Starting on 21 November, the 2022 World Cup brought Qatar, a small but gas-rich nation in the Persian Gulf, to the world’s attention. It is estimated that a shocking $229 billion has been spent to construct airports, transport links, and sports stadiums to prepare for this huge event, making the Qatar 2022 World Cup the most expensive one in history, costlier than all the others combined! What has motivated Qatar to invest this fortune in hosting this world cup? What will Qatar gain in return? In this article, the benefits Qatar could receive will be discussed, and a thorough understanding of the economics involved in the 2022 World cup will be provided.
Construction of Infrastructures
According to the GUIDE TO THE BIDDING PROCESS FOR THE 2026 FIFA WORLD CUP, the stadium requirement of the host country of the world cup is to have a minimum of 8 stadiums that can accommodate 40000-60000 spectators, and the stadiums for opening matches and finals should have a seating capacity of at least 80000 fans (“Official Documents”). Qatar, which previously opened the Khalifa International Stadium in 1976, thus, constructed extra 7 stadiums, including the spectacular 80,000-capacity Lusail Iconic Stadium. In addition, to link these stadiums and provide an impressive world-cup experience for the fans, the transport system around the stadiums and host cities has been upgraded—five-lane highways and a $36 billion metro system, and countless entertainment facilities have been built (Ogden).
Not surprisingly, the construction of these infrastructures brings a huge return to the economic development of the country. The most evident privilege is the direct creation of employment for the whole country: Qatar has predicted that 1.5 million new jobs will be created in sectors such as construction and hospitality (Allison et al.). As a result, Qatari’s living standards have been raised, and foreign workers are attracted. Further, the holistic improvement of the physical infrastructures such as roads and subway system in Qatar could enhance factors mobility and increase productivity and reduce firms’ costs, shifting the aggregate supply curve to the right, reducing cost-push inflation, and increasing the real GDP.
Tourism and International Profile
Qatar World Cup is a catalyst that propels the growth of the tourism industry, attracting tourists both in the short term and the long term. In the short run, football matches directly bring a vast number of fans to the country: more than 1.4 million fans across the globe have gathered in this small country that only has a 2.6 million population during the FIFA World Cup 2022 (“Qatar Hosts More than 1.4 Million Visitors during FIFA World CupTM | Qatar 2022TM”). This sudden boom in the number of tourists sharply increases the revenue of restaurants, hotels, and firms surrounding the stadiums, raising the income of the locals and boosting the entire tourist industry short term.
Nevertheless, the benefits are far more than that and can persist in the long term.
The economy of Qatar didn’t prosper until the discovery of petroleum in 1939 and production in 1949. Theretofore, the poor gulf state mainly relied on pearling, fishing, and some trade (Anthony et al.). It is Petroleum that brings opportunities, development, and affluence into this country, making it a rich land, but it is also this black oil that puts labels on Qatar and creates rigid impressions for people—whenever people mention Qatar, the descriptive words that first come up with are “wealthy” and “gas-rich” rather than a scenic, exotic tourist resort or an Arabic country rich in history. The Qatar World Cup, therefore, is a bold bet that could focus the world's attention on this small country and change the way that the world views this nation.
It turns out that the decision is correct and effective!
Despite controversies over poor working conditions for migrant workers, a ban on alcoholic drinks, and corruption scandals, the general appraisal of this World Cup and this gulf nation is positive. Fans and tourists are impressed by the huge, grand, and unique stadiums, the convenient transport system that can enable them to travel to the other stadiums, and the luxurious shopping malls and hotels across the nation. “The feedback we have had from all stakeholders, including fans, players, the media, volunteers, and tournament officials, has been overwhelmingly positive. Smooth transport operations have made it easy to get around, and everybody has immersed themselves in the party atmosphere across the country. We have no doubt this tournament will leave a huge legacy for the country and region – socially, economically, and environmentally,” said H.E. Hassan Al Thawadi, Secretary General of Supreme Committee for Delivery & Legacy and Chairman of FIFA World Cup Qatar 2022 LLC (“Qatar Hosts More than 1.4 Million Visitors during FIFA World CupTM | Qatar 2022TM”). What’s more, as the first Middle East country that hosts the world cup, Qatar also promotes Arabic culture to the rest of the world. Arabic elements are highlighted in this tournament: the mascot of the world cup, La'eeb, is designed in the form of a traditional keffiyeh headdress. The Lusail Iconic Stadium resembles a golden bowl lying in the desert. Thus, the 2022 Qatar World Cup is a success, and it will improve the international profile of Qatar, proving that Qatar is not only a country full of oil but also a country capable to host such a mega event, a luxurious tourist destination, and an Arabic country with characteristic history and culture. This, in the long run, attracts tourists to visit this mysterious middle east nation.
