So Greece had another day of major rioting today as their government passed a big austerity measure to cut spending and raise taxes to close their budget gap so they can continue receiving fiscal aid from the EU via monetary policy. The austerity measure "aims to save 4.8 billion euros ($6.5 billion) with measures including higher consumer taxes and cuts to public sector workers' pay of up to 8 percent." [link] This comes after Greece borrowed heavily to host the Athens 2004 Olympics. The total cost of hosting that tournament for Greece's government was 8.954 billion euros (about $11.2 billion in 2004). [link] Boy, do they sure wish they had even half of those funds now! After the 2 week party of the 2004 Olympics was over, Greece was left with a bunch of stadiums that it doesn't use anymore (and are falling apart) and 11 billion dollars in debt. I hope it was at least a fun party.
This should be a cautionary tale for South Africa and any other developing or smaller developed country that wants to host a major sports tournament. These tournaments cost far more to host than you will recoup. There is a really good summary of the academic literature on this subject in the recent book Soccernomics. If you want to spend public money on the economy, do it on something economically useful like public education, health care, or your transportation network. It is extremely wasteful to do it on giant stadiums that you only use once every other week for a few hours for 6 months out of the year.
The cost to South Africa to host the world cup is a reported $3.7 billion, and could go higher with cost overruns. [link] South Africa is a developing country with a slowly growing middle class but it still has a large population of poor people. This amount of money should have been spent on something else more economically useful that would have made a real difference in the lives of South Africa's poor. I also hope that the government of South Africa does a better job of planning their budget around this debt so that they do not end up with the same kind of national crisis that Greece has right now.
I love the beautiful game as much as anyone, but the idea that Sepp Blatter and FIFA are doing these poorer countries favors or helping them out economically when they give them major tournaments is absurd and damaging.