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Is it appropriate for a city or a region to establish a mega-event? What are the benefits and disadvantages for the host?

During the past twenty years Sport has experienced a considerable development, both at the level of the number of practitioners, as financial masses involved. Becoming a social and economic phenomenon major. It has turned into an industry important involving many public and private actors. Actually, the major sporting events highly publicized, such as the Olympic Games, world cups, offer exceptional showcase Organizer cities. Eighteen of the greatest sports appointment show impact on host countries, affect both urban, economic, environmental, that tourism.

As it claimed Gouguet and Nys (1993):

"A time where economic competition is more intense, cities and regions are a dual purpose: to be known internationally and display an image of dynamism and efficiency to support the

tourist population flows and the entry of investors."

It is also important to note that, the mega sports vents exert different types of positive and negative effects on an economic plan that non-economic. The reasons to host a mega-event as the Olympic Games appear to often elusive to economists. The net economic benefits are rarely positive; the quantifiable benefits are difficult to measure. Yet, countries compete fiercely to host these events.

Mega event and tourism

Must be distinguished events to local character of the large-scale sports events. “How are mega-events separate from other events?” A mega-event can be viewed in two main respects: first, with regard to its internal characteristics that is, primarily its duration and its scale, and second, in respect of its external characteristics, which mainly take account of its media and tourism attractiveness, and its impact on the host city. Only the latter are likely to exert a significant impact on the economic activity of a city or region. As could be expected, these are the Games Olympic of summer and the World Cup of football in attracting visitors.These sport events are implemented, to increase tourism demand in organizing region.According to the definition of Kurscheidt and Rahmann (1998) a mega-event is:

"A sporting event of international scope that can be organized in the same way anywhere in the world, according to the same rules, regardless of the economic or cultural, political context in which it occurs. (Olympic Games summer and Winter Paralympic Games, the

World Cup of football, rugby, cricket, Golf).”

Indeed, such gatherings directly benefit construction, distribution, tourism in General and in particular, hospitality as well as other traditional sectors such as employment.

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They create opportunities for development in computing and telecommunications, protection of the environment, the industry of sport, as well as in other emerging sectors, without neglecting economic development.

The actual event only lasts only a few weeks, certainly, but the preparations begin up to a decade in advance and may require considerable investment spending; and some are doing well, while others do not achieve the expected results. The main advantage that a host country withdraws from the World Cup is the increase in tourism during the three years preceding the competition. Thus, these countries tourism has increased an average:

Year FIFA Three years before Two years before One year before during

Increase in % 4% 6% 11% 13%

In general the number of international visitors, in the host cities, increases by an average of approximately 25% in the second year following the games. In addition, the Olympic Games are an important engine of growth. They are evidence of the ability of the city to host major events of international class. A study published recently by two American economists shows that major competitions of this size, result in a significant increase in trade for the host country, likely because these events give the signal that the host country is now a rising power.

The ideal course is to have a sporting event in high social profitability with high economic benefits. However some events have a strong economic impact but low social utility. This may meet with sports events with strong negative externalities, be they social (hooliganism, terrorism) or environmental (infringements of the environmental pollution). There again, a serious evaluation of these externalities is required.Actually, these events are different types of effects on the economy of the host regions. It should be distinguished if the benefits and costs that they generate are actual or pecuniary, if they occur in the short or long term, if they are tangible or intangible, and if they have a private or external.

Real and monetary effects:The Organization of a sports event generates costs and actual or pecuniary profit. The

first, influence on the well-being of the community. Thus the Organization of a mega-vent allows better known a region and result, an influx of tourists, the region has a real advantage. Hand part, the cost of construction of sports infrastructure and management is a real cost related to the conduct of a demonstration.

The benefits and monetary costs do not affect the well-being of the community: they had a re-distributive impact. The Organization of a major sporting event involves many cost construction or renovation of the existing equipment. But this provides extra work to the Organizer region. To meet the increased demand, they must hire additional staff.

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The salary of the employees in the construction sector will therefore tend to increase. This is a gain for the latter but, for the community as a whole; it is not a real benefit. Indeed, these wage growth will be offset by a relative decrease in the pay of workers in other sectors.

Short-term and long-term macroeconomic effects:

In this crisis period, which lasts for 5 years now, some skeptics this is developed before the arguments to justify committed investment on major sporting events. In strict economic terms, it may indeed seem naive to defend the construction of new stadiums or grandiose ceremonies funding. These events are indeed very expensive: when London won to host the games in 2012, the British have earned the right to spend 5.5 billion pounds, a sum already multiplied by three at the time it is. But these costs are not offset by income earned during the event, and if the economy is temporarily spurred, may wonder about the real utility of less publicized equipment or new stages. The opening ceremonies of the Beijing Games in 2008 would have cost them only at least $100 million, a considerable amount when we know that 100 million live on less than 1 dollar a day. It is true that, short-term benefits are essentially spending of visitors and organizers during the planning and organization of the event. These expenses are a net injection in the local economy, stimulating the production or promoting job creation. However, these effects are temporary: there is generally the level of economic activity its initial shortly after the conduct of the event. But, they can have lasting effects leading to a permanent increase in the level of economic activity of the city or the host region. This phenomenon may result, for example, improvement of the knowledge of the region with the extensive media coverage that comes with the large-scale sports events. This will foster the growth of the tourism sector of the Organizer region (Appendix 1). The construction and improvement of general infrastructure - roads, telecommunications... - accompanying the Organization of major events also have an impact long term on the local economy, with better accessibility and the reduction of the cost of communications.

