ALEXIS CRUZ WRITES – Qatar’s proposal to host the 2022 FIFA World Cup was overly ambitious from the outset. They needed massive funds to build new cities just to house new stadiums. In the beginning, Qatar appeared to have money to burn due to a lucrative oil market. Nevertheless, the country has recently undergone financial issues, with oil prices falling below sixty dollars a barrel, thus putting many of these development projects at risk.
Yet, Qatar remains adamant that they will be able to hold a successful World Cup in 2022. The International Monetary Fund (IMF) has reported that Qatar needs to diversify their economy, since more than 90% of the country’s budget revenue comes from the hydrocarbon sector. The Gulf Times reported on this with the title “Qatar Budget on Sustainable Path, Says IMF,” noting that the country has enough financial buffers and surplus to offset several effects of falling oil prices.
The Gulf Times also reported that Qatar needed to restructure its economy and build up its banking sector, but highlighted that GDP growth would remain strong. As construction for the World Cup intensifies, the projects draw a larger share of the Qatari budget. The Qatari newspaper The Peninsula reported on the budget and emphasized the infrastructure and building projects for the international tournament. Similar to the Gulf Times, The Peninsula stated that despite the falling oil prices, the country has enough funds for their projects, this time quoting the Ministry of Finance, stating that the economy would continue to perform strongly.
Media sources outside Qatar have a more negative take. The Wall Street Journal stated that Qatar risks budget deficits as it pours billions of dollars into hosting the World Cup. According to The Wall Street Journal, the IMF said that, “…oil prices will lead to a substantial deterioration of the fiscal and external balances.” While Qatar will be safe in the short term, long-term prospects look bleak. Last year, Saudi-owned Al-Arabiya estimated that total expenditures for the World Cup could reach $200 billion, 50 times what South Africa spent and 10 times what Russia will spend.
Qatar faces no shortage of criticism for winning the right to host the 2022 World Cup. Accusations that the country bribed FIFA officials to win the World Cup bid are resurfacing as a book will be released on the subject. The Qatari government and its media are constantly defending their potential to host the world’s most popular sporting competition. It seems that the country will continue to argue that it’s capable of taking on this massive venture.