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Saudi Arabia Chosen to Host 2034 FIFA World Cup

Saudi Arabia has officially been named the host of the 2034 World Cup, bringing the prestigious tournament back to the Gulf region for the second time in just ten years, a decision that has already sparked considerable controversy.

For Crown Prince Mohammed bin Salman (MBS), this could represent a significant triumph in his strategy to leverage sports as a means to attract tourists, enhance global influence, and reshape the country’s image.

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“This is monumental for MBS and the Saudi state. It is arguably the apex of their sports strategy to date,” noted Stanis Elsborg, director of Play the Game, a Denmark-based organization focused on ethical standards in sports. “However, for MBS, hosting a tournament is just part of a bigger picture.”

Saudi Arabia is currently eight years into a multi-trillion dollar initiative to reduce its economy’s dependence on oil revenue. This plan encompasses the development of numerous new industries, societal modernization, and opening the country up to tourists.

The kingdom has made substantial investments in sports to further these goals, both domestically and internationally, hoping that events like the World Cup will invigorate its youthful demographic.

Yet, the Saudi bid to host the 2034 World Cup has been fraught with controversy from the very beginning.

‘Darker side’

Advocacy organizations, including Amnesty International, have voiced concerns about the use of exploited labor, while several U.S. senators have called for the bid to be rejected due to Saudi Arabia’s grim human rights record.

U.S. intelligence agencies attribute the 2018 murder of Washington Post columnist Jamal Khashoggi to MBS, who had been a close ally turned critic within the royal court.

According to Elsborg, the kingdom aims for the World Cup to serve as a diversion from these troubling issues.

“Let’s not overlook the dark side: this isn’t purely about the love for the sport,” he asserted. “It’s about utilizing sports to divert attention from their deplorable human rights practices and to attain global legitimacy.”

The Saudi government did not respond to a request for comment.

‘Sportswashing’

Qatar, which hosted the first World Cup in the Middle East in 2022, faced similar allegations of engaging in sportswashing to distract from its human rights issues. Nonetheless, the event was regarded as a sporting success, enhancing the small nation’s reputation on a global scale.

Saudi Arabia is looking for even greater benefits.

MBS has fostered a relationship with FIFA President Gianni Infantino, who has long advocated for the nation as a potential World Cup host. Saudi Arabian oil giant Aramco has also emerged as a significant sponsor of FIFA events.

Ultimately, Saudi Arabia was the sole bidder for the 2034 World Cup after Australia withdrew, ensuring its selection was nearly guaranteed before FIFA’s final decision on Wednesday.

World Cup stadiums

The exact timing for the 2034 World Cup is yet to be finalized, according to Saudi Arabia’s sports minister. Matches are slated to take place in 15 different stadiums across five Saudi cities, including Riyadh and Jeddah, with eleven of those being completely new constructions.

The construction and spending needs associated with this could heighten pressure on an economy that is already grappling with years of budget deficits, partially due to ongoing investments.

Saudi Arabia anticipates a fiscal deficit of approximately 2.8% of GDP this year, and for every year until 2027.

The kingdom has not provided guidance on when it expects to return to surplus and has indicated that running deficits is a necessary trade-off for investing in growth outside the oil sector.

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“A planned deficit of 2% to 3% in a stable region is beneficial for investing in key economic sectors,” stated Faisal Al-Ibrahim, the minister of economy and planning last month.

The kingdom has increasingly turned to sovereign debt issuance to cover the shortfall and intends to keep borrowing in 2025. According to Moody’s, this heightened activity may elevate Saudi Arabia’s debt-to-GDP ratio to 35% by 2030, still significantly lower than many other countries.

“They possess ample capacity to fund it,” commented Justin Alexander, director of Khalij Economics and an analyst for GlobalSource Partners. “While they might occasionally need to borrow more or restrict spending in other sectors to sustain this, it is undoubtedly a priority.”

Construction concerns

World Cup-related construction will contribute to the $1.3 trillion in real estate and infrastructure projects that have been announced across the nation since 2016.

Simultaneously, Saudi Arabia will be preparing for two major sports championships within the next five years and the World Expo in 2030.

Migrant workers, who are the backbone of Saudi Arabia’s construction boom, are already subjected to widespread labor abuses, leading Human Rights Watch to claim it is “almost certain” that the 2034 event will be marred by rights violations.

The rush to construct sufficient new stadiums in Qatar prior to the 2022 event resulted in safety shortcuts and the deaths of hundreds of migrant workers, as reported by media outlets and asserted by government officials. Many of these concerns that haunted the selection of the small but gas-rich nation will likely resurface for Saudi Arabia.

The Qatar World Cup drew criticism from some club owners who claimed that the switch to winter competitions disrupted domestic leagues. The host country’s stance on homosexuality was also scrutinized, with human rights and LGBT activists stating that the World Cup might not be inclusive for all sports fans. Additionally, alcohol consumption was prohibited in stadiums.

Trophy moment

The tournament’s climax featured Argentina’s victory over France in a penalty shootout, a match deemed by analysts to be one of the greatest World Cup finals in history, solidifying Lionel Messi’s legacy as the top clutch player of his generation.

The image of Messi triumphantly holding the Jules Rimet trophy, draped in a traditional black Arab bisht cloak bestowed by Qatar’s ruler Sheikh Tamim bin Hamad Al Thani moments earlier, went viral, enhancing the nation’s image and soft power.

Following the World Cup, Qatar’s tourism numbers surged by 58% year on year in 2023 and are projected to hit a record in 2024.

Prince Mohammed of Saudi Arabia may be envisioning a similar outcome.

The kingdom aims to welcome 150 million tourists annually by 2030, with 70 million arriving from abroad. The government has stated its intention to invest nearly $1 trillion in the tourism sector over the next decade to enhance its status as one of the world’s most visited destinations.

“Winning this bid is a strong message: Saudi Arabia is not only prepared to take its place on the global stage but is also committed to transforming the region’s tourism narrative,” stated Anita Mendiratta, special advisor to the UN Tourism secretary-general.

Hosting the World Cup could potentially draw millions of new visitors and generate fresh revenue streams, supporting the broader diversification objectives of the country.

© 2024 Bloomberg L.P.

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