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Friday, May 14, 2021

Report: Economy would take ‘small’ $16bn hit if Qatar loses World Cup

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World Cup Bid Celebration

For Qatar, the financial impact of losing hosting rights to the 2022 World Cup would likely be minimal, but the loss could prompt several project delays, a new report by Bank of America Merrill Lynch has said.

The findings come as the football community awaits the release of FIFA’s investigation into the awarding of the 2018 World Cup to Russia and Qatar’s 2022 bid.

A FIFA ethics committee led by American lawyer Michael Garcia is expected to release its report during the middle of this month.

Meanwhile, a leading official for Qatar’s 2022 organizing committee has said he is “confident” that the Gulf state will retain its hosting rights.

Economic impact

BofA Merrill Lynch’s report is based on a five-year projected central government spending of around $100 billion, which equates to around one third of total investments during this period.

It stated that Qatar would stand to lose about $16 billion (QR58 billion) if FIFA decides to revoke its hosting rights.

Most of that money would come from canceled stadium and hotel projects. The loss equates to around 7.5 percent of Qatar’s Gross Domestic Product (GDP) – or 1 to 1.5 percent each year in the run up to 2022.

According to Jean-Michel Saliba, a MENA economist for the bank:

“The direct impact due to potential loss of the World Cup 2022 hosting rights is small but broader infrastructure pipeline could face delays.”

Without an “execution focus,” Lusail City, the new port and upgrades to the road network could be pushed back, the report stated.

However, it added that construction would likely move ahead eventually, as many of these projects were planned before Qatar was awarded the World Cup and comprise integral parts of the 2030 National Vision.

The report, which is a client advisory and is not publicly available, lists a number of the key infrastructure projects that are already underway or which are planned, with a total estimated budget of $142billion.

It includes a number of oil and gas-related projects, the downtown Mshereib redevelopment, Energy City, Doha Metro and the light-rail and transit system.

Confidence as host

Meanwhile, a senior official of Qatar’s 2022 organizing committee has given an interview to Al Jazeera this week, voicing his confidence that Qatar would retain hosting rights.

Al Khater interview AJ

In his first interview since renewed corruption allegations arose, Supreme Committee of Delivery and Legacy’s communications director Nasser Al-Khater spoke to presenter Lee Wellings in Brazil.

Asked if he was worried Qatar would lose the World Cup, Al Khater replied: “We are not worried, we are confident that the World Cup will take place in Qatar.”

He continued:

“We have been true to what we have said in the past, to our statements that we have always put out – that we have held ourselves to the highest ethical standards stem from our hearts.

We believe it, we are confident in it, we are confident of how we have behaved.”

Al Khater also fielded a question about why the SCDL seemed to respond so slowly to allegations leveled against Qatar, saying:

“There is a culture of modesty and with modesty, it means that sometimes you don’t engage publicly, especially sometimes you feel that the engagement would bring you down to a level that you don’t want to stoop down to.”

You can view an excerpt of the interview here. The full interview is being broadcast on Al Jazeera English this afternoon.

Thoughts?

29 COMMENTS

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Kingpin
Kingpin
6 years ago

I think the loss of face would sting a lot more than the financial loss. However I do not believe Qatar will loose the hosting, whether guilty or not, to much else at stake in the background.

DavidRSS8
DavidRSS8
6 years ago

This report doesn’t take in the full picture. No country in recent memory has ever made money by hosting the Olympics or World Cup when the wider economic impact is considered. Costs of infrastructure projects, security, etc. cost far more than any tourist dollars brought it.

The primary benefit for any country is the prestige of hosting the event and the world attention it will receive. The loss of that cannot be measured in dollars. The humiliation of losing the right to host, would, however, be a major blow to Qatar’s ego. And, in my view, unfair.

FIFA is rife with corruption at every level, and I seriously doubt any country could win a bid on pure fair play. If FIFA wants to clean up its act, then great; it should do so. It should then substantially compensate those countries whose recent bids had no taint of corruption. Personally, I think Australia and U.S. could legitimately launch a lawsuit against FIFA–not to have the WC awarded to them, but for FIFA to pay damages for creating a corrupt system. Neither country needs the money, but such fines would make FIFA clean up, as money seems to be the only thing FIFA listens to.

Myrddin
Myrddin
6 years ago
Reply to  DavidRSS8

Agree with all you said:

I will always maintain that Qatar was a bad choice for the WC, but what is done is done. It would indeed be unfair to strip Qatar of the hosting rights now, better that the international spotlight motivates Qatar to implement the changes that it keeps threatening to change.

The real villains are FIFA, and Blatter. I hope this report condemns FIFA to change, and Blatter to, at very least, early retirement. If FIFA does not entirely overhaul itself, then I anticipate a new World football organisation to emerge?

