Malaysia has been offered the opportunity to host the 2026 Commonwealth Games.
While the economic spillover of hosting multisport games cannot be discounted, any possible revenue derived from the Commonwealth Games will do little to aid the Southeast Asian nation in settling its more than RM1 trillion national debt.
Last October, the Finance Ministry, in its Fiscal Outlook and Federal Government Revenue Estimates Report, said that Malaysia’s debt is projected to be around 64 per cent of the nation’s gross domestic product (GDP) as at the end of this year, only one per cent away from the 65 per cent statutory debt limit.
At 64 per cent of the GDP, the national debt is estimated to be RM1.263 trillion, higher than the RM1.147 trillion in 2023.
The Australian city of Victoria, which won the bid to host the 2026 edition two years ago, turned its back on the event in July 2023, citing that the Games’ budget had skyrocketed to almost A$7 billion (RM21.69 billion) – double the anticipated economic benefits.
Victoria’s former premier, Daniel Andrews, said the state would pay an A$380 million (RM1.17 billion) penalty to the Commonwealth Games Federation (CGF) for withdrawing as host.
After days of speculation, the Olympic Council of Malaysia this morning revealed that the Commonwealth Games Federation had offered Malaysia the opportunity to replace Victoria as host for the 2026 Games.
“The offer includes a significant financial investment of £100 million (RM602 million) to support the local delivery and legacy planning of the 2026 edition,” OCM said in its statement.
New Commonwealth Games Federation president Chris Jenkins was quoted on March 6 as saying: “We’re talking in real detail to three or four potential hosts and I can’t say where they are because they all want confidentiality, but they all have good links into government.”
Given that Victoria will pay a penalty of A$380 million, or roughly £194 million, shouldn’t the new host of the 2026 Games get that amount to step in?
On the flip side, does it make economic sense to host the Games, given Victoria’s earlier estimate of an expenditure of A$7 billion?
How much would it cost Malaysia, and should we even consider hosting the Games for a second time?
The 1998 Games was a sporting success, but in 2004, then Youth and Sports minister, Datuk Seri Azalina Othman Said, announced that Sukom 98 Bhd had finally closed its accounts, posting a loss of RM11.6 million.
However, in 2010, Sukom 98 executive chairman Datuk Nik Mahmud Nik Yusuf revealed that the company couldn’t close the accounts as they had pending court cases and required more time to settle its debts.
The same was seen when Kuala Lumpur hosted the 2017 SEA Games. Neither a detailed report, nor accounts have been made public to date, leaving taxpayers wondering how the money was spent.
Here are the pros and cons of Malaysia hosting the Commonwealth Games:
Pros
• Hosting the Commonwealth Games can inspire participation in sports.
• Platform to showcase the nation’s culture, heritage, and capabilities to a global audience.
• Boosting the local economy and creating economic opportunities via sport tourism, and infrastructure development.
• Strengthen diplomatic ties and cooperation between Malaysia and participating nations.
• A sense of civic pride and identity among the rakyat, fostering a positive community spirit and unity.
• With Malaysia set to host the 2027 SEA Games, refurbishments of existing venues, or the construction of new facilities for the Commonwealth Games can also benefit the Southeast Asian Games.
Cons
• Race against time as 2026 is barely two years away, leaving Malaysia with a narrow window of getting things organised and setting the tone for the Games. For the record, Malaysia will also host the 2027 SEA Games but has not revealed any details, including the possible venues, to date. The country will also be gearing up for the 16th General Election.
• The current economic climate and weakened ringgit will make hosting the Games an expensive affair. Plans to host such an event at this juncture may not go down well with the people who are already impacted by the higher cost of living.
• It remains unclear if the stakeholders have conducted detailed studies on the effects, economic returns, and potential opportunities, of holding multisport events in Malaysia. This raises the possibility of Malaysia repeating similar mistakes seen in past events.
• Despite organising several multisport Games over the decades, Malaysia does not have a ‘handbook’ in organising major sports events.
• The enormous expenses that will be incurred may result in long-term debt for the host. The economic returns may not always materialise – hence Victoria’s withdrawal.
• Money would be better spent on healthcare, education, or infrastructure projects with more tangible and long-lasting benefits for the rakyat.
Birmingham, which declared itself bankrupt a year after hosting the 2022 Commonwealth Games, should serve as a cautionary tale.
In fact, Birmingham City Council was told in 2017, to focus on its budgetary problems, as the city would not have the resources to put on a major international sporting event in 2022.
Max Caller – a former non-executive director of the council who was appointed by the government in 2019 to help solve its financial issues – told The Times last year that council chiefs were determined to host event, which the Labour leadership claimed would mark a “golden decade” for the city.
