Brazil struggles to avoid World Cup, Olympics defeat
Questions are raised about whether the World Cup and the Olympic Games will leave a lasting legacy or whether some facilities will turn into white elephants
Brazil's World Cup starts in just over 10 months, and the three-year countdown for the Rio de Janeiro Olympics is starting to roll.
This should be a great moment for Brazil and for Rio, the city at the centre of the festivities. Yet fierce protests at the Confederations Cup in June, a warm-up for the World Cup, and a chaotic visit to Rio last month by Pope Francis have some questioning if Brazil - and a city largely known for beach life and samba - can buckle down and pull off sports' two mega-events.
Rio's main newspaper, O Globo, raised the issue in an editorial during the pope's visit, which was plagued by massive traffic jams, power outages and an overloaded subway system. The week kicked off when the pontiff's motorcade made a wrong turn, his car was swarmed by thousands of faithful and security agents were left chasing him helplessly.
"Errors with the pope's arrival and the breakdown of the subway ... reinforce suspicions about the country's ability to be a good host," the newspaper said.
Rio Mayor Eduardo Paes termed the organisation for the pope's visit "closer to zero than 10", though he offered a higher grade as the pope departed.
The country is spending about US$13.3 billion of largely public money for the World Cup. The flashpoint for protesters has been 12 new or remodelled stadiums, four of which seem sure to become unused white elephants. Fifa, football's world governing body, required only eight stadiums.
Olympics organisers have yet to announce their budgets, but public spending could be similar to the soccer tournament - or higher.
Leo Gryner, chief operating officer of the Rio organising committee, said he expects the capital budget - a mix of public and private money aimed at building supporting infrastructure for the Olympics - could be 35 per cent above the US$11.6 billion listed in the original bid.
He said the growth was partly due to inflation and the value of the Brazilian currency. In addition, the original bid did not include a US$4 billion extension of Rio's subway system, he said.
Gryner said the Summer Games budget was expected to grow from US$2.8 billion to as much as US$4 billion. This is the budget to run the games themselves, money coming from sponsors, ticket sales and merchandising.
On Friday, Gryner said US$700 million in public money may be needed to balance the operating budget. He said any shortfall comes from inflation, Brazil's slowing economy and the ability to sell local sponsorship - a key source of revenue.
"Right now as our budget stands we need this US$700 million," he said.
Both the capital and operating budgets are expected to be announced later this year, with early estimates typically growing as the games approach.
Aware of Fifa's image problem, Gryner promised "no white elephants" for the Rio games. He said about 50 per cent of the venues were older structures being remodelled, and the other half was split evenly between temporary structures and new, permanent edifices .
Just days after the Confederations Cup ended, IOC President Jacques Rogge said the Olympics would have a role in spurring long-term infrastructure for Rio. The pope did his bit to help, blessing the Olympic and Paralympic flags with holy water - as well as visiting slums in a move that highlighted the disparity between the country's rich and poor.
"We'll have to explain very clearly to all the public that the investments made for the Olympic Games [are] going to give a sustainable legacy for generations to come," Rogge said. "That is the message that we are sending and we'll be making very clearly in the future."
The games open on August 5, 2016 - followed by the Paralympic Games - and will be spread across four vast swathes of this beachfront city, which is cut up by green hills and spectacular soaring rock faces. Slicing through the natural beauty are narrow roads, a dozen tunnels and poor city planning.
The core of the games will be in the Barra area, located in the south and kilometres away from the city's famous Ipanema and Copacabana beaches. The other areas will include the Deodoro Olympic Park in the north, Rio's Maracana stadium near the city centre, and the Copacabana area.
Soccer will be played in Rio, Sao Paulo, Brasilia, Belo Horizonte and Salvador.
Rio organisers hope to use the games to upgrade some of the city's transportation infrastructure. The three biggest projects are a 16-kilometre extension of the city's subway system, adding four high-speed bus lanes, and renovating a decaying port.
