that hosting major events could be beneficial to cities if carefully planned. the barcelona olympic games of 1988 are today considered a model of how to plan for a mega event. the barcelona games were integrated into an urban renewal strategy and the economic outcome of barcelona hosting the olympic games was significant. unemployment in barcelona was reduced significantly from 18. 4 per cent to 9. 6 per cent between 1986 and 1992 and from 20. 9 per cent to 15. 5 per cent in the country as a whole. overall growth in barcelona is said to have increased at a pace never seen before, even a decade after hosting the games. similarly, the sydney olympic games which took place in 2000 were planned in such a way as to generate positive spin - offs well beyond the actual event. in the case of sydney, city planners focused on infrastructural development of the venues for the games such that these venues could be used for subsequent sporting events. it has been claimed that the sydney olympic games were beyond a sporting triumph. as we are all aware, south africa has won the 2010 fifa world cup finals bid and preparations to host this event are in progress. there is considerable reputational risk associated with the hosting of the 2010 world cup finals, and the success of the world cup finals in germany puts even more pressure on us to raise the bar. we stand to benefit from the experience and advice of countries that have successfully hosted similar events. as i noted earlier, we have already hosted numerous events, although none perhaps on the scale of the fifa world cup finals. research has shown that south africa also stands to benefit from hosting the 2010 fifa world cup finals. according to a grant thornton study conducted in 2003, the event is expected to contribute about r21 billion for the economy as a whole, generate about r7 billion in tax revenue and create about 150 000 jobs. it is not possible to fully and accurately estimate the potential gains to the economy from hosting the world cup finals ex - ante. however, there is little doubt that with proper planning and interventions by all the relevant stakeholders the potential benefits can be maximised. the spin - offs in terms of tourism, communications and television technology, transport infrastructure to name but a few are significant. tourism has become an increasingly important source of revenue to the economy and now accounts for about 10 per cent of total export receipts, almost double that of 10 years ago. this number is expected to increase further as a result of the world cup finals. 4. growth and investment

in south africa preparations for the world cup come at a time when the economy has been experiencing strong economic growth. the persistent adherence to prudent macroeconomic policies by the authorities has resulted in the country ’ s solid economic performance in recent years. south africa has experienced the longest upswing in its business cycle lasting almost 7. 5 years to date. the average growth rate between 1994 and 2003 measured around 3 per cent, but in the last 3 years, growth has averaged 5 per cent. in the fourth quarter of 2006, annualised growth measured 5, 6 per cent. the growth has been spread across all sectors of the economy with the exception of agriculture. underpinning this strong growth has been a positive trend in investment growth. it is of interest to note that gross fixed capital formation as a ratio to gdp was around 12 per cent at the beginning of the decade. it is now around 19 per cent. this is a significant shift in the economy which we should not lose sight of, and a trend that is likely to continue in the light of the government ’ s asgisa growth strategy. central to this strategy is a strong focus on infrastructural investment. as indicated in the latest budget review, government and public enterprise infrastructure expenditure over the next 3 years is estimated to amount to r416 billion. this investment should not only raise current growth, but will also allow for sustained future growth over the medium to long term through improved transport, communication and electricity provision. these improvements are expected to ease bottlenecks to current and future growth and exports. this is particularly the case when it comes to investment in transport infrastructure, whether rail, air, road or the ports. government has made special budgetary allocations totaling r8, 4 billion for the building of stadiums. this is in addition to what municipalities have committed. furthermore, over r9 billion will be allocated by national government for municipal transport, roads and precinct upgrades relating to the word cup games. apart from these budget provisions, the investment requirements for the event dovetail well with the planned infrastructural investment over the next few years. the 2010 world cup finals will help to maintain the focus on infrastructural and investment expenditure projects such as the gautrain, new stadiums and communications technology, to name a few. much needed airport expansions are also taking place in anticipation of an influx of tourists for this event. as noted in the latest budget speech by the minister of finance