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World Cup Predictions, with Daniel Altman

By Carlton Cook On June 6, 2014

Economist Daniel Altman describes how hosting the World Cup can have varying effects on local economies.

The World Cup of soccer is a phenomenally huge event for the whole world and this year no more so than in Brazil. Brazil though it is the home of some of the world's best soccer players and has won the World Cup several times hasn't hosted the World Cup since 1950 when it lost heartbreakingly to Uruguay and never lived that memory down. Well, there have been a lot of protests in Brazil that have suggested that all of the billions of dollars that Brazil is spending on infrastructure and updating its stadiums and security might be better spent on things that would help the Brazilian economy to grow at the grass roots like healthcare and education, worker training, housing. And those protests may yet continue during the World Cup itself. But there have been a lot of dire predictions about how safe people will be, whether the Brazilian World Cup will turn into something of a disaster and an embarrassment and I don't think they're likely to turn out to be true because we heard a lot of the same predictions before the World Cup in South Africa four years ago.

Now the World Cup in South Africa was viewed as a big risk because here was a country that had severe problems with crime and there never had been a World Cup in Africa before. So the question was how would the soccer officials and the local officials deal with all of the potential risks and things could go wrong in a country like South Africa. Well it turned out that those fears were broadly exaggerated because it was a fantastic festival of football that went off without a hitch. In fact, there was probably less crime going on during the World Cup than other times of the year because people were enjoying it and watching the soccer wherever they were all over the country. Now in Brazil things are a bit different because Brazil is an enormous country. There are big parts of the country that have not received any investment as a result of the World Cup and Brazil is in a situation where it's growth has been lagging.

Brazil can't necessarily look at the World Cup as something that's gonna stimulate its economy just as South Africa couldn't necessarily look for a big payoff from the World Cup in economic terms either. But it was something that put South Africa on the map for a lot of people and perhaps in the long term they would see something out of it in terms of tourism or at least a restoration of faith that South Africa was a place that you could visit safely and have a good time. In Brazil though I think that we're looking at something a little bit different. Brazil, to me, really needs to win this World Cup to have any economic effect because it is a time where the country has been facing some challenges. Expectations for growth have come down somewhat. The broad progress that we saw during the Luiz Inacio Lula da Silva administration has not necessarily been continued under his successor Dilma Rousseff. And so if Brazil were to win it might add confidence, add consumer confidence that could really get this economy going. In the past we've seen a pattern where countries that host the World Cup don't necessarily make off that much better economically but countries that win the World Cup do seem to get a little boost over the next few years. So this could be just the confidence boost that the Brazilian economy needs. However, to win it they're gonna need to make it through some really tough teams. So I don't know if my money's on Brazil but for the sake of the Brazilian economy it would be great if they came through.


Directed/Produced by Jonathan Fowler and Dillon Fitton

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