The World Cup 2014: Has Brazil lost before its team has even set foot on the pitch?

By André Oliveira for OFFNews.bg
@andreufmg

BELO HORIZONTE, BRAZIL - When, in 2007, Brazil won the right to stage the 2014 World Cup, many Brazilians supported the idea of hosting the mega event. In that year, though, the rate of economic growth was higher and the feeling of well-being was increased by the political promises of wider investment in infrastructure until the beginning of the tournament. Many projects, however, are not yet completed and will not materialise until the kick-off of the first game, which will happen on the 12th June, in São Paulo.

With just one week to go until the World Cup, spending on the reform and construction of new venues has reached an incredible amount of 8 billion reais (3.5 billion US dollars), according to state government data. This sum is almost four times higher than the initially-foreseen amount. A recent KPMG study, published in the newspaper ‘O Estado de São Paulo’, states that Brazil houses, today, 10 of the 20 most-expensive stadiums in the world. The country has spent, considering the previous World Cups – measured by the cost of a seat –, more on its stadiums than each of the 2 past host countries: South Africa (2010) and Germany (2006). But how can this be and why?

Alleged corruption and overpricing in the construction of stadiums are frequently reported by local media. Such complaints, although investigated by state and federal courts, are threatened by one single important fact: many of the companies responsible for the works have contributed and continue to contribute to the campaigns of political parties in Brazil. And, as well as this, the Ministers of the Federal Court of Auditors are chosen by the President of the Republic and by the National Congress.

The situation worsens when we think about the probable ‘white elephants’, which are due to arise after the World Cup has taken place. Out of the 12 stadiums constructed in the 12 host-cities, 4 of them are located in regions without any football tradition. The National Stadium of Brasilia, with a capacity of 72 thousand people, and with an estimate value of 1.9 billion reais (830 million US dollars; triple the initially-foreseen amount), is situated in a city without any teams in the first division of the Brazilian Football Championship. Those who defend the majestic arena - which was inaugurated in 2013 - describe the numerous shows and events within the last year as a ‘great success’. Well, the arena did have an operating profit of 1.371 million reais (nearly USD 600,000; according to government sources) in its first year of operation and, at this rate, it will take exactly 1,385 years to recover the cost of building it – without contemplating inflation and various other economic factors during that period.

If spending on the reforms and constructions of the new stadiums – many of which are of doubtful use – reaches the 8 billion reais mark, investments in the urban transport system will reach approximately 8.1 billion reais. These numbers are, also, impressive, but they are lower if we reflect on the chaos of traffic in large Brazilian cities. Many of the promised public-works bonanza on the transport system did not materialise or have been delayed. These faults and failures have been causing unrest among Brazilian citizens and have resulted in protests: ‘why invest billions in luxurious and overpriced stadiums, if we do not have a quality public transport service nor a proper health or education system?’ More criticism comes when we consider that the greatest part of the investment in stadiums is financed by state-owned banks (with low interest rates) and direct investment from both the state and local governments.

In 2013, during the Confederations Cup, thousands of Brazilian citizens took to the streets to complain about the high spending required for the sport events. The State Government, meanwhile, defends itself with numbers. The cost, in total, to host the 2014 World Cup is around 11.3 billion US dollars or 25.8 billion reais (from which R$ 8 billion has been spent on stadiums; R$ 8.1 billion on urban transport system developments and R$ 6.3 billion on airports, on top of investments in safety and telecommunications). Annual public spending on education is around R$ 280 billion (10.9 times the cost of the Cup), and annual public spending on health works out at R$ 206 billion (7.3 times the cost of the Cup). Therefore, the budget for the event, according to the Federal Government, is less than usual expenses. As well as this, they did not cut the funds of prior public services. Moreover, according to some financial experts, the World Cup will stir-up the economy by creating new jobs and stimulating tourism – although the latter can and will only be verified after the end of the tournament.

Of course, the arguments of the Federal Government are reasonable. However, the country has lost the huge chance of revolutionising the infrastructure of its largest cities and showing, to the international community, a prepared and more-modern nation. Yes, Brazil has lost the World Cup before it has even taken to the field. Nevertheless, people do not just want panis et circenses. A new Brazilian middle class wants and demands even more, especially considering the large amount of taxes paid by them for the country. Brazilians created a state of critical awareness and are displaying, to all over the world, that there is something wrong with high public spending on major events. This is the legacy of the Cup. Yes, Brazil has won!

Brasília National Stadium, Brasília, Brazil, Photo by: Portal da Copa/ME

The author, ANDRÉ PINTO DE SOUZA OLIVEIRA, 28, Brazil, graduate of the Federal University of Minas Gerais (UFMG) is lawyer, instructor and specialist in Environmental and Constitutional Law through the University of Lisbon (Portugal)
(translated from the Portuguese by Ben West)

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