Olympic Games a silver lining for Brazil after World Cup humiliation

Trust finance hard-heads to find some good in Brazil's failure to win the World Cup, or even reach the final (on Monday Hong Kong time). The traumatic shock to the national psyche of this unthinkable eventuality, so the argument goes, will damage the re-election chances in October of President Dilma Rousseff, whose policies are blamed for stagflation that is weighing on the rise of a new economic power. That would be good for the stock market. The obverse side of this theory is that since soccer is one of the things that make Brazilians feel good about themselves, the humiliating 7-1 semi-final loss to Germany will do nothing for consumer and investor confidence.

Meanwhile, there is no argument about this being a black weekend in the land of samba and soccer. When the World Cup was last held in Brazil, in 1950, the host nation at least reached the final before losing 2-1 to Uruguay in the deciding match. Tomorrow morning (Hong Kong time) a nation that has won the World Cup five times will rain tears on its own party when it endures the ultimate futility of playing the Netherlands to determine who finishes third in the tournament. Who cares? Certainly not the thousands who took to the streets to protest against the splurging of more than US$11 billion on the World Cup, in a nation where more than seven million live on US$1.25 or less a day, as construction of new stadiums was put ahead of schools, hospitals and roads. Most economists agree that the benefits of increased tourism and related consumer spending will not be sustained in the long run, despite claims of a US$90 billion injection into the economy over 10 years. After all, the estimated 15-year economic impact of the 2006 World Cup in Germany is under US$5 billion.

Brazil's defeat has led to reports of national despair and violent recrimination. It seems futile to lecture Brazilians that soccer isn't everything. But they can at least contemplate the possibility of salvaging some national pride when they host South America's first Olympic Games in Rio de Janeiro in 2016.