Comparable Sporting Events - Case Study Example

Comparable Sporting Events of Learning Introduction According to Levermore, developing countries could use sporting events to foster their development process (Levermore, 2011c). In essence, it has been used in creating awareness on health issues, helping in education, fostering unity among the diverse communities (Levermore, 2011c). Therefore, many people have viewed sporting events as contributing to the development of the host country. Apparently, the developments vary from one country to another, and cover the entire physical, social, cultural, religious, political and economic infrastructure of the country. Sporting events need a hospitable environment where the players, coaches, management teams, and fans are assured of safety during the games. In this regards, it requires adequate preparation that sometimes, cost huge amount of money that might be beyond the scope of most countries. As an economically and politically mature country, Brazil offers the most suitable ground for hosting international sporting events. In addition, the condition has made the country to be an attractive market for most of the world’s foreign investors. The paper is a reflection on comparable sporting events, outline the likely strengths and weaknesses of the development impact the FIFA World Cup of 2014 will have on Brazil, in terms of economic development, transportation and facilities among others. Furthermore, it compares the coming event with South Africa FIFA World Cup of 2010 and highlight issues such as: Legacy of the event, clear people around stadiums areas, corruption and corporate social responsibility. Reflection on Comparable Sporting Events Brazil has hosted many international sporting events, because the country’s political and economic development has rapidly risen beyond the global economic crisis (Alves, 2011). As a result, the country has become more attractive, with strong economy that had persuaded most foreign investors at the global level to put businesses, which guarantees high returns and giving the consumers high quality services (Alves, 2011). In the South African situation, the FIFA World Cup of 2010 really brought many developments, considering that the country is classified under the low-income group. However, the developments apply equally to developed countries (Levermore, 2011c). To emphasize the contribution of sports in education and awareness creation, many sporting events particularly the FIFA World Cup help in publicizing awareness on policies relating to disease epidemic, corporate social responsibility (CSR) plans (Levermore, 2011b). Through such knowledge and consciousness, many countries achieve development initiatives or/or programs, by making sure that the entire population adopts new health requirements, thus remaining fit to carry out the development agendas (Blowfield, 2005). Sporting events need adequate and world class playing grounds, modern accommodation and dining facilities, efficient transport, communication systems, and guaranteed security among other hospitality requirements (Alves, 2011). Notably, with highly diversified economic system in Brazil, dedicated trading partners and the tight regulation that the government has imposed on the financial sector, the country’s economic performance has risen above the recent world crisis (Alves, 2011). This has made the country a better place for economic investment in the sporting industry. Apparently, those were the conditions, which made the country to attract a pool of foreign investors in the sporting industry to boost the country’s image on such events. Therefore, the country is promising, as one of the best world market, which is a major consideration before putting up a significant investment (Football for Development, 2010). In addition, the sports sector, according to Levermore creates a relationship that associates CSR to development and sport (Levermore, 2011c). In reality, this is an indication that CSR programs, which are communicated through sports, could lead to economic development of the host country (Blowfield, 2005). Potential investors project the future of a place through examining the stability and trends of economic indicators. Notably, a positive trend including high return on investment, improved security and stable economy, politics and the general infrastructure development indicates the country’s stability (Darby, 2002). Notably, stability and security are the pre-requisites for an international investment. Perhaps, those are the combinations of factors, which have made the country to be successful in its proposal to host international games, including the FIFA World Cup of 2014 and others (UN General Assembly, 2009). Comparing the South Africa FIFA World Cup of 2010 and the FIFA World Cup of 2014 in Brazil, one realizes that the events have various developmental impacts on many sectors of the economy. Similarly, World bodies, including the United Nation, European Union, FIFA, NGOs, football clubs, Unions, Players, governmental bodies, sport organizations and academies among other formally link world Cup to development (Levermore, 2011c). Likely Strengths of the Development Impact of the FIFA World Cup of 2014 in Brazil In essence, the development impacts of the FIFA World Cup of 2014 in Brazil is likely to draw strengths from the country’s fiscal discipline, political stability, firm macroeconomic indicators, adequate international reserve, currency stability, and the extensive