MIMH
MIMH
6 years ago

Qatar itself wouldn’t lose anything, if it does not build a few stadiums that is a saving! The WC is a financial burden for the country that hosts, they pay all the costs of the tournament and FIFA keeps all the money. FIFA gets all the TV rights and ticket sales, that’s approx 4 billion dollars in their pickle, nothing for the organisers.

Who writes these rubbish reports? Qatar would save huge amounts of money not holding the WC and the delay on some projects now not tied to 2022 is actually a good thing.

صـقـر الأسـود
صـقـر الأسـود
6 years ago
Reply to  MIMH

Its actually true that the organizing country doesn’t get much out of the world cup; its FIFA that makes all the money. Financially, Qatar will not be affected much by it though I strongly feel that Qatar will not loose the hosting rights. As someone said above, ‘What’s done is done!’

MIMH
MIMH
6 years ago

I doubt they will lose the WC either unless someone produces damning evidence of misconduct. Seeing that FIFA are investigating themselves that is very unlikely to happen even if it exists.

samesamebutdifferent
samesamebutdifferent
6 years ago

“Economy would take ‘small’ $16bn if Qatar….”

Small what?

Shabina921
Shabina921
6 years ago

That should read small hit. My mistake – fixed now.

MIMH
MIMH
6 years ago
Reply to  Shabina921

It’s not right though, Qatar would spend possible (and that is debatable in this poor report) less but that doesn’t mean the economy would take a hit. It would only mean less workers would need to be imported and in reality less foreign companies making money. It has virtually no impact on Qatar itself.

Diego
Diego
6 years ago

I’d like to think this report will put an end to this discussion. My opinion is that FIFA is ripe with corruption,loves the money rolling in,and has many “lifers” in it’s system who don’t want to give up being on the cocktail circuit. Bladder being one,much like Eccelstone in F1. I think,while some find fault with Qatar’s bid and ability to put on a WC that can mix beer,fans and all the things that go along with it,they can do it. Will it serve the Country well afterwards, I hope so.

It’s good to bring the event into a Country that will not suffer from financial kidnapping that comes with preparations. It will provide an opportunity for Qatar and the region to provide fans with experiences they can promote after they go home. It’s a large challenge,and one that should be allowed to move forward. More focus on FIFA might suffice better now.

Muraleedharan
Muraleedharan
6 years ago

Qatar is on the way to National Vision 2030. World cup 2022 is a stop on that way. If it is hosted on not, the way will continue to reach their target 2030. The event 2022 is not for ever, but for two days or maximum on week, but National vision 2030 is forever, which is benefited for the next generation. World cup comes every year and there are hundreds of chances to participate or host that event in future. National vision is a pre planned program, which is nothing concerned with 2022 event, because it is a celebration or festival for two days.
I am not interested to comment regarding FIFA’s black magic, or some kinds of cheating after bribing from their client. They think, they will be benefited if they can raise the corruption issue once again by the help of Media mafia.
I request the mafia to stop the insult and harassment, because it is enough and don’t try to over turn the limit. All public are not idiots and we can understand the hidden agenda of these mafias.

Aussiegirl
Aussiegirl
6 years ago
Reply to  Muraleedharan

You might want to check your World Cup facts. I don’t really follow soccer but I’m pretty sure it’s been running for longer than 2 days and I don’t think they are held every year.

Muraleedharan
Muraleedharan
6 years ago
Reply to  Aussiegirl

I had mentioned yesterday that, it is running 2 days to one week. Even if it is for one month, it is not for unlimited period. If the even is not hosting every year, it is not the last and final event in future.

What I meant is the event will not affect all people of the nation, bot the vision will affect all people of the nation including me and you. I am not a fan of FIFA and unaware about the duration of the event and conducting intervals. But, I am quite sure that I am a fan of the vision 2030, which will or must benefit the next generation, whom nobody had seen yet.

Don’t take a sentence from my text, take the contents to reach to a conclusion,

Michael Fryer
Michael Fryer
6 years ago
Reply to  Muraleedharan

Enlighten me, because I have no idea… what are the top 5 things you like about Qatar National Vision 2030?

