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Brazil's World Cup Dreams


Brazil, the largest economy in Latin America is going to host the FIFA World Cup in a few days time. Despite hosting such a massive event, lots of Brazilians took to the street, protesting against the hosting of the event. All these protests actually started a year ago when Brazil hosted the 2013 FIFA Confederations Cup, a warm-up event for the host country of the World Cup. These protests were primary against the high corruption in the government, high cost of living, and the increase in bus, metro, and train fare in major cities across the country. Brazil, one of the G-20 major economies which is known for the huge income disparities between the rich and poor recorded the second highest Gini Coefficient among all the major G-20 economies at 54.69. [1] (Highest being South Africa at 63.14). Gini Coefficient is a measurement of national income equality and distribution in the country.

The Brazilian government obviously is facing a tough time hosting both the World Cup and the 2016 Olympics in such a short time. BBC reported that the Brazilian economy slowdown ahead of this year’s World Cup. [2] The country’s economy grew only 0.2% during the first three months of 2014. Business investment were also down 2.1% in the three months. With Brazil’s recorded record-high inflation rate at 6% in April together with low business investment, it seems like massive government spendings on projects like upgrading airports, building new stadiums failed to spur the Brazilian economy as the government have predicted.

Brazil spent an estimated total of $11.3 billion on this year’s World Cup, a third of this figure went to stadiums building or renovation in various host cities. [3] There are also lots of non-stadium projects that is facing difficulty to be ready when the World Cup starts. Only half of the projects managed to reach it’s intended completion date, while the other half of the projects were dropped as it failed to be ready before the World Cup.

The Sao Paolo stadium which will host the opening game barely makes it and will not be able to host a test match before the tournament kicks off. Completion of airports upgrade projects in Sao Paolo, Rio de Janeiro, and Brasilia are too late and will not be ready in time. For the transportation projects, only 23 of the 45 stations of Rio’s rapid bus system will only operate when the World Cup begin. For the city of Recife, things are even worse as 3 of the 45 stations will only be in operation. The project of building Latin America’s first high-speed bullet train from Sao Paulo to Rio de Janeiro never even took place. Fans will have a tough time travelling to games as only a third of these transportation projects are ready. One solution to that is to declare public holidays on game day to reduce the congestions in various hosting cities. [4]

Four cities that have a new stadium built: Manaus, Natal, Cuiaba, and Brazil’s capital - Brasilia, doesn’t have top-tier football teams in these cities. This means that all these newly built stadiums are likely to be white elephants once Brazil are done with the World Cup. Not to mention that lots of these stadiums projects have massive increase in the cost of building. All 12 stadiums hosting all 64 matches are likely to be ready just in time when the tournament kicks off on June 12.

It seems like having the stadiums ready might not the biggest problem the Brazilian government is facing. A more daunting task on restructuring the country’s economy and absorbing the benefits of staging a world event is definitely a much bigger issue that the Brazilian government. With the 2016 Olympic Games exactly two years from now, it’s perhaps the time to go back to the drawing board to get everything back on track in time for another big event.


By,
Zhe Xu
8th June 2014

Links:
[1] http://www.quandl.com/demography/gini-index-by-country
[2] http://www.bbc.com/news/business-27643472
[3] http://uk.reuters.com/article/2014/06/05/uk-brazil-worldcup-infrastructure-idUKKBN0EG24F20140605
[4] http://www.chicagotribune.com/news/sns-rt-us-brazil-worldcup-infrastructure-factbox-20140605,0,2319112.story

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