Saudi Arabia has been officially designated as the host nation for the 2034 World Cup, marking the prestigious tournament’s return to the Gulf region for the second time within a decade, a choice that has already led to significant controversy.

For Crown Prince Mohammed bin Salman (MBS), this could represent a noteworthy victory in his efforts to use sports to attract tourists, increase global influence, and reshape the nation’s image.

“This is a groundbreaking achievement for MBS and the Saudi state. It is arguably the pinnacle of their sports strategy thus far,” remarked Stanis Elsborg, director of Play the Game, a Denmark-based organization dedicated to ethical standards in sports. “Yet, for MBS, hosting a tournament is merely a piece of a much larger puzzle.”

Saudi Arabia is currently in the eighth year of a multi-trillion dollar initiative aimed at decreasing its economic reliance on oil revenues. This plan involves the development of various new industries, societal modernization, and welcoming tourists.

The kingdom has invested heavily in sports as a means to advance these goals both domestically and internationally, with the hope that high-profile events like the World Cup will energize its young population.

However, the Saudi bid for the 2034 World Cup has encountered controversy from the outset.

‘Darker side’

Advocacy groups, including Amnesty International, have expressed concerns about the exploitation of labor, while several U.S. senators have urged for the rejection of the bid in light of Saudi Arabia’s dismal human rights track record.

U.S. intelligence agencies have linked the 2018 murder of Washington Post journalist Jamal Khashoggi to MBS, who was once a close ally and later a critic within the royal court.

According to Elsborg, the kingdom hopes to utilize the World Cup as a distraction from these serious issues.

“We mustn’t ignore the darker aspect: this isn’t simply about passion for the sport,” he emphasized. “It’s about using sports to deflect attention from their abhorrent human rights practices and to gain global legitimacy.”

The Saudi government did not provide a response to a request for comment.

‘Sportswashing’

Qatar, which hosted the inaugural World Cup in the Middle East in 2022, faced similar accusations of sportswashing to shift focus away from its human rights issues. Nonetheless, the event was viewed as a sporting success, enhancing the small nation’s reputation globally.

Saudi Arabia seeks even greater advantages.

MBS has cultivated a relationship with FIFA President Gianni Infantino, who has consistently promoted the nation as a prospective World Cup host. Additionally, Saudi oil giant Aramco has become a significant sponsor of FIFA events.

Ultimately, Saudi Arabia was the only bidder for the 2034 World Cup after Australia withdrew, making its selection almost assured before FIFA’s final decision was announced on Wednesday.

World Cup stadiums

The precise dates for the 2034 World Cup are still to be determined, according to Saudi Arabia’s sports minister. Matches are expected to occur in 15 different stadiums across five Saudi cities, including Riyadh and Jeddah, with eleven of them being entirely new constructions.

The associated construction and spending demands could increase pressure on an economy already facing years of budget deficits, compounded by ongoing investments.

Saudi Arabia anticipates a fiscal deficit of around 2.8% of GDP this year, and for every subsequent year until 2027.

The kingdom has not indicated when it expects to revert to budget surpluses and has suggested that operating at a loss is a necessary trade-off for investing in growth beyond the oil sector.

“A fiscal deficit of 2% to 3% in a stable region is advantageous for investing in critical economic areas,” noted Faisal Al-Ibrahim, the minister of economy and planning, last month.

The kingdom has increasingly relied on sovereign debt issuance to fill this gap and plans to continue borrowing into 2025. According to Moody’s, this increased activity may raise Saudi Arabia’s debt-to-GDP ratio to 35% by 2030, still much lower than many other nations.

“They have ample resources to fund it,” commented Justin Alexander, director of Khalij Economics and an analyst for GlobalSource Partners. “While they may occasionally need to borrow more or curtail spending in other areas to support this, it remains a clear priority.”

Construction concerns

Construction linked to the World Cup will add to the $1.3 trillion in real estate and infrastructure projects that have been announced across the kingdom since 2016.

At the same time, Saudi Arabia will prepare for two significant sports championships within the next five years and the World Expo in 2030.

Migrant workers, who form the core of Saudi Arabia’s construction surge, are already subjected to widespread labor abuses, prompting Human Rights Watch to assert that it is “almost certain” the 2034 event will be marred by rights violations.

The rush to complete new stadiums in Qatar ahead of the 2022 event led to compromised safety measures and the deaths of hundreds of migrant workers, as reported by various media outlets and confirmed by government officials. Many of the issues that plagued the selection of the small but resource-rich nation are likely to resurface for Saudi Arabia.

The Qatar World Cup faced backlash from some club owners who argued that the shift to winter events disrupted domestic leagues. Additionally, the host country’s views on homosexuality sparked concern, with human rights and LGBT advocates contending that the World Cup might not be welcoming to all sports enthusiasts. Alcohol consumption was also banned within stadiums.

Trophy moment

The tournament came to a head with Argentina’s win over France in a penalty shootout, a match analysts have labeled one of the finest World Cup finals in history, further cementing Lionel Messi’s status as the premier clutch performer of his generation.

The iconic image of Messi triumphantly hoisting the Jules Rimet trophy, cloaked in the traditional black Arab bisht given to him by Qatar’s ruler Sheikh Tamim bin Hamad Al Thani moments earlier, went viral, bolstering the nation’s reputation and soft power.

Following the World Cup, Qatar experienced a surge in tourism by 58% year over year in 2023, and it is projected to reach record levels in 2024.

Prince Mohammed of Saudi Arabia may be envisioning a comparable outcome.

The kingdom aspires to welcome 150 million tourists annually by 2030, with 70 million coming from abroad. The government has committed to investing almost $1 trillion into the tourism sector over the next decade to elevate its profile as one of the most visited destinations globally.

“Securing this bid sends a powerful message: Saudi Arabia is ready to assert its position on the global stage and is dedicated to reshaping the region’s tourism narrative,” stated Anita Mendiratta, special advisor to the UN Tourism secretary-general.

Hosting the World Cup could potentially attract millions of new visitors and create new revenue streams, further supporting the country’s broader diversification goals.

© 2024 Bloomberg L.P.

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