Developing Countries:
Hosting significant events have traditionally been the privilege of developed nations, but since a few years, ago less developed countries also could organize these critical events. In 2010 and 2014, South Africa and Brazil respectively had the opportunity to host the world cup. This step seems a positive one for developing nations, but we have to see all picture and see what the benefits and expenses that these games generate are.
Events such as the World Cup give them the incentive to create or improve infrastructures like stadiums, airports, roads, etc., promote international exposure, and increase tourism and business partners. It is also a way to speed up investments that, in other circumstances, would take more time to happen or won’t happen at least from that values.
In developing countries generally, the infrastructures are not the best, so to be able to host this type of event, the states have to invest a lot, which means that they will have to spend less in some regions of the public services and borrow a lot of money. It is a massive investment for the government and society. Another extra challenge when we talk about finances is the governments that tend to be more corrupted and less efficient.
South Africa
According to the Department of Sport and Recreation of South Africa, the government spent a total of USD 3.12 billion on transportation, telecommunication, and stadia. Although the significant investment provided valuable lessons for a developing country such as how to budget, manage, and implementing mega projects and to improve communication between different departments in the government.
The investment had his compensation in the same year of the world cup with a positive impact of 509$ million to the real GDP. Moreover, it created 769$million in benefits for households.