The document discusses the economic impact of hosting major sporting events like the FIFA World Cup, using Brazil's experience with the 2014 World Cup and Barcelona's experience with the 1992 Olympics as examples. While short-term economic indicators in Brazil declined during the World Cup period, long-term investments in infrastructure can boost GDP growth for years. Hosting such an event also provides global exposure that can transform a city or country into a tourist destination if the infrastructure is leveraged properly. The experience of countries like Barcelona shows that major events can catalyze long-term economic transformation when the investments are planned carefully and have a vision beyond just the event.

1. Page 1 of 2
Economic Commentary
QNB Economics
economics@qnb.com.qa
August 17, 2014
The Economics of Hosting a World Cup
Available indicators of Brazil’s economic
activity during the 2014 FIFA World Cup are
as dismal as the performance of its national
team during the tournament. As a number of
Brazilian host cities shut down on the days
when matches were played, economic activity
fell across the country. As a result, industrial
production declined, capacity utilization fell to
near-record lows and inventories soared. The
football-equivalent of these statistics is losing
7-1 to Germany (the eventual winner) before
millions of global viewers. Judging by these
short-term indicators, one may conclude that
the World Cup was an economic failure. A
longer-term perspective, however, is needed to
judge the economic merits of hosting a major
sporting event. This perspective could provide
useful lessons for Qatar, where the 2022 World
Cup will take place.
The long-term perspective starts years before
the actual event itself. Hosting the World Cup
requires major investments, not only in
sporting facilities but also in general
infrastructure such as roads, transportation
network, hotels and services. These
investments provide a major economic boost
for many years with higher GDP growth. They
also generate significant employment
opportunities, which the host nation can fill
either with their national population or by
attracting a large wave of expatriates. Either
way, the resulting increase in income provides
a second-round boost to growth.
The infrastructure-building stage can help the
economy grow faster for a few years up to the
tournament. It is important, however, to
transform this temporary economic boost into
a permanent gain for the economy, lasting well
beyond the sporting event. It is crucial in this
respect to have a vision for the economy
beyond the World Cup. Three issues are
paramount in this respect.
First, the World Cup provides a clear milestone
for the implementation of investment projects.
Typically, the majority of these projects are
not directly linked to the World Cup but are
needed by the host country irrespective of the
event. However, the World Cup provides a
focal point and clear deadline for these
investment projects to be completed.
Second, hosting an event like the World Cup
can transform the image of the country
resulting in long-term benefits. The event can
increase global awareness of the host country
and make it an attractive tourist destination
for years beyond the event. The full
assessment of the economic benefits of
hosting the World Cup, therefore, requires
investigating its long-term legacy. One of the
success stories is the 1992 Olympic Games
where the host city, Barcelona, used the event
to transform itself into a major European
tourist destination. The number of tourists
visiting Barcelona increased from 1.7m in 1990
to 7.6m in 2013. The Barcelona experience
clearly shows that a major sporting event can
be used as a catalyst for economic
transformation.

2. Page 2 of 2
Economic Commentary
QNB Economics
economics@qnb.com.qa
August 17, 2014
Number of Tourists Visiting Barcelona
(m)
Sources: Ajuntament de Barcelona, Turisme de Barcelona and QNB
Group estimates
Third, hosting a major global event involving
large projects requires detailed cost-benefit
analysis, careful planning and sequencing,
appropriate execution and monitoring as well
as efficient governance over the projects. This
helps avoid inefficient investment spending
and cost overruns.
Qatar can draw useful lessons from the
experience of countries and cities which
hosted major sporting events. Qatar’s
economy has now entered a new
diversification phase driven by large
infrastructure spending and rapid population
growth in preparation for the 2022 World Cup.
This phase is just an interim milestone in the
larger vision of establishing a knowledge-
based economy as set out in the 2030 Qatar
National Vision. In this sense, hosting the
World Cup is a means to achieving a longer-
term goal of modernizing the Qatari economy.
For a knowledge-based economy to flourish,
the right physical and human capital are
needed. The 2022 FIFA World Cup provides a
useful focal point to complete the required
infrastructure and move to the next growth
phase. It also helps promote Qatar to the world
and attract a growing number of skilled
workers. In this respect, Qatar is likely to be an
economic winner from the World Cup.
Hopefully its national football team will fare
equally well.
Contacts
Joannes Mongardini
Head of Economics
Tel. (+974) 4453-4412
Rory Fyfe
Senior Economist
Tel. (+974) 4453-4643
Ehsan Khoman
Economist
Tel. (+974) 4453-4423
Hamda Al-Thani
Economist
Tel. (+974) 4453-4646
Ziad Daoud
Economist
Tel. (+974) 4453-4642
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