By Samantha Shapiro
It is not rare for countries to bend the truth a little or overestimate their capabilities in order to receive the coveted Olympic bid. Rio de Janeiro is no exception. In addition to promising that it would clean up its water, the city assured the International Olympic Committee that the Brazilian economy would be stable and fully prepared to fund the 2016 summer games. ESPN reports that the reality is quite the contrary, and “six months shy of the opening ceremony…recession begins, inflation rages in double digits and the Games budget has taken a significant hit.”[1] The “hit” mentioned here is really more of a punch; as of January 2016, the budget had reportedly grown to be 25% higher than Rio initially planned for (and just to put that number in perspective, 25% equates to more than $5.9 billion US dollars added to the enormous amount the city had already set out to spend).[2] As Business Insider’s Emmett Knowlton simply puts it, “in a country still grappling with a recent economic crisis, spending public money on a two-week event is certainly not ideal.”[3]
Infrastructure is a huge economic problem for Rio, with some analysts reporting that these issues are even worse for this year’s Olympics than they have ever been for other host cities in past years. According to News AU, “Many of the 14 venues being built are also nowhere near completion, with some resembling building sites and empty quarries.”[4] If and when these structures are finished, they will likely go to waste. Once the Olympics are over, citizens of Rio and Brazil in general will not need the massive stadiums that cost an unfathomable amount of money to build. Considering the Brazilian government is spending so much money on the summer games instead of structures that residents would actually benefit from in the long term, it really is no surprise that Brazil places in 120th place (out of only 144 countries) on The World Economics Forum’s rankings for global scale of infrastructure.[5]
The idea that the huge amount of money spent on Olympic stadiums (and World Cup stadiums a few years ago) would pay off in the form of increased tourism to Brazil has also proven to be unfounded. In an article written for Bloomberg in January 2015, Raymond Colitt reflected on the aftermath of the Rio World Cup, stating: “The flow of tourists to the country, which spent more to host the mega-event than any nation before it, has remained flat from a year earlier since the final match on July 13.”[6] While the $11 billion spent on the World Cup in 2014 “was supposed to increase the nation’s visibility and consolidate an image of ‘happiness and receptivity’ to boost its tourist potential,” Collit asserts that “there is no sign of that happening.”[7] While no one can say for sure why the tourism plan has yet to take hold, hypotheses range from Rio’s high costs compared to other travel destinations to the city’s alarming crime rates (there are apparently more than three murders committed a day in Rio; British sailing Olympians Hannah Mills and Saskia Clark can attest after being robbed at knifepoint after training in Guanabara Bay in early 2015[8]). Brazil is also experiencing significant inflation, with the currency weakening 23% in the last few years, bringing it to a ratio of 2.642 to the United States dollar.[9]
Perhaps one of the most serious economic issues that hosting the World Cup and the Olympics has caused is the socioeconomic disparities that these events exacerbate. The Olympics will continue to put strain on the already-suffering residents of Rio’s favelas, which are the slums that line the outskirts of the city. Analysts project that by the time of the opening ceremony in August, about 8,000 of the families living in these favelas will be displaced “to accommodate new construction projects” associated with the games.[10] Such displacement is devastating for these citizens who are already economically disadvantaged and yet still cannot reap the benefits of their city’s tremendous – and expensive – project; in order for new stadiums to spring up, individuals are kicked out of their homes only to “feel totally excluded” from experiencing the supposed magic of the Olympics.[11] One of these favela-dwellers, Jane Nascimento de Oliveira, laments that “the stress has made me sick.”[12] Evidently, Rio’s more wealthy residents and government officials hope to economically benefit from putting on the massive show of the Olympics even though “homeless and poor people are routinely swept aside.”[13]
Destroyed houses in Vila Autodromo favela, right next to the construction site of the Olympic Park for the Rio 2016 Olympic games (Source: YASUYOSHI CHIBA/AFP/Getty Images)
A big slap in the face to the government in Rio has been the fact that the Olympics seem to not even be of interest to Brazilians. While the Olympic committee is apparently leaning on domestic ticket sales to make up 17% of its humungous budget, less than 50% of domestic tickets had been sold as of December 31, 2015.[14] This highlights an ongoing reality in Brazil: “Brazilians are growing increasingly fed up with the Games.”[15] Brazilians’ lack of attendance will cause Rio to rely more heavily on international ticket sales, which, as is evident from the ongoing health hazards and economic concerns mentioned above, is risky to say the least.
Protestors hold a banner asking “Olympics for whom?” at an anti-Olympics rally in Rio in August 2015 (Source: TASSO MARCELO/AFP/Getty Images)
Inverse’s Ben Guarino argues that this economic mayhem has less to do with Rio specifically and more to do with the fact that the city is a tropical, developing region. He asserts that “economically, for a developing country to host the Olympics is a fool’s errand” because host cities “require billions and billions of dollars of investment in transportation, communications, and sport infrastructure. It just doesn’t pay off.”[12] Whether the problems facing Rio heading into the summer Olympics have to do with Rio specifically or not is up for debate, but the fact that the city must deal with serious economic issues is not. Only time will tell if Rio 2016 will answer the city’s hopes and dreams to boost tourism or if the games will just further hinder economic progress.
Links
Why Rio? Road to the 2016 Olympics
Notes
[1] Bonnie Ford, “The Promise Rio Couldn’t Keep,” ESPN, February 18, 2016, http://espn.go.com/espn/feature/story/_/id/14791849/trash-contamination-continue-pollute-olympic-training-competition-sites-rio-de-janeiro.
[2] Emmett Knowlton, “The Rio Olympics are a mess 7 months before the opening ceremony,” Business Insider, January 12, 2016, http://www.businessinsider.com/laundry-list-of-problems-facing-rio-just-seven-months-before-olympics-2016-1.
[3] Ibid.
[4] James Matthey, “Rio de Janeiro is facing a monumental task to be ready for the 2016 Olympics,” News.com.au, August 12, 2015, http://www.news.com.au/sport/olympics/rio-de-janeiro-is-facing-a-monumental-task-to-be-ready-for-the-2016-olympics/news-story/08b645f2bc6ecbad66554af8920777ac.
[5] Ben Guarino, “Zika Virus Isn’t the Problem With the Rio Olympics.”
[6] Raymond Colitt, “Rio Olympics No Help to Brazil Economy Based on World Cup,” Bloomberg, January 15, 2015, http://www.bloomberg.com/news/articles/2015-01-16/rio-olympics-no-help-to-brazil-economy-based-on-world-cup-result. .
[7] Ibid.
[8] James Matthey, “Rio de Janeiro is facing a monumental task to be ready for the 2016 Olympics.”
[9] Raymond Colitt, “Rio Olympics No Help to Brazil Economy Based on World Cup.”
[10] James Matthey, “Rio de Janeiro is facing a monumental task to be ready for the 2016 Olympics.”
[11] Ibid.
[12] Ibid.
[13] Bonnie Ford, “The Promise Rio Couldn’t Keep.”
[14] Emmett Knowlton, “The Rio Olympics are a mess 7 months before the opening ceremony.”
[15] Ibid.
How to cite this article: “Is Rio Ready?” Written by Carrie Mittl and Sam Shapiro, Olympic Football 2016 Guide, Soccer Politics Blog, Duke University, http://sites.duke.edu/wcwp/tournament-guides/olympic-football-2016-guide/is-rio-ready/economic-concerns-rio/, (accessed on (date)).