international consumer, oriented market (Alves, 2011). Notably, the strengths are based on a number of factors including fast economic growth, increasing GDP growth, large market, increase of the middle class, population growth in urban centers, and escalating energy consumption in the country (Alves, 2011). Alves noted that the challenges that Brazil faces, are not as unpredictable as those in emerging markets, making the country to have more investment potential (Alves, 2011). However, in South Africa, the 2010 FIFA World Cup was viewed by many as the healing process, to eliminate the legacies of apartheid (Levermore, 2011c). All in all, it helped in educating the people, increasing health awareness, unifying the diversity, and advocating for gender equality: these are all pre-requisite for economic, social, cultural, religious, political and physical development (Levermore, 2011c). Fiscal Discipline The developmental impact of the country is also likely to draw strengths from the fiscal discipline that the authority has put in place (Matheson, 2009). For example, the resilient banking and financial system, and sound accounting practices in the country have kept inflation under control (Alves, 2011). Being the first country to overcome the recent international recession in Latin America, Brazil has proven its strength concerning the monetary policies it practices and the workability of its development strategies (Guesnerie, 2001). In addition, the country suffered less severe impacts from the last financial crisis, which rocked the whole world, compared to more developed economies such as USA, Asia and Europe, indicating that their fiscal policies are able to fight recession through reducing the impacts (Guesnerie, 2001). This has increased the country’s image and strength to achieve the development goals with the trading partners. As a result, Brazil has become attractive to prospective foreign investors (Alves, 2011). Precisely, it is the ethical policies are likely to lead the country to the World’s most preferable investment destination, thereby enhancing the country’s development even after the end of the FIFA World Cup of 2014 (Howel, 2010). Political Stability Notably, political stability is one of the major strengths of the development impacts that the event would have on the country (Football for Development, 2010). Having embraced democracy as a system of government, the country has developed strong administrative and governmental institutions, which ensure stable political atmosphere. Since political stability is significant to the country development, the situation in Brazil is likely to attract foreign investors to start strategic businesses in preparation for the sporting events (Levermore & Beacom 2009). The likely areas, which would attract potential investors, include accommodation, sporting grounds, transport facilities, communication systems, and world-class hotels. As a global event attracting many nations, the FIFA World Cup of 2014 is expected to create more development opportunities in such areas, which would develop the country (Levermore & Beacom, 2009). Considering that some of the investments such as hotels, communication systems, accommodation facilities and sporting grounds are permanent investments, the country stands to benefit from them for a long time, even after the sporting events are concluded. This is an indication that, the sporting events would create a developmental legacy to the country and increase the GDP (Cornelissen, 2011). In anticipation of the sporting events, the stable political system would facilitate the development of roads in the country o make transportation easy and cheap. In addition, the developed road networks would attract even the local inventors in the transport industry, who would be interested in ferrying the players, fans and other equipment from one stadium to another (Maennig & du Plessis, 2009). Notably, World Cup events attract hundreds of thousands of people, thus providing such facilities would be of great importance and beneficial to the country. Moreover, the investors, whether local or foreign understand that with political stability, the authority would make sure that there is enough security in country. In reality, security is another important aspect of making investment decisions and sport management (Lussier & Kimball, 2003). Once the country’s security is predictable, it would be safe for establishing investments in anticipation of the sporting events. Macroeconomic Development Certainly, the country would draw its strengths from the firm macro-economic indicators, which it has exhibited. For example, with the adjustments that the country made on the macroeconomic essentials, the economic climate of Brazil currently depicts less volatility to trade crisis (Feenstra, 2003). Indeed, this makes the country to be attractive to the investors, who would like to reap from the crowd attending the World Cup events. The country intends to benefit from globalization and international trade, where the business players from different parts of the world (Feenstra, 2003). Essentially, the business players would identify and invest in areas targeting the participants and fans. In addition, the trade between Brazil and other different countries would eventually increase the relation between the trading partners and promote international understanding. The other important aspect of the country is that inflation control is their main focus of their economic policy (Matheson, 