Opinion Continental drift

While accepting requirement of uncertainty in sport,the quarter-final lineup was completely unexpected — Europe has under-performed,Latin America has over-performed and from Africa,few people would have predicted Ghana. In addition to the quarter-final lineup,group matches illustrated the reduced gap between teams. If globalisation is interpreted as players playing in leagues in other countries,and thereby improving standards thanks to competition,this is an outcome of globalisation. That argument also applies to tactics,strategy and coaching. Globalisation is positively correlated with economic performance. If globalisation is positively correlated with football performance,there should be correlation between economic performance and football performance. On the face of it,if we restrict ourselves to the quarter-final lineup,there is no obvious correlation. The range of official exchange rate per capita incomes is from $48,223 in the Netherlands to $671 in Ghana. PPP (purchasing power parity) conversions don’t alter the picture. Netherlands moves to $39,938 and Ghana to $1,551.

But the key is definition of economic performance. Is it absolute level or increment? For instance,take the five European countries in the top 10 of FIFA rankings that have been eliminated. In the four years from 2005 to 2008,before the financial crisis,Portugal’s real GDP growth rate ranged between 0 per cent and 1.9 per cent,Italy’s between -1 per cent and 2 per cent,England’s (UK’s) between 0.7 per cent and 3 per cent,France’s between 0.4 per cent and 2.3 per cent and Croatia’s between 2.4 per cent and 5.5 per cent. Paraguay and Ghana may be regarded as unexpected qualifiers. Paraguay’s real GDP growth ranged between 2.9 per cent and 6.8 per cent and Ghana’s between 5.7 per cent and 7.3 per cent. There is suggestion of some correlation,with Croatia an exception.

However,one shouldn’t generate empirical hypotheses through isolated examples. Even if one correlates football performance with increments to GDP growth,where is Asia in FIFA rankings or World Cup performance,the two Koreas and Japan notwithstanding? Where are China and India? Despite the World Cup being held in South Africa and African growth rates picking up,even in sub-Saharan Africa,where is Africa,Cameroon,Ghana and South Africa notwithstanding? But these counter-questions also beg the question. An empirical hypothesis is on an average. Outliers don’t negate the hypothesis.

There is a Goldman Sachs study undertaken in May 2010 that did this systematically. Others aren’t terribly interesting. This one correlated gross environment scores (GES) with FIFA rankings. Gross environment is fundamentally economic and includes variables like rule of law,corruption,political stability,life expectancy,inflation,external debt,government debt,gross fixed capital formation,schooling,openness,computers,mobiles and Internet. This is a broader canvas than GDP or its growth. The study found a correlation between improvements in GES scores and improvements in FIFA rankings and the correlation is stronger for new entrants into global competitive football,than existing strong players. With Latin America a heterogeneous entity,Brazil and Argentina don’t quite fit the picture. Neither does North Korea. And correlations are stronger if these are excluded. Actually,this is more than correlation,because causal relationships can also be ascribed. Factors that improve GES also enhance sport infrastructure,training and health conditions and provide opportunities and competition.

What of the future,not just 2010? After all,Goldman Sachs has always been fascinated with BRIC (Brazil,Russia,India,China). Goldman Sachs doesn’t quite stick its neck out,except raising questions about whether Russia’s present footballing status will continue. Instead,it quotes another study to the effect that we should watch out for Japan,the US and China,other than Africa. That makes eminent sense,including India’s exclusion from the potential list.

Cross-country performance is a broader issue. Europe’s limited decline is a narrower question and economic decline is even more marked post-financial crisis and this isn’t about Iceland or Greece alone. In no futuristic projection is Europe’s relative economic drop contested. Individual reasons can be ascribed for the exits of Portugal,Italy,England,France and Croatia from the final eight. But there is a case that Europe is relatively declining in football too. Other countries are catching up,even if league football is still Europe-centric.

Is FIFA catching up? We know it isn’t catching up in use of technology. Since 1998,there have been 32 final spots. Other than the host country slot,Europe’s share in these 32 has only declined from 14 in 1998 to 13 in 2010. Africa remains at 5. Asia has increased from 3.5 to 4.5. North,Central America and Caribbean has increased from 3 to 3.5 and South America remains at 4.5. This is disproportionately out of line with what we have seen in 2010 and what we are likely to witness in the future. The continental quota is itself subject to question. Even if continental quotas are accepted,the allocation of slots is unrealistic. Ostensibly,these are progressively adjusted over time,to reflect playing strengths of member associations. However,past World Cup performances and the results of continental championships are not factored into this re-evaluation and there are inordinate time-lags. Ad revenues are still Europe-centric and Europe is reluctant to let go of FIFA,just as it is reluctant to let go of the IMF.

Perhaps Spain will lose to Paraguay and we will have a Chinese as managing director of the IMF.

The writer is a Delhi-based economist

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