Controversy over the Zimbabwean and Kenyan 2003 World Cup Cricket matches has stolen the limelight in the build-up to event. And in the last few weeks executive director of the event Dr Ali Bacher seems to have spent more time putting out fires than focusing on the spin-offs of the event.
Yet, most Cape Town bed and breakfasts and hotels are already fully booked for the weekend in anticipation of the opening of the ICC Cricket World Cup (CWC) at Newlands on Saturday.
Likewise, car rentals are significantly up in comparison to last February and many airlines have scheduled extra flights over this period.
ICC Cricket World cup communications director Rodney Hartmen said that about 20 000 overseas visitors are expected in the next two months. Even without official numbers to work with, economists believe the CWC will have a positive impact on the local currency.
Chris Hart, economist at Absa Treasury, said he believed the CWC would contribute to the rand maintaining its strength.
“As foreigners exchange dollars and sterling for rands the local currency is helped, as well as the current account surplus. Some bookings have been done in advance, others will only be made once spectators know which teams are in the finals, so it is hard to determine when the flood of money may come in,” he said.
Hart cites the Sydney Olympic Games as an example, explaining that while the event did not arrest the Australian dollar’s decline, it did slow it.
“The fundamentals that affect a currency will remain, and in the case of Australia, those fundamentals were pulling the dollar lower despite the games. But the rand is in a strengthening trend, and the CWC may boost this trend.”
Hart said the indirect effects are also important in the long term.
“The rand is undervalued, making South Africa a cheap destination. Tourism is boosted by such an event and it is likely that some may return for other holidays — or even to buy property — bringing in foreign investment,” Hart added.
A currency trader said he believed there may be some goodwill effect on the rand, but that most dealers were not expecting the CWC to have a significant impact.
“There may be some spin-offs, with extra jobs created during the event, but once the tournament has come and gone those benefits will be over,” he added.
Dawie Roodt, economist at PLJ Financial Services, supported the notion that such an event would help prevent the rand going weaker, and may act as a stabilising force.
“But with recent developments in the drive for war in Iraq, the CWC really takes third or fourth place in importance to the markets,” he said.
“In the long term, though, there should be psychological spin-offs — as long as there is no violence.”
Roodt said that with South Africa’s present strong current account, the CWC should be additional support for the currency, but that looking at economic fundamentals, there may be a weakening in the currency come mid-year. And that was only if the war factor became irrelevant.
Both Tourism South Africa and the ICC Cricket World Cup 2003 offices are planning to conduct post-event surveys of how much tourists spent and their perceptions of the event, which ends on March 23. – I-Net Bridge