Qatar’s World Cup Is A $300 Billion Splurge To Rebrand Its Global Reputation

(Bloomberg Businessweek) -- Qatar’s bid to host this year’s FIFA World Cup was controversial from the start. Beyond objections to the country’s history of human-rights abuses, there were also the searing temperatures and the sheer logistical challenges to consider: one outdated stadium, few hotels and zero experience with mass tourism..Nothing, it turns out, that immense sums of money couldn’t address. Twelve years after winning the rights to host the tournament and $300 billion later, the tiny gas-rich nation is ready to host the best players in men’s soccer and about a million of their biggest fans. There are seven new stadiums, 20,000 new hotel rooms, a new metro and more than 1,100 miles of new roads, the culmination of a decade of nonstop construction and investment..Qatar’s spending on sports isn’t confined to the World Cup. Since being awarded the event by FIFA, soccer’s international governing body, the country has been on a spree, buying a majority stake in Paris Saint-Germain—one of France’s top soccer clubs—and a 22% interest in Portuguese team SC Braga. It held a Formula One race in 2021, then secured a decade-long hosting contract that starts next year..The nation’s wealthiest neighbors have matched the spending on sports blow for blow. The region will host four F1 races in 2023, while Saudi Arabia and Abu Dhabi each own an English Premier League soccer team. There’s also LIV Golf, growing investments in e-sports and major boxing and mixed martial arts events. In October two teams from the National Basketball Association played a preseason game in the Middle East, a first for the US league..“The immense wealth of the Gulf states relative to their small populations gives them this large margin to invest in promoting their image,” says Dania Koleilat Khatib, a Dubai-based scholar with the Hoover Institution at Stanford University. “Sports are high-profile events that contribute to the prestige of the countries, plus they generate traffic.”.The gravitational pull of Gulf riches has triggered accusations of so-called sportswashing—the charge that these countries are trying to use good vibes from athletic events to improve their questionable global reputations. Saudi Arabia, the United Arab Emirates and Qatar are actively trying to extend their global brands beyond being known for fossil fuel production. Some argue that they’re trying to gloss over even less savory aspects, including repression of dissidents and entrenched discrimination against women and minorities..Hosting the World Cup “will serve to strengthen the image of Qatar,” says Giorgio Cafiero, chief executive officer of Washington-based risk consulting firm Gulf State Analytics. He says it will “help portray the country as being a very forward-thinking, progressive and outwardly oriented Gulf state that is committed to bringing different kinds of people together.”.The kind of place, in other words, where a business traveler could feel good about entertaining clients, a trade association could host a conference or a family could vacation for a few days—like Las Vegas, with less vice..The next decade is a pivotal one for countries that rely heavily on fossil fuel revenue. Many countries and companies have set 2030 as the year when they’ll begin to reduce their energy consumption, while many are increasingly looking to cleaner alternatives to slow climate change. Qatar itself has also sought to bill this year’s World Cup as carbon-neutral, though independent researchers have expressed skepticism about their calculations... But the fallout from the war has also highlighted the need for importers to buttress their energy security and reduce their reliance on fossil fuels. For producers, that means the race is on to secure their economic futures before demand dwindles..Case in point: Saudi Arabia, which didn’t issue tourist visas until 2019, now expects to spend $1 trillion to bring in visitors. As part of its scheme to build Neom—a high-tech city in the desert—the country is planning to create an artificial ski resort and in October was picked to host the 2029 Asian Winter Games. The multisport event can be seen as a proving ground for places that want to host bigger gatherings including the Olympic Games while also showcasing the country to billions of potential tourists..Saudi Arabia’s smaller neighbors are also promoting themselves as destinations. By the end of this decade, the UAE wants tourism to contribute 15% of gross domestic product. Qatar is aiming for 6 million visitors a year, double the number from 2016. The countries can’t hit those kinds of numbers without changing the way moneyed tourists think of them..There’s also more to the makeover than economic growth. For Qatar, especially, global visibility has become a matter of survival. Just five years ago, an escalation of regional rivalry led Saudi Arabia, the UAE, Bahrain and Egypt to cut off diplomatic, trade and travel ties with the country. Some reports even warned of a possible Saudi invasion. It took US intervention, and the economic self-interest inspired by a pending flood of World Cup tourists to the region, to end the stalemate last year.. FIFA, the International Olympic Committee and other governing bodies have long argued that bringing sports to undemocratic countries does more good than harm. That’s questionable. On the same day that Qatar received the rights to this year’s competition, FIFA also awarded the 2018 tournament to Russia, which has since drifted even further into state repression and embarked on the invasion of Ukraine. The cynical take is that sports organizers don’t have much choice. Gulf countries are among a shrinking group of nations willing to pay top dollar to host marquee sporting events. In European and American cities, residents—aka voters—tend to see the Olympic Games as a waste of taxpayer money and have repeatedly rejected proposed bids..“Sports are certainly connected to politics, business and community,” Steve Koonin, CEO of the Atlanta Hawks NBA team, said in an interview when the team was in Abu Dhabi for a preseason game against the Milwaukee Bucks. “Coming to the UAE, we understand that not everything aligns with our values, yet we also understand that when you’re a guest in someone’s house you appreciate the differences. Then hopefully over time you can open eyes and unlock hearts to change things.”.Media reports have detailed cases of laborers in Qatar who worked on the stadiums and other infrastructure being subjected to inhumane treatment and unsafe conditions, while Amnesty International has accused the government of failing to properly investigate the deaths of many migrant workers. After years of scrutiny and questioning, the country made significant changes to its labor laws, though worker advocates would like to see more laws and better enforcement. Some players and fans have called for boycotts, but soccer authorities in participating countries ultimately rejected the idea. Amnesty and other groups said enforcement of Qatar’s labor reforms has fallen short, but they note the changes have been positive overall and haven’t encouraged fans or teams to stay away..The government has promised to welcome everyone, and Bloomberg News has reported that it may not clamp down on protests during the World Cup, including those advocating for LGBTQ rights. But there’s reason to doubt that all the reforms will persist. The 2008 Beijing Summer Olympics were also heralded as a testament to progress, liberalization and opening up. Yet 14 years and one Winter Games later, China is if anything under even tighter controls as President Xi Jinping embarks on a third term..Saudi Arabia, Greece and Egypt are bidding jointly to host the men’s soccer World Cup in 2030. It’s also clear that both Saudi Arabia and Qatar are interested in hosting the Olympics, offering another opportunity for charges of sportswashing—and opportunities for economic and social advancement..“The Gulf is looking increasingly likely for the Olympic Games,” says Simon Chadwick, a professor of sport and geopolitical economy at Skema Business School in Paris. “Women will have to show their legs and their arms, and they won’t cover their heads. That is a really interesting prospect.” —.More stories like this are available on bloomberg.com.©2022 Bloomberg L.P.

Qatar’s World Cup Is A $300 Billion Splurge To Rebrand Its Global Reputation

Middle Eastern countries are vying to host marquee events like Formula One races, which boost tourism and prestige.

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