The most advantageous for the nucleolus Organizer regions is to implement strategies to maximize the benefits of long term. This is characterized by the phenomenon of inflation (real-estate speculation). A paper published with Mark Spiegel, considers the economic impact of mega-events, by observing their impact on international trade. However, the use of different models shows that the home of a mega-event has a positive impact on the exports of the host country. This effect is statistically robust, permanent, and especially it is high - with a 30% gain for the country which hosted the Olympic Games. The home of such an event seems almost always associated with a commercial opening, and the borders of the host country (Appendix 2).

Also impact leads to reconsider the costs associated with the home of a mega-event. Indeed, there are many negative effects that appear to long term. Number of subjects have been and are still widely discussed in the media about these mega-vents. As aspects of the human rights, the environment, to the degradation of the infrastructure, this cannot be maintained due to lack of means.

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The degradation of the natural landscape and natural heritage are intangible values. The environmental damage nevertheless correspond to a real cost that it integrate in the decision to organize a sporting event. It is felt by unsightly infrastructure building and the destruction of natural resources such as water. A large amount of additional water is necessary for the preparation of the games and for the duration of the competition, which requires countries, like China or the South Africa, to drain some provinces already suffering severely from drought. The Beijing authorities said they had managed to stop the rain in limited areas by launching chemicals into the clouds. The air quality is also affected at these events. The construction of additional sites did not improve the situation, the building creating of many greenhouse gas emissions and resulting operating at full power electric surroundings. The reality is that many excesses appear at these events: deportation of the poor to maintain a good image. Similarly, the strict rules of FIFA are the cause of damage to local businesses. South African companies that had hoped to take advantage of the windfall were crowded out (Appendix 3).

However the host cities can expect conscientious decision-making, long-term, public policies. Consider the example of China: Creation of a green belt in Beijing, adoption of cleaner fuels, development of wind energy, and improvement of public transport… The Olympic Committee seeks by all means to reduce the environmental impact. It is said that the OJ 2012 will be particularly ecological. The idea is that this green space and this protected natural area of sustainably transform this part of London (Appendix 4).

But the disadvantaged population remains always seriously affecting these prejudices. But the disadvantaged population remains always seriously affecting these prejudices. Notably in the host country that are developing (China or South Africa).

Tangible and intangible effects:

The intangible benefits are made including the pleasure experienced by the audience, the sense of pride felt by the inhabitants of the city or organizer region or improving the image of the region. For the region hosts, issues related to this event is not just athletes, or even economic. They are also political and social. Take the example of the Qatar which for some years to obtained the Organization of numerous mega-vents such as: FICSA to 2022, World Handball for 2015, the world of Athletics of 2017, the football in 2011 Asia Cup and the Asian Games in 2007. The Qatari candidature for FIFA was not a country but a region, the Middle East, and of a civilization, the Arab Muslim world.

Policy issues: this event is likely to strengthen both the solidarity between the countries of the region and the quality of the dialogue among civilizations. In addition, give the feeling to the young Arabs that they are not made in the bans of the nations is of critical importance.

The issue is also social: the dynamics of opening of Arab societies, initiated a few years, will be reinforced. The Qatari was bearer of universal messages: for the Qatar, organize the World Cup is a highly symbolic act in a certain vision of the world, more United and solidarity. (Appendix 5).

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External effects:

Costs that do not result in the payment of monetary compensation are external costs. Thus, costs related to the Organization of a sports event are imposed on the population as a noise, "too full", or congestion. These costs include harm to the influx of the lap times. Indeed, we note recent year, an effect of eviction of tourists and local for major sports events. Thus, the Athens OJ (2004), if being held at the height of the summer season, tourism decreased by 32%. As of the 2006 football World Cup, had no impact on the tourism visitation in Germany. Benefits are related to the improvement of the General infrastructure. In Montreal, the 1976 Olympic Games made known Montreal as a destination of interest in the West. They have also left their architectural and tourist traces. Today, the Olympic Stadium is considered one of the main tourist attractions of the city. The sport is still the honor. On the velodrome, it was transformed to receive the Biodôme, a stunning reconstruction of the most beautiful ecosystems of the Americas. Apartments were built in the former Olympic village. In contrast, if these infrastructures are not maintained this will cause an extreme Visual therefore cost.