2009). As an inflation targeting country, South Africa gained from the overall growth in its macroeconomic indicators, including the GDP that hit R51.1 billion (US$ 7.46 billion) (Levermore, 2011c). In addition, the estimated one of the recorded 2.3 percent growth rate was a direct impact of the 2010 world cup in SA (Mail & Guardian, 2010). International Reserve Since the country has adequate international reserve and the FIFA World Cup of 2014 would attract participants and fans globally, the country would focus on boosting its international reserve to cater for the players, fans and other prospective business operators. Indeed, they would need funds for making transactions and since they come from different countries with varying currencies, increasing their international reserve would facilitate the business transactions. In turn, adequate international reserve makes the country a suitable place for doing international business, and subsequent development of the country. In South Africa’s case, Levermore argued that the sporting events brought huge amount of ‘fresh money’ into the economy (Levermore, 2011c). It is somewhat contrasting the phenomenon in developed countries, where they need adequate reserve of the foreign currencies to help in facilitating the exchange. Consumer Oriented Market In essence, the investors in Brazil target the FIFA World Cup of 2014 and most of their businesses would be consumer oriented. Apparently, the permanent investments would benefit from the country’s extensive international consumer, oriented market even after the end of the sporting events (Levermore, 2011a). Such markets would make the country draw its developmental strengths, because the increasing population of the country coupled with high consumption nature would guarantee the business people sustained growth and development through CSR (Levermore, 2011b). World Cup is literally an event for business, because South Africa benefited from booming tourism, increase in employment, heavy infrastructure development, and consumer confidence (Grant, 2010). Likely Weaknesses of the Development Impact of the FIFA World Cup of 2014 in Brazil On the other hand, the development impacts of the FIFA World Cup of 2014 in Brazil is likely to draw weaknesses from the country’s legal matters, complex regulatory and the so-called outdated perceptions, which the country has on weaknesses and strengths (Alves, 2011). In this regards, the weaknesses are likely to result from the challenges, which the country face in areas such as poor infrastructure, widespread corruption, ineffective laws, inefficient governance, evidenced poverty and inequality among others (Alves, 2011). In fact, the challenges still interfere with the investors’ confidence making even skeptical to start businesses in this promising country. Legal Matters The excessive application of the legal formalities was another threat to development in Brazil. In essence, the country practiced strict and the latest environmental legislations, which threatened the operations of most companies (Hylton & Bramham, 2007). Notably, the tight laws, despite being useful In preserving the environment, was a likely weakness to the developmental impacts in the country, and this does not auger well with the winning bid to be the host of the FIFA World Cup of 2014. In South Africa, FIFA’s conduct received criticism for not adhering to the country’s legal systems. For example, they disobeyed air regulations, tolerated corruption, limiting the freedom of local traders, excessively gaining from booking accommodation in mass, and protecting wealthy officials and sponsors of the World Cup (Levermore, 2011c). With such practices, they exhibited weaknesses of the economic development of the country due to the negative legacy that they left (Cornelissen, 2011). Complex Regulations In this regard, the complexity in labor and tax regulations in the country posts a great challenge ton the investors, who are scared with the social charges, which the government has imposed on sales, payroll and income, and other taxes the government has imposed (Alves, 2011). Multiple taxes, which the government might impose unexpectedly, could be risky as they increase the contingency liability and block the acquisition of potential stock and asset (Alves, 2011). In addition, it is difficult to transfer prices in Brazil and the registration rules for foreign capital is very complex and demanding, thus worrying potential investors (Alves, 2011). Notably, such complex regulations could threaten the countries development, even after hosting the FIFA World Cup sporting events of 2014. In South Africa, the rules were flowed as the FIFI officials exhibited biasness on they treated the various teams. Some were not treated as expected, raising concern and discontent among the players, officials and the fans. Poor Infrastructure In the past, Brazil had poor road networks, which could not support economic development. After realizing that this could pose weaknesses and hindrance to economic development ahead of the FIFA World Cup of 2014, the government has started aggressive plans, intended to improve the entire infrastructure, with special emphasis to roads, communication and administration (EurActiv, 2010). The country also intends to develop the road networks to offer efficient transport during the world cup sporting events (Maennig & du Plessis, 2009). However, with properly developed roads, it would leave a legacy after the events since the road will