IOC officials have been concerned about the pace of preparations, but the situation has not reached the extent of the problems for the 2004 Olympics in Athens, which led then IOC President Juan Antonio Samaranch to issue his "yellow card" warning to Greek organisers.
Gryner acknowledged organisers got a "six to eight month" late start on building.
"Things that happened last year produced this perception," he said. "One thing was the delay in the start of the golf course ... Now we are on track and moving on. Up until last year, when the infrastructure work started, people were having the feeling that we are not moving."
He said the goal was to have venues ready by the end of 2015.
Local organisers have had to fend off criticism they are running behind in landing local sponsors. Missing those targets could force the government to step in and make up the shortfall.
"With three years to go we are well positioned and are fully confident of fulfilling our revenue plans," local organisers said in a statement.
IOC presidential candidate Richard Carrion, a member of the co-ordination commission for Rio, has hinted things must move quicker. So has former Olympic gold-medal swimmer Alex Popov, also a member of the commission.
"There are games that are better prepared and games that give us a little more trouble," Carrion said. "It's something we will have to be on top of. I know the president [Rogge] has also made them aware. We've seen these type of situations in the past. It requires constant monitoring."
The IOC co-ordinating commission visits Rio on September 1-2. Gryner pledges good news.
"We have the exact starting date for every venue, and finishing dates for every venue," he said. "We can say exactly where we are … I think Popov will be very happy when he leaves here."
Gryner said Brazilians support both mega-events, but question where the money is going in a country with high taxes, a slumping economy and poor schools and hospitals.
These contrasts were the focus of street battles during the Confederations Cup when police and soldiers used tear gas, shock grenades and rubber bullets to break up almost daily demonstrations. Tear gas wafted through the Maracana stadium during the tournament final between Spain and Brazil, with police just a few hundred metres away to keep protesters from circling the stadium. There were no deaths in this protest, though several fatalities were reported in earlier demonstrations.
Protests have accompanied major athletic events before and on a key point, sports economists generally agree with the demonstrators: monster events like the Olympics and World Cup do little in the short term to boost tourism or the economy. With good planning, they may help long-term infrastructure.
The '92 Barcelona Olympics are viewed as the most successful, putting a largely unknown city on the map, and also upgrading the city's roads, parks and port.
The 2008 Beijing Olympics left behind several new subway lines and a magnificent airport. But the Bird's Nest stadium, the centrepiece of the games, stands neglected as a US$500 million souvenir. In Athens, many of the venues from the 2004 Olympics are desolate and infested with weeds.
"Barcelona as a city was a gem that had not been discovered fully," said Andrew Zimbalist, a sports economist at Smith College in Northampton, Massachusetts. "Unless you are in a situation like that with really intelligent political management, it's very hard to convert these games into something that's positive economically."
While Beijing put on a spectacle, it was mostly for an all-China crowd. A 2010 report by the European Tour Operators Association showed the 2008 Olympics diminished tourism in China's capital, calling it a "toxic event".
"Business and construction companies get something big out of it, and politicians get something big out of it," said Victor Matheson, a sports economist at the College of the Holy Cross in Worcester, Massachusetts. "They figure the losses to the taxpayers are small enough and spread out enough that none of them is going to complain too much."
Wolfgang Maenning, a sports economist at the University of Hamburg, said it's a mistake to think about mega events as profit makers. They aren't, at least not for governments.
He said Germany's pay-off for holding the 2006 World Cup was the intangible "feel-good factor," lifting civic pride and boosting a nation's diplomatic "soft power."
"If you are organising a Christmas party, it will cost you money," said Maenning, who won a gold medal in rowing for West Germany in the 1988 Olympics.
"Here in Germany, everyone would say the 2006 World Cup was a good thing.
"You don't have to convince anyone here that you don't earn money by organising the World Cup. But we had a lot of fun with it. But was it worth it, and what price? This is another question."