【Economic Watch】After the "most expensive" World Cup, how can Qatar "return its capital"?

Source: Global Times

The Qatar World Cup is coming to an end, and outside the arena, the attention of the outside world will also turn to the development of Qatar's economy after the game. In addition to the exciting events, the Qatar World Cup continues to attract attention than the "most expensive" World Cup in history so far, costing more than $220 billion. Some analysts said that Qatar's huge investment this time is far from just improving its own status and influence politically, but also economically, wanting to make the World Cup a "new engine" for economic growth. After this World Cup, can Qatar's huge investment "pay back"? Which sectors of Qatar's economy are likely to see explosive growth after the game? Will Chinese companies have the opportunity to participate in the economic construction after the World Cup in Qatar? The Global Times reporter investigated this.

Where stadiums will go?

On December 18, the Qatar 2022 World Cup final will be held at the Lusail Stadium. Known as the "Golden Bowl", the stadium was built by China Railway Construction International Group Co., Ltd. (CRCC). How is the Lucel Stadium used after the World Cup? Li Bai, chief engineer of the Chinese side of the Lusail Stadium, told the Global Times reporter on the 15th that the Qatari side originally planned to transform the Lusail Stadium into a school, hospital or shopping mall after the end of the game, and the high-rise can also be transformed into apartments. Now, Qatar will also host the 2030 Asian Games, and the Lusail Stadium may be transformed into a comprehensive venue, adding a runway, etc., to continue to serve the 2030 Asian Games.

According to the US "Forbes" website, the total cost of the eight new and renovated stadiums in Qatar is about 6.5 billion to 10 billion US dollars, and after the event, part of the stadium's facilities will be demolished and donated to other countries, and the rest will be reused as schools, shops, cafes, sports venues, health clinics, etc.

According to Saudi Arabia's Economic News, Qatar spent more than $220 billion to host the World Cup, which is 1.28 times Qatar's GDP in 2021, 20 times Qatar's military expenditure in 2021, and 5 times the total cost of the previous seven World Cups. However, of the $220 billion in astronomical spending, only $10 billion was spent on new stadiums, and the remaining $210 billion was spent on infrastructure such as roads, bridges, airports and communications services. The analysis said that these are long-term investments, which are far more beneficial than harmful to the country.

Fatma Al Nuaimi, spokesperson for the Qatar World Cup Organizing Committee's Delivery and Legacy Supreme Committee and executive director of the Market Communications Department, said in a September media interview that the more than $200 billion linked to the World Cup is actually part of Qatar's ambitious strategy of national development and modernization. Fatma said the big infrastructure projects used by teams and fans around the world, such as new roads, subways, airports, hotels and other tourist facilities, were planned even before Qatar won the right to host the World Cup. "Our new infrastructure and services will provide an outstanding experience for teams and fans, and leave a legacy for Qatar after the 2022 match."

Liu Zhongmin, a professor at the Middle East Institute of Shanghai Overseas Chinese University, told the Global Times that the impact of the World Cup on Qatar is manifested in two aspects: improving hard power and building soft power. "The World Cup has played an important role in promoting the transformation and upgrading of Qatar's infrastructure construction, especially the improvement of the transportation network. In terms of soft power, the hosting of the World Cup has demonstrated Qatar's national strength to the world in an all-round way. Qatar, in particular, said it would donate some of its detachable stadiums to the African region after the game, a move that not only recycles existing venues, but also further establishes a good national image. ”

Tourism & Real Estate

Nasser Carter, an official at the Supreme Commission for Delivery and Legacy of the World Cup in Qatar, said the 2022 World Cup in Qatar is expected to attract about 1.2 million fans from all over the world, bringing $17 billion to the country's economy. According to Simbaris, an economics professor at Smith College in the United States, during the World Cup, Qatar is expected to receive 1.3 million tourists, and if each tourist spends an average of $300 a day in Doha for four days, Qatar's direct income will reach $1.6 billion.

Although $1.6 billion is only a fraction of the investment, Qatar aims to use the World Cup as a springboard to showcase its results and attract foreign tourists significantly. Sakar, head of financial services at Qatar's National Bank, said Qatar hopes to use the World Cup to stimulate tourism, with the number of foreign tourists visiting each year growing from 2.1 million in 2019 to 6 million in 2030.

According to Qatar's "Peninsula Network" reported on the 14th, after the World Cup, Qatar's real estate industry will usher in tremendous growth. As the Gulf countries remain one of the safest places in the world to invest in, expatriates, residents and tourists, among others, are bullish on the country's real estate sector investment in the long term. Major cities in Qatar, including Lussell, have built some special infrastructure to attract more investors to invest in Qatari condominium projects.

Wu Ruoshan, president of the New Era Cultural Tourism Research Institute and special researcher of the Tourism Research Center of the Chinese Academy of Social Sciences, told the Global Times that the hosting of the World Cup has three benefits for Qatar's tourism development: first, Qatar's image as an international tourism destination has been further established and improved; Second, the infrastructure of the tourism industry has been upgraded and improved on a large scale, especially the diversified accommodation formats have been vigorously developed; Third, it has driven the development of tourism-related peripheral industries and greatly increased jobs.

Wu Ruoshan told reporters that Qatar has rich natural and cultural landscapes, and its unique geographical location determines its status as an important transportation hub in the Middle East, coupled with Qatar's visa-free entry policy for 80 countries and regions around the world, Qatar has a unique advantage in developing tourism. "In the future, tourism may become one of the lasting drivers of Qatar's economic development. With the dividends of the World Cup, Qatar can actively develop themed tourism products and tourism programs such as air charter tours, customized luxury tours, and parent-child, adventure and entertainment to attract global tourists."

Opportunities for Chinese companies

According to Global Data, a London-based data analytics and consulting firm, Chinese companies sponsored US$1.4 billion in the World Cup in Qatar. It can be said that the Qatar World Cup is the World Cup with the highest participation of Chinese enterprises, which also lays a solid foundation for Chinese enterprises to better integrate into the market of Qatar and even neighboring countries in the future.

Liu Zhongmin believes that during the preparations for the Qatar World Cup, Chinese enterprises cooperated with the local government in infrastructure construction, and in the future, the cooperation between the two sides may focus on the high-tech field. "When the infrastructure construction is relatively complete, Chinese enterprises will have greater development opportunities in new technologies such as new energy, communication technology, and aerospace."

"We will continue to follow the subsequent operation of Lucerle Stadium, and we will definitely participate in the owner's bidding," Li Bai told the Global Times.

The Times of India said economists have two views on whether Qatar will benefit from hosting the World Cup. Critics believe that this event will have a negative impact on the country in the economic and social spheres. There are fears that economic benefits may be lower than expected and that Doha may end up paying more than it receives. However, there are also analysts who say that the cost-benefit analysis of the Qatar World Cup should not be carried out only from a monetary perspective. The social, cultural and perceived value of this event far outweighs the direct monetary investment.

An article on the website of Nottingham Trent University in the United Kingdom said that given the huge wealth of the Gulf countries, Qatar does not need and will not care about the return on more than $220 billion in investment. Being commissioned to host a major sporting event can bring huge intangible benefits to a country. Qatar has hosted the 2019 World Athletics Championships and signed a 10-year contract with the F1 Grand Prix. Qatar seems to be more inclined to host major sporting events, it just hosted a very expensive World Cup party, and it is unlikely to be the last.