We have examined the mega sporting events and their forms of impact on the host city and country. Due to the increasing size, the staging of mega-event currently involves considerable investment in both sporting facilities, and supporting infrastructure and services, transportation and telecommunications. Various interests are involved ranging from the commercial, with their concern to maximize profit, to the governmental, with their concern for political, social and economic benefits. Specifically for the host cities, the benefits to be derived from staging the mega-events can be enormous and various. Drawing examples from recent mega-events, the discussion on impacts has highlighted positive as well as negative ones. In effect, economic benefits are the prime motive for all the interests involved in the hosting of the mega sport events, be it the local Government, which seeks urban development of the region through infrastructure made for the staging of the event, or the corporation that becomes a sponsor of the event to attract publicity. While bidders battle for the kudos of winning the hosting of a mega-event, the desired economic, fiscal, social, cultural and political outcomes are expected to justify their actions. Despite this many problems and damage arise from these events. A problem which has developed more and more over 15 years and that of terrorism. Effects of such a mass of population concentration increases these risks. This is why the cost for the security of the civilian and one cost is more heavy.

Despite the setbacks in these events, the population remains faithful to the appointment and infatuation is not near falling.

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Appendix 1:

“In June 2009, in a small village of Finland, I found myself in the company of a colleague in the single bar where it was used to eat. Seeing a small television, I watched organized in South Africa Confederations Cup and I am excited to me on the face of an advertising spot on Rustenburg (northwest province) [one of the 10 cities that are home to the world], animals of its natural park, Sun City and its inhabitants of all colors. Having regard to the astonishment of the bartender, we explained him that we were in South Africa. He then told us that there was strictly aware nothing in football, but that this country had a great place, and that he would visit. The other guys in the bar approached and began to chat with us. They wanted all learn more about our continent, Africa. In a few moments, their prejudices were gone. There, in an isolated village of the Arctic Circle, the South Africa was only one point dark at the end of a dark continent south. This is that I understood that we had already won the World Cup, before even the first time.”

* Professor of Economics at the University of Stellenbosch

Appendix 2:

In July 2001, Beijing was given the Organization of the twenty-ninth Olympiad. Just two months later, China concluded negotiations with the WTO, formalizing its commitment to liberalize its trade successfully. And is not an isolated case. Rome has been awarded the games in 1960 in 1955, the year that the Italy began the steps leading to the convertibility of its currency, has joined the United Nations, and especially began negotiations which would lead two years later to the Treaty of Rome creating the EEC. The games in Tokyo (1964) coincided with the arrival of the Japan to the IMF and the OECD. Barcelona has been awarded the games in 1992 in 1986, a year after the Spain joined the EEC. The decision to assign to the Korea games of 1988 has coincided with the liberalization policy of the country. The correlation is also the only Olympic Games - the football World Cup was held in the Mexico in 1986, year that marked the beginning of the commercial opening and entry into the GATT.

Appendix 3:

Energy Central was built specially for the complex sports of Stratford and produces 20 to 30% of all of the necessary energy from bio fuels. Sustainable materials have been preferred for the construction of buildings and rain waters are collected and reused. The proximity of the river made possible the operation of this area to make habitat for species such as kingfishers or otters, and more than 2000 trees were planted to allow the creation of a green space that will endure after the end of the OJ.

Appendix 4:

For example, viewers were forced to use the Budweiser in stages and were therefore deprived of South African beers such as Castle, Black Label or Windhoek. The general impression of South Africans is that they have so far nothing removed from this partnership with FIFA.

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Appendix 5:

“This vision embodied by His Highness the Emir, declines in various areas: diplomacy first, very active peace, Sudan to the Lebanon and in Libya; culture and education then; the dialogue among civilizations, in particular between the East and West; the humanitarian commitment, also, the Qatar each year devoting 0.7% of its gross income to help developing countries.The 2022 world offers the opportunity to Qatar to strengthen its policy of openness, dialogue and tolerance. It is also, for the Middle East, an additional chance for peace and stability. It is these values and these hopes that the Qatar will organize in 2022 World Cup.”

*Mohamed Jaham Al Kuwari, Ambassador of the Qatar in France

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References:

Affaire stratégique. 2011. Le Qatar Hyper-puissance du sport [online]. [Accessed on 30 October 2011]. Available from: http://pascalbonifaceaffairesstrategiques.blogs.nouvelobs.com/archive/2011/01/29/le-qatar-hyper-puissance-du-sport.html

LeMonde.fr . 2010. Qatar et la FIFA [online]. [Accessed on 5 November 2011]. Available from: http://www.lemonde.fr/idees/article/2010/12/17/pourquoi-le-qatar-a-emporte-l-organisation-de-la-coupe-du-monde-2022_1455030_3232.html

Telos. 2009. JO [online]. [Accessed on 18 November 2011]. Available from: http://www.telos-eu.com/fr/article/jo_correlations_inattendues

M. Malfas (2005). Impacts of the Olympic Games as mega-events.

Time COLES and C. Michael HALL (2011). International business and tourism.

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