Goldmine or minefield?

Clearly, staging a major sporting event represents a big opportunity for an emerging economy. It offers a chance to announce its newfound power and status on the world stage, and delivers an army of overexcited consumers on a mission to spend. So these blockbuster events have become a means of recognising, measuring and furthering economic progress. But the stakes are high. While the cash injection and the attention of tourists worldwide are obvious incentives, these promises bring with them the need for a massive investment in infrastructure, and international scrutiny of social and economic structures. The inclination to overpromise at the bidding stage is strong, while failure to deliver is unthinkable.

When South Africa was awarded the 2010 World Cup, many questioned its ability to produce the goods . And if it did deliver, they worried about the social cost of that preoccupation in a society beset with problems. Would the country's elites craving for international recognition that lead them to sweep inconvenient people and problems under the carpet? Those concerns linger, as they do from Beijing last year, but South Africa has surprised everyone by fast-tracking construction and development. To the naked eye at least, its house is in order for next summer's big party and its hosting has proven a net positive.

Likewise, when Poland and the Ukraine were awarded the 2012 European Championships, a similar combination of promise and apprehension presented itself. Everything needed a thorough makeover - transport, stadiums, accommodation, administration - and the Championships seemed the ideal stimulus for such investment. But with Ukraine's economy having taken a spectacular hammering in the credit crunch, it is having difficulty financing the operation and its hosting looks in doubt.  Stadiums remain substandard or unfinished, the project is riddled with corruption, critical hub airports are underdeveloped, and UEFA stands on the brink of stripping the staging rights from Donetsk, Lviv and Kharkiv.

Ukraine has perhaps been unlucky, but its problems also expose the fault lines in the policy of using major sporting events as catalysts for further growth in developing economies. There are tensions between the need to resuscitate its economy and the need to stage a safe and successful tournament. Construction at the Lviv stadium is on hiatus because the Austrian contractors were dropped in favor of Ukrainian equivalents who have no experience of stadium construction. What is good for the Ukrainian economy is potentially calamitous for the football tournament it is staging. Likewise, there is concern that the games have become another pawn in the increasingly desperate power struggle between President Yushchenko and Prime Minister Tymoshenko. Accusations of politicking, withholding funds and overpromising are traded back and forth, whilst progress stagnates and the prospect of a footballing celebration of Ukraine's progress looks like increasingly unlikely.

If it comes to it, UEFA's Michel Platini has said he will be brutal in his assessment, and is ready to strip Ukraine of some or all of its rights. The tournament should be neither a life raft for the economy, nor a plaything for its politicians. Of course he's right, but this precarious situation demonstrates how sporting bonanzas bring unique pressures as well as opportunities for developing economies. They are axes of rather than agents for change, and can serve to catalyse problems as well as potential. In Beijing and apparently South Africa, the pressing need to keep up appearances has led many to believe that social problems have been silenced rather than remedied. In Ukraine, the problems are more immediate and globalised, but the legacy of a failure this conspicuous and systemic may hamper its progress more in the long term. Hopefully, these issues will be factored into assessment of bids going forward, with fewer promises and more caution.