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Qatar 2022 more about long-term legacy than short-term gains

Qatar World Cup
Qatar 2022 legacy: Katara Towers in Lusail will continue as a hotel, residential and retail venue after the World Cup
  • Recent World Cup hosts have made losses on investments
  • Gas-rich Qatar more focused on global recognition than financial gains
  • Hospitality and transport infrastructure improves visitor prospects
  • Building relationship with neighbours Saudi and UAE

Once the last ball has been kicked, the final whistle blown and the gold trophy held aloft in Lusail Stadium on December 18, the world’s attention will move on from Qatar. 

But the tournament’s economic legacy will take longer to emerge. The history of World Cups and Olympic Games is littered with unmet promises and underused infrastructure in the years that followed. Can Qatar avoid that fate?

“Recent World Cup hosts such as South Africa, Brazil, Russia and others made significant public losses on their investments,” said Robbie Butler, co-director of the Centre for Sports Economics and Law at Cork University Business School.

While past tournaments may have boosted happiness and attendance figures for domestic league matches, he says they delivered “no economic gain to the exchequer”.

Qatar, though, is in an unusual position: its vast wealth means it does not face the same financial pressures most host countries have experienced.

Around $10 billion was spent building seven new arenas and revamping Khalifa International Stadium for the 2022 World Cup, but in total the authorities spent around $200 billion, including on infrastructure and real estate schemes such as the Doha metro and the Lusail development.

Much of that might have been built anyway, if not at quite the same speed. “It’s hard to disaggregate World Cup-specific spending,” Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington said. 

But he added: “Qatar doesn’t need, or expect to, make a return on investment in the short term. A lot of it has been driven by other, less tangible issues, such as soft power and brand recognition.”

After the tournament Qatar will have world class infrastructure but the question is what it will be able to do with it.

Qatar
Qatar has spent $200bn on infrastructure and real estate such as the Doha metro and the Lusail development

It may be hard to find regular uses for the arenas. Stadium 974 has been designed to be dismantled and shipped elsewhere – although it is not clear where it might end up – and the capacity of others will be reduced.

Two arenas will house domestic football clubs, with Al-Rayyan playing at Ahmad Bin Ali Stadium and Al-Wakrah at Al-Janoub Stadium. However, they may find it hard to fill their grounds. Crowds for a Qatar Stars league game are usually just a few thousand.

Qatar will be able to use some stadiums for future major events, such as the 2023 Asian Cup and the 2030 Asian Games. It may bid for an Olympic Games too. Such events bring in large crowds but Butler pointed out, “the infrequency of major sporting events significantly restricts the opportunity to use these facilities”. 

The additional hotel rooms developed for the World Cup and the improved transport capacity mean there is plenty of potential to accommodate more tourists, conference-goers and others. The country is aiming to attract six million annual visitors by 2030 and the profile-boost from the World Cup will have made that target easier to hit.

“Qatar is attempting to set up as a sports hub as well as a travel hub, as an alternative to the UAE. So, the big winners will be aviation, hospitality and sports events and professional services,” said Tim Harcourt, chief economist at the Institute for Public Policy and Governance at the University of Technology Sydney and a specialist in sports economics. 

Even so, the contribution travel and hospitality will make to the economy will still be relatively small compared to the hydrocarbons industry, which is growing with the expansion of output from the North Field in the coming years.

“I think that part of the [World Cup-related] infrastructure can be leveraged in the future, notably [for] the tourism sector, but with limited impact, as this sector should remain marginal in the Qatari economy,” said Pascal Devaux, senior economist for the Mena region at French bank BNP Paribas. 

“I think it will remain a gas story, especially given the coming on-stream of additional gas export capacities.”

Qatar 2022 legacy
The Museum of Islamic Art in Doha is among the tourist attractions that could benefit from the Qatar 2022 profile legacy

Soft power considerations

That points to a critical factor in Qatar’s decision to bid for the tournament in the first place. The country’s financial strength means there is no need to make the tournament’s books balance. Rather, it is part of a long-term strategy which is about diplomatic and security considerations as much as anything else.

That aspect was on display at the start of the tournament, when Saudi Arabia’s Crown Prince Mohammed Bin Salman was a prominent guest, replete with a Qatari scarf around his neck. The UAE’s President Mohammed Bin Zayed also visited while the tournament was on. 

“The Qataris have done a pretty good job of using the World Cup to strengthen regional relations,” said Mogielnicki. 

“Qatar seems to be doing what they can to ensure there’s a positive regional spillover.”

Perhaps the biggest challenge now is how to maintain its economic momentum. There is no longer an imperative for the government to invest so heavily in the local economy, so the authorities will have to find other ways to maintain growth.

“It’s been a big boost to the economy over the past decade. What other ways are you going to keep the economy growing? Qatar’s got to find a way to keep up the momentum with smart spending,” Mogielnicki said.

Some in Doha suggest there could yet be a wider boost to the economy, although that is likely to also depend on the government finding the right regulatory mix to attract and retain different industries. 

“As a legacy of this World Cup, Qatar possesses an infrastructure which can allow hosting any future major sporting event as well as any relevant international gathering or touristic activity,” said Massimiliano Montanari, chief executive of the Doha-based International Centre for Sport Security. 

“It provides an environment [that is] able to incubate and accelerate ideas, projects and business across sectors. The organisation of the World Cup is not the end but the beginning of a journey for Qatar.”

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