Economic World Cup Lessons for Lanka

Rohantha N.A. Athukorala

Just like any other great sporting events of the world like the Greek Olympics costing 12.5 billion dollars and the Beijing Olympics that ran a bill of US $ 40 billion, the soccer world cup in South Africa cost the country US $ 4.3 billion which incidentally was 1.7 percent of the country’s GDP.

This happens to be the highest recorded in the history of the games. It is interesting, given that it is 10 times the budgeted cost estimate done around six years back.

But once again we see that a sporting extravaganza of this magnitude has taken the country down the drain financially just like what happened to Greece at the 2004 Olympics.

Some even say that the EU crisis stemmed from the project Olympics that was mismanaged and it ultimately shaved off 2 percent of the GDP of the EU. However, I strongly believe that the spirit of humanity gets a boost with such events like this be it the Greek Olympics or the Beijing games where the great Michael Phelps revealed how he overcame the deficiency of the attention deficit disorder to conquer the world with the eight gold medals.

World Cup Lesson 1: Brand South Africa

The games were a disaster with under-estimated costs, escalating security budget and political in fighting on where public funds are directed in the already challenged South African economy.

However, once the games were over President Jacob Zuma highlighted that the world has seen South Africa in a different light. The world has also seen the warm and friendly people of the country. The world has also seen the precision of South Africa’s planning and logistics arrangements Zuma said.

Sri Lankan Economy:

The lesson for Lanka is that the recently staged IIFA in Colombo, was only the beginning of the re-branding exercise that Sri Lanka has just begun. May be post the world cup that Sri Lanka will play host, we must pitch for a biggy. I am not sure what this event will be but may be it could be the World Economic forum.

World Cup Lesson 2: Full membership with international community

Two decades ago South Africa was ostracized from rugby and other global sports due to the apartheid regime. No one ever dreamt that Nelson Mandela will walk free. Even today, most up market neighbourhoods are under very high security.

However, the passion for sports made South Africa re-visit the un-finished business -full membership with the international community. The soccer world cup helped South Africa achieve this.

Sri Lankan Economy:

The dream of travelling from Galle to Jaffna is a reality. We must now get full membership with the international community like what South Africa did. It cannot be the world cup cricket as it does not reach the total of EU and the Americas. Hence may be the only option is Miss World.

World Cup Lesson 3: 80/20 Principle

There are 12 yards in distance from the penalty spot where the ball is placed, to the mouth of the goal. 46 yards from half way place where players stand when the match ends in penalties.

This means that a player has to walk 46 yards on his own, all the while thinking through the penalty that he is about to take whilst 60,000 people are watching and may be millions on TV.

Sri Lankan Economy:

The basic lesson in life is that 20 percent of the issues create 80 percent of the bad publicity. This is also called the Pareto principle. On this premise Sri Lanka must address the housing and livelihood opportunities of the people in the Wanni.

This is around 163,000 new houses, repairs to around another two hundred thousand so that we can avoid the 80 percent of the problems that the international community keeps highlighting Sri Lanka for.

I guess we must address this as a priority if we are serious about meeting this challenge.

World Cup Lesson 4: All about goals

Whatever the pundits say Goals win matches. Everything else is commentary. Everyone predicted Argentina, Brazil, Germany and France to win the world cup, but finally the teams that made it were Netherlands and Spain. The logic being goals decides the winner and nothing else. Netherlands in particular loved attacking the ball and that, got them in to the final.

Sri Lankan Economy:

I feel Sri Lanka’s economy is very strongly goal driven. Be it the $ 2000 per capita income, the achievement of the millennium development goals, the defeating of the LTTE, the 800 wickets by Murali and the 7 percent GDP growth we achieved in the 1st quarter.

But the realities behind the numbers need to be understood.

Do these numbers reflect the true position in the regions outside the western province? May be the time has come for a unique private public partnership so that we achieve equity at all regions.

I guess we need to now build on this culture and set clear objectives region wise so that we can then as a nation chase after them. After all goals win matches and everything else is commentary.

World Cup Lesson 5: Fundamentals win games

I saw many a times at the World Cup where soccer players do amazing things with the ball but when it comes to the moment of truth what we see is that the team that play simple games on the fundamentals always wins matches. If we carefully analyze the finals the only reason why Spain won was because they stuck to the fundamentals than the Dutch, who played fancy football but lost at the end.

Sri Lankan Economy:

We also need to stick to the fundamentals. As someone said we do not need branded names for our economic principles like ‘IMF budget. The fact is that a 9.7 percent fiscal deficit is not healthy for any country. We have to get back to the fundamentals and correct this situation with the support from the private sector. Either we can privatize the loss making state enterprises of the state or a better option is to offer it to the public. The Government can earn some money and also ensure that good governance sets in to the system.

World Cup Lesson 6: Stay onside

Soccer has many rules and regulations and unless they are followed a yellow card or becomes a reality. The Netherlands got nine out of the 14 cards for being away from the game rules in the final. This marred the game and included the karate kick that brought disrespect to the game.

