Economic and Social Impact of the 2014 World Cup

Kimpacto, Inc. 
- Kim Kastorff, Francesco Baldissera -


Summer 2014 in Brazil, the world's most followed sporting event is held.  Despite all the emotions that the sport generates for its greatest fans, you can not ignore its great economic and social impact on societies, not all of which is positive.

Maybe this World Cup has been characterized by one thing: the protests and negativity which certainly impede what should be celebrations and rejoice for their deep love - football (soccer).  Of course, the Brazilians are not without reason.  There are two that seem to be primarily responsible for this civil unrest, (1) the International Federation of Association Football (“FIFA”) and (2) the Brazilian government.

First, the Brazilian government's main criticism is the assumption of the costs of infrastructure and hosting this event. Building multimillion-dollar stadiums in a country with serious problems of education and health was one of the main complaints during massive demonstrations regarding the exorbitant economic cost of $11bn - twice that of the South Africa cup - according to BBC.  Even die-hard fans have a hard time justifying this displacement of dollars, and especially during the slowing Brazilian economy.  

While others agree with the decision to hold the World Cup in Brazil, and that perhaps it may boost the economy through tourism and consumption, and open our minds (and pocketbooks) in support of social change - as seen in the favelas, for example.  Kim Kastorff, founder of Kimpacto recently met with Elliot Rosenberg who started the “Favela Experience” in a Rio-based favela, which allows tourists to enter the local reality of the World Cup but from the viewpoint of a favela (areas of extreme poverty).  Based on this visit, there appears to be heavy police presence and also reports of favelas being raided by police to "clean up" drugs and weapons before the World Cup.  Perhaps, there are some positive social changes and some (relatively) safer communities being created, despite it’s intention - which is to keep the foreign tourists safe.  Most surprising, however, is that the World Cup tourists are choosing to spend some of their time touring, sleeping in, and discovering the ‘real’ side of Brazil, and its’ corresponding social issues, and even spending their tourist dollars in these poorer communities.

So then, we can think positively - what if hosting the World Cup could lay the foundation for long-term economic growth and perhaps unleash the true social development that Brazil needs?  Some argue that the World Cup has contributed to increasing wealth over the past several years, and the increasing population that are coming out of poverty and entering the middle class.  While clearly there have been some positive economic and social trends, the issue doesn’t end with purely World Cup Economics nor the Brasilian government - on the other side is FIFA - and here the World Cup bashers see the glass as half empty.  

Some of the hostility has been triggered by the FIFA scandals of recent years, which have tarnished its image.  It many minds, it is no longer an institution that promotes the positive aspects of the sport, nor as a contributor to the social fabric that will make this a more sustainable world.  To make matters worse, we experience the deaths of Brazilian workers who are building the stadiums and infrastructure, some working in ‘slave-like’ conditions, meanwhile thousands of poor people are being evicted and now homeless, and then comes mounting concerns over child prostitution, and the list goes on.  

While it takes some effort to be a socially responsible company, these FIFA scandals and related incidents are an element of public relations which demonstrates no real commitment or global vision for creating positive social change in developing economies such as Brazil - and especially given that FIFA is an institution with immense power, money and worldwide impact, and unfortunately a role model for our youth and our future.

What is FIFA’s response?  It is really the responsibility of the government.  According to the Guardian Sustainable Business, “But Fifa and corporate sponsors are missing a powerful opportunity to negotiate with the government to make sure that communities are compensated fully, workers are well-treated and fairly paid, and vulnerable people are protected. They could play a bigger role in giving the World Cup an enduring legacy of human rights and prosperity.”

What can we do, as citizens and fans?

First, every one of us should make a commitment and responsibility to improve our communities.  For institutions such as FIFA, we could push for an increased focus on collaboration with local institutions and non-profit foundations beyond UNICEF, and to let our voices be heard in regards to corporate responsibility, human rights, and social impact.  Perhaps these riots could be turned into positive social campaigns during the World Cup.  For example, we could further promote tourism development in areas of the country that are traditionally marginalized by poverty, and all the corresponding social problems that arise from it.  We should think about a collaborative and shared economy, where we ALL play a role and as we join in efforts with our public institutions, private business and other ordinary citizens - so the true empowerment of communities is achieved.

So, who are the good role models?  Although there are many non-profits, foundations and companies that engage in social enterprise and impact investing (e.g. Education, Poverty, Health), Kim Kastorff (of Kimpacto) was fortunate to be in Brazil at the opening of the World Cup and to meet some of the social leaders, including Pipa who is accelerating entrepreneurs and businesses who generate high social impact. Also, VOX Capital who is the first Impact Investing fund (GIIRS rated) in Brazil and supports innovative business solutions targeted to help low-income populations; Gera Venture who has made strides in developing and raising the bar for the education sector; and SITAWI who offers professional support and investment solutions to socially responsible businesses throughout Brazil.

While these companies are some of the key leaders in Brazil who are offering more sustainable, innovative and socially responsible solutions; they need not be unique. Everyone can take a first step, and to establish channels of communication with similar groups and to engage in a social cause - whether in Brazil or your home community.  We feel it is a golden opportunity for the World Cup games to set a social example for the world to follow, and as a stepping stone for the 2016 Olympics in Rio. 

So, I leave you with a thought - What if we put the same media attention, citizen effort and energy into impact investing and the resolution of social problems? What could we accomplish if we change our negative energy (riots, strikes, scandals) to positive energy (social change)?

For inspiration, please check out The World Cup Project, “a new documentary mini-series that will showcase the world’s favourite sport - football - and its power to impact social change around the globe in the build up to the 2014 World Cup.”

We want to know your opinions, and your social initiatives in your home community.  Also, if you want to offer support or have ideas, please reach out to Kimpacto ([email protected]).  Obrigada and enjoy the World Cup!

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