Qatar, a tiny Gulf nation with little footballing history, ended up hosting the sport's most prominent event. The country's World Cup debut was 12 years in the making, a period in which much debate and controversy happened within the football community and beyond. Qatar was named host of the 2022 World Cup ahead of bids from the United States, South Korea, Japan, and Australia back in 2010. The country was then immediately flagged by FIFA, football's governing body, for concerns in technical reports. Those included a lack of existing infrastructure and the region's intense heat in the summer when World Cup tournaments are usually held. The concern went as far as to label Qatar's bid as "high risk," but the country nevertheless triumphed with 14 votes to USA's eight in the final round of balloting. Qatar promised to make the world "proud of the Middle East" as the first country from the region to host the tournament. FIFA President at the time, Sepp Blatter, welcomed the prospect of football's showpiece event going to ‘new lands’ as he felt content when talking about the development of football. However, twelve years after the announcement, Blatter came around with an opposing opinion and conveyed to the Swiss newspaper Tages Anzeiger that hosting the World Cup in Qatar was a mistake and a wrong choice, stating that Qatar is a relatively small country to host such a large event. Qatar's human rights record has also been in the spotlight ahead of the World Cup, particularly around the welfare of migrant workers constructing the needed infrastructure for the event. They account for 90% of the workforce, followed by allegations of delayed or unpaid wages, forced labor, long hours in hot weather, employer intimidation, and an inability to leave their jobs because of the country's sponsorship system, human rights organizations have found.
With so much to prepare for the World Cup, Qatar spent a staggering US$300 billion on tournament preparations, making it the most expensive World Cup ever. This was also to succeed in Doha’s goals of amassing influence and diversifying its economy. However, hosting the tournament is a costly gamble that could still misfire as controversies, economic turmoil, and geopolitical tensions could undercut returns. The World Cup has already provided significant global exposure, and new infrastructure has transformed the country, making Qatar positioned to capitalize, even if the ultimate World Cup return on investment still hangs in the balance. Any potential controversy will do little to slow the large amounts of money invested, sponsored, or earned during the 29-day global phenomenon. Qatar spent approximately US$6.5 billion to US$10 billion to build eight soccer stadiums for this year’s World Cup, which is considered as the most significant dollar figure. After the event, sections of the stadiums will be deconstructed and donated to other countries. The buildings will be repurposed into community spaces for schools, shops, cafes, sporting facilities, and health clinics. In total, in 2017, Qatar’s minister of finance said the country was spending US$500 million per week on capital projects, although Government officials have never confirmed the number. Compared to previous tournaments, according to the Moscow Times, Russia's total costs associated with hosting the 2018 World Cup was US$14.2 billion. Furthermore, South Africa reportedly spent US$3.6 billion on the 2010 World Cup, successfully spending less on infrastructure than previous hosts Germany (US$4.3 billion in 2006) and Korea-Japan 2002 World Cup (US$7 billion). None of these figures come close to the estimated cost of the 2022 World Cup in Qatar, undoubtedly becoming the most expensive World Cup in history.
With all the international attention Qatar is getting, they are now gearing up for a FIFA World Cup equity market boom as the country’s stock exchange is all set to benefit from the upcoming colossal event. With more than US$4 billion of foreign inflows into Qatar’s stock market in the first ten months of this year alone, according to equity market experts. Similar to previous World Cup hosts markets, it has outperformed peers in the run-up to the mega contest and is expected to continue along similar lines in the year after the tournament. The QSE Index, which measures 20 most significant and liquid stocks on the Qatar Stock Exchange (QSE), appreciated as much as 24.7% from the start of 2022 to April 11, 2022, but then declined to almost flattish territory in late June 2022 and was up again by 12.1% year to date on September 5, 2022. While that may not seem like a lot, it still puts the QSE Index as a relative outperformer among the most prominent regional and global markets in the first eight months of this year, as per the latest data available. “Given that the country is preparing for the World Cup for more than a decade, to focus on a short period of stock performance won’t be a fair reflection,” said Akber Khan, Senior Director of Asset Management at Doha-based Al Rayan Investment. “If we look at the performance of Qatar’s stock market in the last five years, when preparations related to the World Cup accelerated in terms of the pace of work, Qatar’s stock market is up more than 50 percent,” Khan added. With the World Cup being held in the nation, Qatari talent and entrepreneurship zeal are being strongly fostered to diversify the country’s economy to several other industries and away from its reliance on limited natural resources such as oil and gas, which is also aimed to positively impact the country during and further beyond the extraordinary event.
Sources:
Al Jazeera
Bloomberg
Forbes
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