Economic Insights from the Qatar World Cup
Economic Insights from the Qatar World Cup
The 2022 FIFA World Cup in Qatar was a significant economic catalyst. Over $200 billion was invested in infrastructure, boosting transportation, real estate, and tourism. The event drew millions of visitors from around the world. This experience offers valuable lessons in economic development and strategic planning for future global events.
Context
After a competitive bidding process, Qatar was awarded the hosting rights for the World Cup in 2010. The selection was historic, making Qatar the first Middle Eastern country to host the tournament. Qatar's bid emphasized a vision of bridging cultures and showcasing the region's passion for football. This turned into the grandest World Cup in history (Chart 1).
Key Highlights
Qatar’s tournament involved several features:
Infrastructure investment
Economic diversification
Foreign investment
Tourism boost
Infrastructure Investment
Qatar spent $6.5 billion to construct seven of the most advanced stadiums, which set new standards in design and technology. For example, they involved solar-powered cooling systems and innovative ventilation, which mitigated Qatar's extreme heat conditions, ensuring comfort for players and spectators.
Beyond their function during the tournament, these stadiums represent significant economic assets for Qatar. They can be utilized for future sporting events and community activities, thereby stimulating tourism and hospitality.
Chart 1 | Qatar World Cup Investment
Qatar has also built hotels, public transportation, railways, and entertainment facilities. One notable project is the 38 km² Lusail City, which was built from scratch at an estimated cost of $45 billion and features retail spaces, golf courses, cultural centers, and light rail, among more.
Economic Diversification
Qatar aims to increase its non-hydrocarbon growth rate to 4% by 2030, as its economy currently relies on natural resources as a significant source of income. The World Cup helped alleviate this, with hydrocarbons as a percentage of GDP falling from 45.1% in the first 9 months of 2022 to 40.1% in the same period in 2023. This decrease is in part due to the expansion of sectors like tourism, construction, and services.
Foreign Investment
Leading up to the World Cup, Qatar has seen some of the highest growth in foreign investment globally. The country moved from 79th place in 2019 for greenfield foreign investment projects to 34th in 2022. For context, greenfield refers to a foreign company establishing a subsidiary overseas from the ground up, as opposed to purchasing or renting existing facilities. The nation attracted almost $30 billion in foreign investment and created around 14,000 jobs in 2022 as a result.
Tourism Boost
International arrivals to Qatar in 2023 reached a five-year high with over 4 million visitors, compared to 2.5 million in 2022 (Chart 2). This almost 60% increase indicates continuing momentum as Qatar’s World Cup facilities are put to good use. Spending by tourists and broadcasting revenue as a result of the event is estimated to be up to $4.1 billion. Specifically, estimates of the contribution made to the economy per individual ranged from $1,575 to $2,412. This includes various categories such as flights, accommodation, dining, and shopping.
Chart 2 | Qatar International Arrivals
Future Challenges
Looking ahead, Qatar faces challenges that it must address to continue its growth.
Continued Diversification
One of the challenges involves maintaining the momentum of economic diversification away from hydrocarbons, which was bolstered by the infrastructure investments and economic activities associated with hosting the event.
Without the stimulus provided by international events, Qatar must aim to broaden its economic base into sectors such as tourism, technology, and services. This requires continued investment in infrastructure and innovation to ensure sustained economic growth beyond the short-term impacts of the tournament.
Facility Utilization
Another critical challenge lies in the effective usage and maintenance of the infrastructure developed for the World Cup. Qatar invested heavily in stadiums, transportation networks, and urban developments to meet the demands of the global sporting event. Moving forward, ensuring these facilities are utilized efficiently as assets for the country's development is essential.
Future Opportunities
On the flip side, there are future opportunities that can sustain the country’s growth.
Soft Power
Hosting the World Cup expanded the country’s visibility on the world stage. The successful organization of the event showcased Qatar's ability to host large-scale international events and highlighted its commitment to cultural diversity, hospitality, and international cooperation. This increased its global standing, as Qatar continues to be a trusted mediator in conflicts and diplomatic struggles.
Tourism Growth
Qatar must capitalize on enhanced tourism infrastructure and global exposure to attract more visitors, promote cultural attractions, and continue growing its economy. By leveraging the legacy of the World Cup, it aims to establish itself as a premier tourist destination, attracting visitors and contributing to economic growth.
Lessons for 2026
Looking ahead to the 2026 FIFA World Cup hosts—United States, Canada, and Mexico—Qatar's experience offers valuable lessons. They should prioritize sustainable infrastructure, manage risks effectively, and plan for lasting economic and social legacies. Embracing these lessons will help maximize economic benefits, enhance community involvement, and leave a positive, long-term impact on their countries.