play an important role in facilitating economic development through improved and efficient accessibility. The need to improve the roads and the entire infrastructure, lead to the implementation of structural reforms, with an aim facilitating access to the sporting grounds, industries, schools, hospitals, and market for the products (Coalter, 2008). This would eliminate the weakness that the poor road networks would cause the intended economic development. The South Africa FIFA World Cup of 2010 seemed to have offered a ten year’s solution to infrastructure development, which were carried out before the events started (Levermore, 2011c). Levermore, however observed that the right economic gains, which the host country are proud of are mostly overstated: a situation he attributed to political propaganda of the elites (Levermore, 2011c). Notably, the high speed connection that joined Johannesburg Airport to Stadia and Sandston was believed to have long-term benefit to the country, therefore serving as a legacy of the sporting event (Deloitte, 2010). Widespread Corruption On corruption, Alves noted that it might be difficult for the Brazilian to comply with anti-bribery and corruption laws (Alves, 2011). In addition, most of their accounting transactions might be undisclosed due to poor financial information history of the country (Alves, 2011). If such unethical practices are not eradicated, chances of business survival could be limited even when the country host the FIFA World Cup of 2014, thereby weakening the development impacts of the sporting events (Crane & Matten, 2010). Under this case, South African event was characterized by alterations of development expenditure, increased taxation and created excessive burden to the limited finances of the country (Levermore, 2011c). Therefore, these negative attributes do not lead to development, but a rise in the living cost, impoverishment and widespread inequality. Ineffective Laws Brazil’s economy has been characterized by inefficient and non-flexible corporate laws, which should be enacted to enable the country, reap from the intended FIFA World Cup of 2014 sporting events (Alves, 2011). Furthermore, other legislations on securities market needs amendment to comply with the modern and international market to steer economic development before, and after the sporting events. Another example is the tax law that does not allow consolidated group relief and returns (Alves, 2011): this is inflexible and insensitive to the interests of groups, therefore, should be amended ahead of the FIFA World Cup of 2014. However, the South African situation was characterized with increased taxation to provide revenue for hosting the events. Inefficient Governance The significant bureaucratic system practiced in some industries and businesses could lead to nepotism in the country (Alves, 2011). In business, nepotism is very dangerous to development because, it ignores the person’s knowledge in employment. Usually, it leads to the recruitment of unskilled workforce, who cannot perform the tasks as expected. Consequently, the products would be sub-standards and might not attract potential buyers. Even with the huge crowd expected to attend the FIFA World Cup of 2014, sporting events in Brazil, sub-standard goods would not attract buyers. Despite being categorized as a low-income country, the success in hosting the 2010 World Cup in South Africa disapproved the belief of the government’s inefficiency, because the inefficient governance might not result to meaningful development in the country. Poverty and Inequality Notably, Brazil’s economic weaknesses lead to low supply of skilled labor, a situation that is responsible for social inequality and poverty among the population (Alves, 2011). In addition, poverty and social inequality reduce the purchasing power of the people, leading low sales return from the industries and businesses. As a result, most businesses might not survive after the World Cup sporting events has ended. In South Africa, the government believes that it is necessary for the country to end social inequality and poverty, in the country through providing equal and affordable access to education, employment opportunities and promote sporting activities (South African Government, 2010). This would guarantee the country of skilled laborers and a population with high purchasing power, making the available industries to benefit from the country’s population especially after World Cup. Precisely, this would be a sure way of sustaining the industries and creating meaningful development for the country (Burnett, 2009). Conclusion In summary, it is important to note that the economic and political maturity enabled Brazil to offer the most suitable ground for hosting international sporting events. In comparison, it became apparent that the South Africa FIFA World Cup of 2010 and the FIFA World Cup of 2014 in Brazil had, and would have various developmental impacts respectively, on issues such as: Legacy after the event, clearing the people around stadiums areas, elimination of corruption and increased corporate social responsibility in the countries. As explained earlier, the country’s fiscal discipline, political stability, firm macroeconomic indicators, adequate international reserve, currency stability, and the extensive international consumer oriented market are likely to account for the strength of the developmental impact of the sporting events. 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