Nevertheless, a successful 2010 FIFA World Cup should give the ailing economy a vital shot in the arm, according to Dr Iraj Abedian, an economist and CEO of Pan-African Investment and Research Services.
“Against the backdrop of all challenges facing the country, it is now a certainty that the 2010 World Cup will occasion South Africa an opportunity to showcase the socio-economic infrastructure,” Dr Abedian told delegates late last week at the Annual Conference in Johannesburg.
“The potential, positive multiplier effects of a successful World Cup, is considerable for the economy in the short to medium term.”
He cited continued rand volatility affecting exports, the return of macroeconomic policy uncertainty, increasing electricity and water tariffs leading to higher inflation, prospects of rising taxes, and rising demand for social delivery in the face of government's limited delivery capacity, among others, as domestic uncertainties to face the country in 2010.
Manana Moroka, former CEO of Proudly South African (PSA), was not a speaker at the conference but she is known to be confident that the 2010 FIFA World Cup will bring enormous business opportunities for SA companies, building their competitiveness and economic sustainability by focusing on quality and the values that support good business practice.
She has been quoted as saying: “The World Cup offers an additional incentive to rekindle a sense of national pride, patriotism, greater social cohesion and support of our home-grown products and services.”
PSA has about 1200 active members and 7300 registered products.
It is believed that the world's biggest soccer show, to kick off on 11 June next year, is set to create about 150 000 jobs, contribute R21 billion to the country's GDP (Gross Domestic Product) and generate R7.2 billion in government taxes.
Furthermore, tourism officials estimate that at least 500 000 visitors will come to SA, spending about R10 billion during the long-month soccer feast.
The government is said to have invested some R80 billion to repair existing or build new infrastructure, which include airports, roads, ICT, health facilities and stadiums.
However, as it is the case in many African countries, where economic growth and accumulation of wealth have failed to uplift destitute communities, some fear the 2010 FIFA World Cup will only benefit a ‘few chosen' - aggravating an already glaring social inequality.
Dr Abedian said: “Historic disparities, compounded by the adverse effects of the prevailing economic downturn, are likely to exacerbate disparities of income and wealth in the country.
“Growing socio-political impatience with the pace of poverty alleviation will help focus attention on the root causes of the income disparities in the country.”
SA has recently overtaken Brazil as the world's most unequal society.
A recent survey published by the South African Institute for Race Relations reports that the average capita income in SA in 2008 was R32 559.
The survey showed that whites continue to live a ‘better life' - scoring the highest per capita income (R135 707), while Indians came second (R56 173), and coloureds third with R27 569, and blacks had the lowest income (R19 496).
The Annual Conference, which drew 10 eminent speakers, was hosted at the Wanderers Club by Future Publishing, in association with e.tv.
For more information go to www.futurepublishing.co.za.
