Politics and the World Cup

So, the World Cup is upon us. The great celebration of soccer/football (depending on if you live in the US or not - I will just go ahead and call it soccer in the rest of this piece...don't take it personally, non-Americans, because I don't get the name, either) across the globe that comes around every four years. Everyone gets into it. I was in Pakistan in 2002, and people were out in public places extra late at night to see some of the games - and they didn't even have a team in the tourney! Of course, there's a lot of mainstream discussion about how soccer brings the world together. You've possibly seen the Bono-voiced commercials about this...man, is that guy promoting everything??? ESPN has had a bunch of segments suggesting the same theme - unity and peace from the game. I don't doubt it has some effect, actually. But, these games are also being held in South Africa. That by itself makes it a really big deal, even for the World Cup. There's also the whole FIFA-is-a-thug-gangsta thing, which is really wreaking havoc on South Africa, and might do the same in Brazil in 2014. Yeah, that's right, there are TONS of politics in the World Cup coming up! Shocker, right?

The South Africa angle by itself makes for a really conflicting story, actually. On the one hand, there is a general feeling of pride, especially in the global South, and with non-white folks around the world, that this is a huge deal. It is. A World Cup in a formerly-colonized land? A non-white country? South Africans have to be very proud of this, and I can attest that lots of people around the globe are as well. And if an African team can make a good run, like Senegal in 2002, that would be incredible. So, yeah, lots of positive vibes about South Africa being the site.

Of course, South Africa isn't a well-off country, either, and FIFA does some serious dirty work on those countries. 24% of the population is unemployed, and 50% live below the poverty line. It's also got a decent amount of debt right now - almost 40% of its GDP. So, not exactly a fantastic economic story. Now, this is where Babyface Nelson...er...FIFA comes in.

So, South Africa actually had pretty good stadiums. I mean, they hosted the Confederations Cup there in 2009 for two weeks and didn't seem to have many problems. But, for the World Cup, they had to build new stadiums, on their own dime. Total costs? 1.12 billion dollars. The costs for building new transportation systems? 1.2 billion dollars. Not cheap at all, and seemingly an insane amount of money to spend when nothing seemed terribly bad the previous year for a major soccer tournament. These are MAJOR expenses, especially for a country that doesn't have a lot of money to throw around. I get that FIFA wants to ensure everything is top-notch for the World Cup, but come on - I remember games in Giants Stadium (which, btw, is in New Jersey, not New York - Jersey represent!) in 1994, and Giants Stadium wasn't a Rolls Royce by any means. There had to be a much cheaper way - upgrades on the stadiums from the previous year seemed reasonable. This doesn't. It's like the debate on public financing for US sports stadiums, a hot-topic at all times. These sweetheart deals usually cost the public dearly - no real economic analysis shows building a stadium improves the local economy, even though advocates always claim that's the case. In this case, these new stadiums are even more costly, given South Africa's economy, compared to the US. For a good discussion about public financing of stadiums in America, check out Field of Schemes.

People were displaced from their homes to make way for the new stadiums. FIFA tried to brush away any signs of poverty from sight. As Dave Zirin points out, "thousands have been forced from their homes into makeshift shantytowns, to both make way for stadiums and make sure that tourists don't have to see any depressing scenes of poverty. The United Nations even issued a complaint on behalf of the 20,000 people removed from the Joe Slovo settlement in Cape Town, called an "eyesore" by World Cup organizers."

FIFA has also cracked down on the informal economy around the stadium. Many people work right around the stadiums, selling food, drinks, souvenirs, etc., to make a living. In light of the World Cup, many had been increasing their sales slightly. However, FIFA has made all of that illegal. They have set up a 1 kilometer barrier - merchants unlicensed by them cannot operate within 1 km of the stadiums now. Those who run stores around the stadiums also cannot make any money off the event, unless they are willing to pay a steep price to become authorized to sell items. No merchants can use any World Cup logos without paying a large fee as well. So, FIFA essentially killed off the chance for poor South Africans merchants to make some money off the World Cup by getting the government to change the laws for them.

There's also the issue of labor. Instead of using South Africans to formulate and produce the merchandise, FIFA farmed most of that out to foreign firms, despite its claim to want to distribute the economic gains from the World Cup to ordinary South Africans. There's the issue of soccer ball production, largely done in foreign countries, particularly Pakistan and India, where labor laws have been ignored. Not a huge concern to FIFA. There's the fact that the mascot toys for the World Cup were also not produced in South Africa, which would have been a boost to their economy, but rather in a Chinese sweatshop via a subcontract from Global Brands Group.

The World Cup will make a hell of a lot of money. The TV deal alone is worth more than the revenue from the previous two World Cup TV deals combined. South Africa will see little of it, while they foot the bill. FIFA only pays the prize money, and expenses for travel and preparation for the teams. FIFA will get up to $4 billion from the event. (This is a lengthy report, but goes through the issues quite thoroughly). South Africa, not so much. For instance, they get ZERO percent of the TV revenue (which is about $2b). FIFA gets to pocket most of the money. Back in 2005, 1 in 3 South Africans hoped to personally benefit from the World Cup. Tellingly, today, that number is at 1%. This is a reason many of them have been protesting so vigorously. Over 70,000 South Africans have taken part in strikes against World Cup related projects since 2007.

So, despite all the warm and fuzzy stories you're likely to hear in the next few days and weeks (and many of them are completely legitimate - a World Cup in an African nation is an incredible thing), don't forget that there are a lot of ugly politics involved in this World Cup. Like most others. FIFA has done what it usually does, act all gangsta and extort everything from a host nation while pocketing most of the money. In this case, the host nation happens to be a poorer one, in the global South, which means the debt it will likely incur, and the expenditures for the World Cup that were diverted from other critical areas of national spending, will have much greater consequences. And guess what - in 2014, FIFA takes its act to Brazil. Don't expect things to get any better - unless people understand what exactly happened in South Africa (and, honestly, most World Cups).

It is an incredible event, no doubt, but FIFA does some horrible things to host nations. When it steps on a poorer country, things can get very bad very quickly. Host governments also go along with this, so it's not like they're not complicit in the problem as well. For all intents and purposes, FIFA rents these governments to do what it pleases. Now, they obviously want the World Cup, so they're sort of held hostage, but is the price worth it? That's what they should ask themselves. If it is not (it doesn't seem to be), then they shouldn't play ball. So, shame on these governments for giving in to FIFA. Of course, you get FIFA to stop being such a bully, the problem goes away. Also, this creates a major advantage for richer countries to host such events, since FIFA's economic extortion doesn't cause as much relative damage in their nations as it does in poorer ones. But, it is a fair point to say the host governments are also responsible for letting FIFA do what it does.

However, if people know what happened, they can raise awareness, watch the games while protesting FIFA through acts of civil disobedience (or simply writing letters to editors, telling their friends, etc.), and supporting those on the ground taking action against FIFA and the South African government. Hey, Chicago residents knew that the IOC for the Olympics work the same way. They wanted no part of that, which they shouldn't. You deal with dirty actors like FIFA and the IOC, you'll get burned. Their protests scared the IOC enough to not bring the games to Chicago. And who knows, with enough pressure and education, maybe we can force corporate sports conglomerates like FIFA and the IOC to stop their game of extortion. There's another way to put on these great events without killing the host nations. We don't need any more sad stories like South Africa, Invictus in reverse, as Zirin calls it.

Edit: For another great piece on the World Cup, read this.