Preparations surrounding the World Cup have created an estimated 415,000 jobs in South Africa, where the unemployment rate was 23.5 percent in the first quarter of 2009.

Preparations surrounding the World Cup have created an estimated 415,000 jobs in South Africa, where the unemployment rate was 23.5 percent in the first quarter of 2009.

South Africa has planned a $1.2bn outlay on the building of five new stadiums and upgrading of a further five venues to stage the football matches.

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Rainbow revival

From the UAE to the US, governments have unveiled capital spending programmes to help fight the downturn. South Africa’s infrastructure spending spree is bigger than most as it gears up to host the football World Cup in June 2010 — a preparation it hopes will stimulate its sagging economy.

South Africa and the gulf region have more than their diverse populations in common. As both seek a fast-track to recovery from the global recession stifling world economies, an escape route is emerging in the form of expanded infrastructure spending.
Integral to reviving the region’s flagging construction sector, creating jobs, easing the flow of credit and attracting investment, many economists consider stimulus packages targeted at civil infrastructure as a vital tonic to ailing economies.

GCC states haven’t waited to be told twice. Work will start next spring on the multibillion-dollar Qatar-Bahrain causeway, a 40km road and rail development planned to become the world’s longest fixed-link marine crossing, and predicted to provide a major economic boost to both states.

Half of the $2.7bn Abu Dhabi Municipality is set to spend on infrastructure this year will be on road projects, with neighbouring emirate Dubai setting aside $79m for three major road projects.

The 2009 budget for Saudi Arabia, the region’s biggest economy, includes $13bn billion for water, municipality, agriculture, industry and infrastructure, and $5bn for transport and communication.

And GCC states are not alone in deciding that expansionary capital budgets could revive limp economies. US president Barack Obama’s government is overseeing the delivery of the largest public works construction scheme since the inception of the country’s interstate highway system half a century ago.

In Europe, Germany’s coalition government has agreed a controversial economic stimulus package worth about $67bn, covering infrastructure investments in railways, roads and schools.

But nowhere is the theory of economic revival through capital spending being tested more stoutly than in South Africa.

The Rainbow Nation is in the midst of the third largest infrastructure programme in the world as it prepares to host the football World Cup in June 2010.

“The World Cup has been absolutely critical for South Africa,” acknowledges Leslie Maasdorp, international advisor at South African investment bank Absa Capital. “It [the tournament] has been key to boosting the construction sector, so has been a major positive factor.”

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