South Africa are the etiquettes of the South African nation that has British roots. South Africa is a highly civilized, well groomed, well educated and well mannered nation that adheres to their culture and traditions conservatively. South African people love to flaunt their unique culture, which is interesting to experience and discover in its own way. South Africa has a colorful culture and the South African people are known for their frankness with foreign visitors. South Africa is a multi-religious society and is welcoming towards people from all cultures.

What makes the tourist reluctant to visit South Africa is the internal racial conflicts that exist in the country. The major racial clashes lie among the white African and the blacks. It is alleged that the blacks have a greater right over South Africa but they are sidelined when it comes to education, employment and other aspects of quality life and the whites tend to enjoy the superior life styles. This has been backed by the evidence that the black population is mainly categorized in the weak economical group. This has resulted in sharp increase of criminal activities and in the past cases have been reported where visiting tourists were robbed or murdered by the black militant and rebellion groups.

The biggest social influence that helps in attracting tourists to the hotel industry are the etiquettes of the Hotel staff. The more hospitality that is offered by the hotel staff, the better guest turnover it will get.

Tourists belong to different origins and different societies which mean they follow different social norms. Some entertainment information such as pubs, dance clubs and casinos might offend certain tourists. Another social concern pertaining to the event is that the tourists and visitors bring with themselves cultural vices and diseases such as HIV and AIDS.

Environmental Factors

Over the years South Africa has been successful in gaining advantages from cheaper sources of energy. Presently, South Africa's energy sources are cheaper that what is prevalent in most parts of the world. Currently, United States of America is one country that has cheaper energy resources. The low priced energy resources means that South Africa saves on electricity, fuel and transport costs which greatly contribute in the progression of South African tourist industry.

South Africa is a home of natural beauty including beautiful hill stations, beaches and a very well planned capital and the administrative center Johannesbergh. South Africa has emerged as a paradise for natural beauty lovers with places such as Kenya, Mauratius, Mombasa, Zanzibar, and one of the most beautiful places in the world, Cape Town, also referred to as Cape of Good Hopes. Given the huge influx of tourists and rapid developmental projects that started following the announcement of the event to be hosted in South Africa, many environment raised serious concerns over the way the event negatively threatened South Africa's natural environment.

Given the rapid industrial growth and increasing use of fossil fuels and thermal energy in production processes the problem of emission of harmful toxic gases into atmosphere is on its rise. Air emissions are one of the major causes of air pollution. These emissions contribute to depletion of ozone layer and in turn results in problems such as global warming and climate change. According to medical experts, inhaling of the sooty particles by human body triggers diseases such as asthma and other lung diseases and heart diseases. The impact of these air emissions on lives of living organisms, and particularly humans tends to be much more severe in populated and busy cities such as London where economic activity and traffic congestion is greater as compared to smaller towns.