The challenge after final whistle

The 2010 Fifa World Cup is upon us and South Africa stands to benefit from hosting one of the most-awaited sporting events watched by millions of fans across the world.

This is the first time the event is held on African soil and, in the four years running up to the games, massive investments went into building stadiums, new roads, hotels and related infrastructure in several South African cities. The South African government reportedly spent over 40 billion rand (RM18 billion) on the venues and related transport.

The payback is expected to come from a boost in tourism-related business and the construction sector, especially in terms of gross fixed capital formation and associated job creation.

A UBS Investment Research report earlier this year estimated that preparation for the World Cup has added between 0.5 per cent and 2.2 per cent to South African gross domestic product and created in excess of 300,000 jobs since 2006.

Global advisory firm Grant Thornton reportedly forecast the gross economic impact of the World Cup at 93 billion rand (RM42 billion), with 62 per cent generated before this year and 38 per cent during the course of the year.

The benefits could last longer if South Africa successfully presents itself to the world as a safe, peaceful, modernised and viable destination for foreign investment. In one report, South African President Jacob Zuma was quoted as saying that the country would benefit not just from the investment but also the unifying force for years after the tournament.

Not everyone has bought into such a positive outlook, though.

Some critics have pointed fingers at badly prepared tourism plans by the government, with widespread construction in areas remote from general tourism interest.

Others feel that South African taxpayers will be left with picking up the tab and the stadiums will be underutilised once the World Cup flies home with the deserved champion.

There is also the argument that South Africa is not the most open of economies for investment, especially when compared with China or Southeast Asia. They cite its relatively remote disconnect from global trade patterns, insufficient links to other markets on the continent and affirmative action rules as potential drawbacks for investors.

There is general agreement about the immediate benefits to South Africa from hosting the World Cup. The tourists are there, filling up the grand stadiums and swanky new hotels. The greater challenge will be what happens after the final whistle blows on July 11 and the cup is lifted. What next?