Sri Lankan Economy:

It’s very important that Sri Lanka be seen ‘On side’ to the rules of the world, however right we are. We need to do this conciouslessly even if things are tough. Whilst I say this given that I have worked in global markets we as a nation should not tolerate in any way to be bullied not be subject to double standards but we need to do this with maturity.

We must not let the 20 percent of actions drive an 80 percent bad publicity as we have to protect our global exports and international aid that comes from many nations to countries like ours. This also applies to the corporate sector to be on the ‘On side’ of the government in power. It’s an unsung success ingredient in today’s world.

World cup Lesson 7: Loyal Fans

In the world of soccer we see how fans help teams stretch that extra mile to win games for their country. The spirit that drives team is crowd power. This is exactly what took Paraguay to beating some of the more fancied names at FIFA 2010.

Sri Lankan Economy:

It’s very important to maintain the loyalty base in our brands in the corporate sector as well as the countries that are loyal to our country and supported the war.

We have to manage the CEPA issue with the Indians with maturity. I also see how those in high offices working on week-ends in their constituency to keep the loyalty of the voter base and essentially the ordinary people in the lower level of the social strata. This means that Sri Lanka is fast learning.

World Cup Lesson 8: Its all right to lose

Spain lost their opening match but went on to win the prize jackpot the World Cup.

This means that failure is not the final of one’s quest to greater heights. Its actually the beginning and a springboard to success. I guess its all about how one reacts to failure and not the loss in the eyes of the public.

Sri Lankan Economy:

I like to highlight an industry which is very close to my heart. The tea industry of Sri Lanka.

Yes we were beaten last year by Kenya in the world stage of exports but I am sure with the strong leadership that the industry is seen in the tea sector, Sri Lanka will once again bounce back. But we need to invest strategically.

Re-planting has to happen as in the corporate sector most tea bushes are at senility stage.

On the demand end we must invest at least 20 million dollars to demonstrate that post war, Sri Lanka is a nation to watch in the world stage of business.

World Cup Lesson 9: Prepare for spot kicks

The truth is that we must be ready to take the spot kicks that life offers us. I saw many a teams at FIFA losing the games due to spot kicks that were actually not right. But it’s the same with life as life is never fair all the time.

Sometimes life does not give one what one deserves. Sometimes even after much preparation, we are not ready to take the opportunities that life offers.

Sri Lankan Economy:

I see that same opportunity for Sri Lanka that is not exactly fair. Namely the 50,000 houses that the Indian government has offered as a grant for the people of Vanni. The reason that I am saying it’s not fair is because I have worked in India and in the outskirts of places like Behala in Calcutta, and I have seen that there are more people in India that require basic housing, than Sri Lanka. But we have got this ‘Spot kick’ in life and now must take it. We must cut through the bureaucracy and get the architecture right so that we can use this facility at the earliest.

World Cup Lesson 10: Don’t count on referees

There were many blunders at the Last World Cup. In fact FIFA President Sepp Blatter made a public apology after having watched the video goal reviews. But most teams decided that they need to monitor competitor behaviour and alert the referee as and when required when things were rough than, just leaving it to the referee.

Sri Lankan Economy:

The implication to Sri Lanka is the same when it comes to the mobile phone industry and the privatized tea industry of Sri Lanka. If not just like what I was saying before the whole industry can be in the red once again.

World Cup Lesson 11: Believe in being lucky

To win a World Cup one needs to be in lucks way too apart from the sheer skill that one demonstrates. But this can happen only if one believes that you can be lucky. We have heard many a times where there were statements like the ‘hand of god’ but these happen only to those who believe.

Sri Lankan Economy:

Let’s accept that Sri Lanka is a lucky country as a whole. If the Mumbai attack did not happen in India, Prabhakaran would have some how twisted the arm of India. When things were rough financially the financial crisis happened and oil prices plummeted from 150 dollars to 28 that let to the 40 percent decline in our import bill in 2009. We must now believe in luck and re imagine and recreate as per the theme of the CIMA conference.

World Cup Lesson 12: Recruit A-B-C grade performers

If we take Brazil, Italy, Germany, Spain or Netherlands they have a game plan to recruit systemically from local clubs to schools and then at club level. Their logic is that it’s a war for talent and retaining this talent needs focus with consistency.

Sri Lankan Economy:

We need to have this same spirit in the public sector. After having served the country in the national economy what I see now is a set of high level authorities that are very competent and performance led. May be because the election has brought in a young set of politicians that are very strongly performance driven. Hence the second bench is strong that drives performance at the top. We need to now let this drive to the rest of the levels so that we can see the reforms that are coming into the system will get implemented.

The World Cup in South Africa is very dubious from a financial perspective even though economists predict that the country grew by 0.5 percent to 2.2 percent due to the world cup. But the reality is that unemployment levels have increased and the country will have to pay its debts due to the World Cup for the next generations to come. But the lessons it has taught the world makes such events the need of the hour where humanity is in question.