THE ECONOMIC IMPACT OF QATAR 2022 Novid Nuri

36HOSTING A WORLD CUP AND ITS EFFECTS ON THE ECONOMY

Many nations bid millions to host the world cup, but it is not just for the passion of football and there are many other benefits to the economy if hosted by the right country.

The main factor is the Qatari GDP will show a noticeable rise. The increases in GDP of Qatar would mean that there will be an increases in production, income and expenditure. According to World Bank reports: “The economy is expected to expand by 3% over the medium term, helped by continued investments related to hosting the football world cup.” The hosting country will be able to produce more and increase the GDP, which mean that the consumption, investment, government spending and net exports will increase.

By hosting 2022 Qatar will attract many local and international companies to invest in different new projects. For example, Hilton which is an American owned multinational hospitality company which is building their seventh hotel in Qatar to accommodate the fans. Many local firms will open to provide the local market with required supplies that be used to finalize the projects. It is expected that with the increasing of GDP in Qatar the unemployment rate will fall down. The firms will hire more people to implement the new projects as there will be many more opportunities and jobs for people.

Hosting a world cup may cause demand-pull inflation due to the expected high spending rates especially by the foreigners thus making consumer goods to be expensive which is a great disadvantage to the poorer people in the country.

The money spent and invested by the government in preparation for the world cup could have been used for education, healthcare or welfare. For example, in Brazil 2014 people had to move out of their homes in order to free up land for new stadiums that are no longer been used after the world cup. The money spent on building stadiums delays the infrastructure that would have helped the poor.

There is also potential for bad publicity, for example the deaths of 6500 migrant workers that were building infrastructure for the 2022 World Cup. Workers often live in cramped, dirty and unsafe accommodation, Recruitment agents also make false promises about the salary workers will receive, and the type of job on offer. One worker was promised a salary of US$300 a month in Nepal, but this turned out to be US$190 once he started work in Qatar. Sometimes, salaries aren’t even paid for several months.

In conclusion, I think hosting the world cup can be very beneficial for certain countries and mainly MEDCs as they won’t have as big of a financial problem to invest in stadiums, hotels and transport. However, they may still have the risk of demand pull inflation which would cause financial problems to the poorer people in the host’s country.