The Effect of the Qatar World Cup on Qatar’s Economics

The World Cup and the Olympics would be the biggest sports events in the world. They are big festivals for countries all over the world that are participating since they aim to bring people of all nations together to celebrate a great feast of athletic achievement. These sports events are usually held every four years, and participant nations compete with each other to win the opportunity to host the events since these big events bring profits for the country itself as well. The World Cup is a national competition to determine the world's best national soccer team, held every four years since 1930 under the auspices of FIFA. The 2022 FIFA World Cup which started on the 21st of November, is now being held in Qatar. This is very meaningful for the countries in Asia, as it is for the second time the World Cup being held in Asia, following the 2002 Korea-Japan World Cup. Additionally, attention from all over the world is focused on the fact that it was held during winter for the first time in history since the first World Cup was held.
The economic effect of the Qatar World Cup is expected to reach 19 billion dollars in total. In contrast to the estimated income, Qatar spent a large cost for hosting estimated to be approximately 200 billion dollars, a massive amount of money than any other World Cups that were held before. At first glance, it may seem to be losing money just by looking at the numbers. However, money isn’t the only thing to consider when talking about the economic effects of the Qatar World Cup.
In order to understand the statement, it is important to know about Qatar itself. Qatar is a small country next to Saudi Arabia, and its area is approximately 11,571km2, even smaller than New York. The total population is estimated to be 2.83 million, but as most of its territory is desert, the majority of the total population is dense in one habitable region. It is said to be the most lopsided-populated country in history. Qatar's main industries are oil and gas, and energy exports account for 86% of total exports.
Because the energy industry is volatile and unsustainable, a country with a high proportion of energy exports must develop other industries and infrastructure in order to achieve long-term growth. Qatar's infrastructure cannot handle a large number of people as people from all countries flocked to this international event: FIFA World Cup. In order to accommodate a massive number of travelers, Qatar had to expand transportation and internet-related infrastructure and build an airport and hotels. In this way, an opportunity to improve the country's own infrastructure while hosting the World Cup at the same time opened in Qatar.
In fact, Qatar only spent between $6.5 billion and $10 billion for stadium construction, while the majority of the cost was spent on infrastructure construction such as hotels, metros, and airports, according to the "Qatar 2030 Plan". In the process of constructing these infrastructures, Qatar’s construction economy has improved and it has grown into the second-largest industry after its energy industry. Even after the World Cup, the distribution business can benefit from established infrastructure such as airports, ports, railroads, and roads. In addition, geopolitically, Qatar is located in the Middle East, connecting Europe and Asia. And being a peninsular country, it is good to have a port or airport near the coast, as intermediary trade is possible with a high possibility of becoming a transit point. Qatar Airport is famous for being beautiful like a future city, and because it is an oil-producing country, it is supplied with fuel at a low price and has good price competitiveness.
This way, it can be seen that the economic effect of the World Cup can create a foundation for future industries and sustainable growth, rather than immediate profits. Of course, there are negative comments as well as positive ones. Many critics have argued that Qatar cannot recover the massive costs due to tangible and intangible economic effects such as high maintenance costs and the increase of useless facilities. For instance, Brasilia's Mane Garrincha Stadium, which was evaluated as “the most expensive World Cup stadium” because of its massive cost of 50 million dollars, was used as a bus parking lot as it could not find any other usage. Moreover, Cuiaba Pantanal Stadium, which cost more than 200 million dollars, has not been occupied for a while, and the homeless flocked to the locker room and shocked everyone. In such ways, spending too much budget on the World Cup can just be a white elephant, and the consequence of Qatar’s big investment in it is unpredictable.
It’s undeniable that Qatar’s massive budget for the 2022 World Cup may bring about good economic effects. On the other hand, it is also important to be prepared for the side effects after the World Cup so that the investments won’t turn out to be a white elephant or follow the path of the 2014 World Cup held in Brazil.