Global sporting events 'aid developing nations'

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In the last of our articles from The House Magazine in 2009, in this piece from November Kate Higgins, a research officer at the Overseas Development Institute, explained why the World Cup will bring long-term benefits to South Africa.

The 2010 World Cup will shine a spotlight on South Africa – the first African nation to host the world's biggest sporting event.

That spotlight will then turn west in 2014 and 2016 when Brazil hosts the World Cup and Olympics.

It will be an opportunity for these two countries to showcase not only their sporting prowess, but also the impressive economic development they have seen over the past two decades.

But while the playing field may be levelled during the tournament, with athletes competing as equals, off the pitch it is a different and far more unequal story.

South Africa's transition from apartheid to democracy has been lauded and the country's economic growth has been robust: GDP growth has been steady since the mid-1990s, peaking at 5% between 2005 and 2007.

Brazil has also made its mark as a strong and emerging economy: GDP growth has been sustained since 2000 and peaked at 6 % in 2004 and 2007.

Despite this strong growth record, however, South Africa and Brazil remain two of the most unequal societies in the world.

According to the United Nations Development Programme's 2009 Human Development Report, South Africa is the 7th most unequal country in the world, with Brazil in 9th place.

The credible CIA World Factbook is even more bleak, ranking South Africa as the second most unequal country in the world (following Namibia), and Brazil the tenth.

From a development perspective, what is critical, particularly in highly unequal societies, is that a country's economic growth translates into genuine and sustainable reductions in poverty and inequality.

Brazil is making progress here – increased GDP growth has been accompanied by reductions in income inequality, according to the gini index, which shows the level of income inequality in a society.

But the situation in South Africa is less positive – GDP growth over the past two decades has been accompanied by increased income inequality.

The case for supporting economic growth that includes and benefits people across the economic and social spectrum is well documented and compelling: it can result in lower levels of poverty, a larger and more productive workforce, a more substantial tax base and a more harmonious, cohesive society.

To achieve this, there are broadly two things policy-makers need to think about.

First, ensuring that poor and marginalised people have opportunities to participate in and benefit from growth. Policy-makers can do this by supporting infrastructure development in marginalised regions, ensuring micro-credit is accessible and affordable and providing services so people have the training they need to take advantage of new market opportunities.

Second, they should develop and back policies that redistribute the gains generated through economic growth in a way that helps poor and marginalised people participate in and benefit from growth.

A focus is needed on social protection policies, coupled with policies for universal education and health, all of which build and preserve people's capabilities to take an active part in economic activities.

A similar formula will be needed if the World Cup and Olympics are to support poverty and inequality reduction in South Africa and Brazil.

Policies need to be in place to ensure that all economic and social groups – particularly the poorest and most marginalised – benefit from the opportunities arising from these events.

Employment opportunities, improved infrastructure and increased tourism are critical here. In addition, the revenue these events generate need to be used in a way that tackles the causes of inequality.

If this line of thinking informs the development strategies of South Africa and Brazil, there is a good chance that, as well as entertaining the world and reminding us of shifting geopolitics, these sporting events will contribute to a development direction that combines strong growth with reductions in poverty and inequality.