Psychology of Citizen
Previous studies about World Cups display that the effect of such a tournament is not only reflected in the economic statistics and performance but also in the psychology of citizens, which is difficult to measure. For instance, Allmers and Maennig (2009) defined a “feel-good” effect brought by mega sports events such as the Olympic games and World Cups, illustrating that the relaxed, free atmosphere brought by the World Cup and the increased topics of conversation could trigger citizens, even those who do not come to watch the games, to consume more due to the sense of pride and increased level of confidence in the performance of the economy. This is verified by Heyne et al. (2007), who employ willingness to pay (WTP) to measure the increased purchasing power of citizens. Based on ex-ante and ex-post studies of the 2006 German World Cup, they found that there was an increase in the average WTP of citizens in the sample after the world cup. Besides, the birth rate and the incentive of workers might also rise due to the good mood of people.
Since Qatar is the first Middle East emirate who host the world cup in football history, and the event ran smoothly and has been brought to a successful close, joyfulness and pride suffuse the whole country.“I was so nervous before the opening game; worried sick that anything — no matter how minimal — would be jumped on by the media,” said Abdulla al-Darwish, a Qatari working in finance. “But I calmed down after kick-off.” (Noble and Kerr)
Qataris are now the second happiest in the world (the first happiest are the Argentineans, who just witnessed their third World Cup championship) and would like to consume more in the next few decades due to their good mood, not to mention the possible increase in birth rate and labor productivity.
Conclusion
To conclude, the Qatar 2022 FIFA World Cup will be a huge success and beneficial for Qatar as it drives the construction of physical infrastructure, boosts the tourist industry, improves the international profile of the country, and creates a “feel-good” effect across the nation.
Reference
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“Official Documents.” Www.fifa.com, resources.fifa.com/mm/document/affederation/administration/02/91/88/61/en_guidetothebiddingprocessforthe2026fifaworldcup_neutral.pdf. Accessed 8 Jan. 2023.
Ogden, Mark. “Qatar’s World Cup Preparations: Are the 2022 Hosts Ready for November?” ESPN.com, 21 Sept. 2022, www.espn.com/soccer/fifa-world-cup/story/4750906/qatars-world-cup-preparations-are-the-2022-hosts-ready-for-this-winter.
Allison, Micah, et al. “FIFA 2022: The Benefits for Qatar and Potential Risks.” Democracylab.uwo.ca, 2022, www.democracylab.uwo.ca/Archives/2017_2018_research/construction_in_qatar/fifa_2022_the_benefits_for_qatar_and_potential_risks.html.
“Qatar Hosts More than 1.4 Million Visitors during FIFA World CupTM | Qatar 2022TM.” Www.qatar2022.Qa, 18 Dec. 2022, www.qatar2022.qa/en/news/qatar-hosts-more-than-one-million-visitors-during-fifa-world-cup.
Anthony, John Duke , Crystal, Jill Ann and Zeidan, Adam. "Qatar". Encyclopedia Britannica, 7 Jan. 2023, https://www.britannica.com/place/Qatar. Accessed 8 January 2023.
Allmers, S., & Maennig, W. (2009). Economic Impacts of the FIFA Soccer World Cups in France 1998, Germany 2006, and Outlook for South Africa 2010. Eastern Economic Journal, 35:4. 500-519
Heyne. M., Maennig.W & Süssmuth.B (2007). Mega-sporting events as experience goods? Bremen University, University of Technologie Munich and Hamburg University, Working Paper
Noble, Josh, and Simeon Kerr. “Qatar’s $200bn Infrastructure and On-Pitch Action Confound Doubters.” Financial Times, 18 Dec. 2022, www.ft.com/content/a9ed37f8-1ac3-4b11-931e-300caf5adb41.