There is little evidence to suggest that hosting the FIFA World Cup increases the country’s direct investment, so what are the benefits Qatar is likely to gain from the FIFA World Cup 2022 tournament. In November 2022, Qatar will be the first Arab country to host the Qatar World Cup, the World’s most prestigious football tournament.
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Qatar is also the first country since Italy in 1934 to host the tournament, which takes place every four years and has never played in it although Italy did not enter the first event in 1930, and Qatar has tried and failed to qualify for each tournament since. 1978. Both in terms of globalization and population size, Qatar is the smallest country ever to host. A tournament is a huge event in a country with a population of less than three million.
At the 2018 FIFA World Cup tournament, which is being held in Russia, the football governing body, FIFA, says more than a billion people have watched at least one final match between France and Croatia. No other sporting event can attract the attention of the international community, and many host countries are committed to using this international stadium for personal and economic development.
However, academic research on the economic impact of hosting the World Cup suggests that any gains gained are hard to see and far worse. In Andrew Zimbalist, author of Circus Maximus, The Economic Gamble behind Hosting the Olympics and Football World Cup, the evidence is clear. There is a clear tension in the province that in the question of the economic impact of major events, they do not promote economic development.
Yet Qatar, like its predecessors, hopes to reap the rewards by placing the country so clearly in the world. Is this just a dream, or can Qatar overcome this trend and see post-event growth in FDI direct foreign investment? Does hosting the World Cup only provide temporary improvements in the construction and recreation sectors at great expense, or are there other practical but important ways in which competition can benefit the country?
Qatar hopes to boost foreign investment in the World Cup
The Qatari government has previously estimated that up to 1.5 million new jobs will be created in Qatar by the FIFA World Cup 2022, mainly pre-tournament construction and tourism, and hospitality. Qatar’s investment promotion agency, IPA Qatar, has also highlighted the various ways in which it thinks the Qatar World Cup 2022 could help shape FDI. It notes that Qatar’s GDP has grown by 4.5% since its inception in 2010
Also says that the Department of Trade and Industry has identified 83 private trade and investment opportunities by 2023 related to preparation and operation competition. There is also hope for the legacy of investment opportunities. These include the establishment of world-renowned sports and health facilities, expanding the emerging sports industry, and the continued growth of tourism.
Nasser Al Khater, CEO of the tournament, said that once it was over he expected the country to focus on infrastructure development and tourism and possibly travel to Russia after the 2018 FIFA World Cup. She hopes to emulate $ 14. bn Russia says it has added to its economy after hosting the tournament. Any increase in FDI will result in a lower base. Qatar’s foreign investment inflows are small compared to neighboring regions such as the United Arab Emirates and Saudi Arabia.
Qatar’s internal FDI volume dropped year-on-year between 2014 and 2020, according to data from the UN Conference on Trade and Development, although economic sanctions imposed by the Gulf Cooperation Council (GCC) between 2017 and 2021 caused much of this down. Determined to promote FDI and build economic ties with many countries outside the GCC, Qatar launched IPA Qatar in 2019. Given its goal of attracting foreign investors, the Football World Cup seems to have arrived just in time.
Do world cups improve FDI?
It is doubtful whether the World Cup will enhance Qatar’s reputation around the world or bring reliable economic benefits. Zimbalist is convinced that hosting the FIFA World Cup does not attract additional FDI. International companies are interested in certain things when investing in the country, he said. For more to know about Qatar World Cup tickets Click here.
They may be interested in the country’s resources, its low labor costs, or its financial position, or they may be interested in the fact that the country is close to the markets in which it sells, or close to markets that offer its inputs. Those are the kinds of things that managers will consider when deciding to invest millions of dollars in a particular country. If they decide to invest in Qatar because they host the Qatar World Cup 2022, that is not a successful company.
If we look at the FDI styles in the last three athletes of the tournament, no one has seen the continued growth after the event. South Africa and Russia have seen an increase in investment leading to the tournament, with the first one having a slight rise the following year, but all three have seen a long-term decline in FDI in recent years, even before the Covid-19 breakout. The impact of traditional sporting investment is difficult to measure as it is a challenge to directly communicate, said Peter Arnold.
The UK’s chief economist at EY analyzed the economic impact of major sporting events in the UK. While it is difficult to combine any investment decision with a sporting event, Arnold says there will be plenty of high-level business communication opportunities at the Football World Cup. In Qatar, there will be major CEOs, sponsors, and potential investors all looking to come to the World Cup, and they will be meeting in an informal setting, he said. The challenge will be whether they can create a sustainable sporting legacy and investment.
How can the legacy of the tournament be brought about?
Arnold argues that sporting events can provide a soft spot for hosting countries that are difficult to measure but have a great impact. Sports have a unique ability to transcend cultural and linguistic barriers, as everyone can see an amazing piece of athletics, and the great sports stars transcend nationalism and attract the world, he adds.
To increase this soft power, governments and sports organizations should aim to create a pipeline for the next sporting events, so that the interest and good ideas created from a major event do not diminish over time, according to Arnold. Ahead of the Football World Cup, Qatar hosted other events including the Asian Football Confederation Cup, the World Men’s Handball Championship, and the IAAF World Athletics Championships.
It will also host the Asian Games in 2030. The Middle East sports sector as a whole is expected to grow by 8.7% over the next three to five years, according to a PwC study, compared to 3% worldwide over the same period. Regional events now include Formula One races in Abu Dhabi, Bahrain, and Saudi Arabia, international golf tournaments in Abu Dhabi, and tennis tournaments in Dubai. Like Qatar, its neighbors invest heavily in sports. In the Middle East, they see sport as a way to build a global brand image, and raising the profile of countries is crucial to investment, says Arnold.
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