[Op-ed] The economic effects of World Cup

The international sports community is noisy with a bribery scandal involving the FIFA World Cup to be held in Qatar in 2022. Mohamed bin Hammam, former executive member for Qatar, is alleged to have paid millions of U.S. dollars into the bank accounts of FIFA officials in return for support for Qatar`s 2022 World Cup bid. The FIFA has launched a probe into allegations that he met secretly with Michel Platini, president of the Union of European Football Associations, just before voting. The scandal is a pressing matter of interest for soccer fans in South Korea, which competed with Qatar until the third round of voting for the 2022 World Cup.

Qatar is one of the world`s richest country with per-capita national income of 100,000 dollars. With a small population but great abundance in natural resources such as crude oil and natural gas, the country provides its people with everything from cradle to grave. Although Qatar`s climate is not ideal for sports, with the mercury hitting 44 degrees centigrade in summer, it won the right to host the World Cup thanks to its economic power as an oil-producing country. As the small country is preparing for the world`s largest sports event, the global construction industry has a large market for the construction and repairs of roads and airports.

Why do many countries go as far as to paying off people to host the World Cup? It is because the soccer event is one of the world`s most popular sports event together with the Olympics. A host country expects to enhance its national image and promote its economy. The private Hyundai Economic Research Institute said that South Korea invested about 1 trillion won (1 billion U.S. dollars) in building and operating stadiums for the 2002 World Cup co-hosted by South Korea and Japan but enjoyed six times as much economic effect. However, such international events are not always profitable. The 2010 World Cup in South Africa, the first African country to host the soccer event, did not earn as much as it invested. Many analysts say that this year`s World Cup in Brazil cost the country at least 11 billion dollars but is not expected to be profitable.

Many domestic and overseas companies have launched their World Cup marketing events in sync with Friday`s opening of the soccer festival. Home appliances, distribution, food and beverages companies as well as official sponsors like the Hyundai-Kia Automotive Group are actively holding market events. Home appliances companies are eagerly promoting their television sets and air conditioners, while brewery and food manufacturers are enticing consumers with World Cup products. We hope that such marketing efforts will reinvigorate the domestic consumption, which has been depressed since the April 16 ferry sinking disaster.

Editorial Writer Shin Yeon-soo (ysshin@donga.com)