Yacine
Yacine
6 years ago
Reply to  Michael Fryer

Loll I like this one @michaelfryer:disqus 🙂

Michael Fryer
Michael Fryer
6 years ago
Reply to  Yacine

Do you think this guy has ever even read the National Vision? Let’s make it easier for him. Name the top 3 things in the vision he finds most inspiring…

Muraleedharan
Muraleedharan
6 years ago
Reply to  Michael Fryer

Not 5 things, A to Z, I like. Kindly read one time the text, available in different sites. You will also like. This is not like India’s five year plan, which Indians are expecting 33% will be established. No problem, some thing is better than nothing. Because, India is planning in every 5 years, which is not limited for a particular period, but forever (5 year plannings)
Being Qatar is rich and a small country comparing to an Indian village, they can achieve every thing of their requirement before 2030.
But when you are coming to a conclusion, FIFA is one of the event like Metro, New port, Lusail and /or Musheirb projects. And FIFA is like a beautiful fire work for some days and the other projects mentioned above will last forever benefited for generations including our children.
Patriotism is not by birth, it is a feeling, which comes from the soul. If the soul is dead, no use withe human-being. I an proud of my Qatar.

Deepak Babu
Deepak Babu
6 years ago
Reply to  Muraleedharan

Thank you for the laugh. Have a nice weekend.

Deepak Babu
Deepak Babu
6 years ago
Reply to  Muraleedharan

Pass me some of whatever you have been smoking.

samesamebutdifferent
samesamebutdifferent
6 years ago
Reply to  Muraleedharan

“The event 2022 is not for ever, but for two days or maximum on week”

Really?

“World cup comes every year and there are hundreds of chances to participate or host that event in future”

Oh dear

“nothing concerned with 2022 event, because it is a celebration or festival for two days.”

Again, really?

” FIFA’s black magic,”

Wat

“if they can raise the corruption issue once again by the help of Media mafia.”

The first step to overcoming delusion is recognising you have it

Mr. B
6 years ago
Reply to  Muraleedharan

You sound like you think there’s a conspiracy against Qatar regarding the World Cup. The only ‘conspiracy’ is that people worldwide think the treatment of workers in the country is shameful and that nobody should be allowed to bribe their way into hosting international events. That would be the case if it were Britain, Mexico, the U.S., or any other country. It’s not about Qatar; it’s about the sins taking place here.

Mr. B
6 years ago
Reply to  Muraleedharan

Request the harassment? Does bad news bother you so much then? A mature nation can handle looking its demons in the face.

Alicia
Alicia
6 years ago

Human rights for expat workers is a big issue and it deserves attention. But it’s been happening for a very long time and is a problem in every other gulf country. Until now it has hardly been given any media attention. If you want to support this issue, do so because you are passionate about human rights. Don’t start making noise because you’re annoyed that Qatar won the world cup by paying for it. Or should I say paying more for it than any other country that has bribed its way into hosting a major sporting event. This is hardly the first time it’s ever happened.

Expat Girl
Expat Girl
6 years ago
Reply to  Alicia

Completely agree!! I am so glad that the human rights issues are finally getting media attention. When I first moved to Qatar and I learned of the dire human rights issues here, I remember thinking “does CNN know about this?!?!”, “how are they allowed to get away with this?!” and “why is this not all over the media?!”. But now it is, and I am so glad because I hope that this will finally make some change happen.

Bornrich
Bornrich
6 years ago

The article says: “Al Khater also fielded a question about why the SCDL seemed to respond so slowly to allegations leveled against Qatar.”

Just a simple statement of denial from the organization would have sufficed. No need to respond to allegations until later. Most organizations taking on a world event such as this will employ the services of a full time, professional PR agency. Better to forgo an event or two and, instead, spend the money on a public relations disaster response plan. And some training for official spokespersons.

Restie
Restie
6 years ago
Reply to  Bornrich

There have been numerous prompt denials of wrong doing, I don’t know where you get your information from.

outdoorsboys
outdoorsboys
6 years ago

The FIFA process is undoubtedly corrupt ergo it has always been corrupt. The whole of football wallows in money and has no respect for the wider community, only the money making machine. For that reason, I see no reason why Qatar should lose the hosting rights- may or may not have been involved in bribery, but certainly no more so than any other bidder, truth be told.
The value of the WC tournament is not monetary for Qatar, in fact it will be an expensive exercise for the Nation, certainly a challenge for Qataris. The value is for the nation and the region- job creation, company development, economic stability for millions, the encouragement for the participation in sport, the impetus for change to labour laws, the development of new Renewable technologies, the opening of debate- the list is endless.
FIFA should not change the venue for the 2022 event. THAT would be the most corrupt act of the whole sorry piece.

Abdel
Abdel
6 years ago

Good riddance!

Muraleedharan
Muraleedharan
6 years ago

Every body is looking the future of a dead issue. The issue had closed and still some body are trying to smell their teeth. If all world is against Qatar in the above issue, Qatar will conduct FIFA event successfully and whom they are crying today, will sleep without any compliant,after the Event. Because we are humans and have the blessings of God to forget. So, kindly STOP this nasty discussion and don’t try to smell your tooth pick.

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