Brazil and the Olympics
Olympics Unlikely to Boost Tourism or Improve Infrastructure
Primary Article Contributors
Matt Wilson
Edited By
Omar Mashnuk – Team Leader
With the announcement that Brazil would be hosting the 2014 FIFA World Cup and the 2016 Olympics, many saw these events as Brazil’s opportunity to present itself to the world as a growing nation. With promises of infrastructure investments and increased tourism, many were optimistic that the World Cup and the Olympics would boost Brazil's economy and global presence.
With the World Cup now over, outlooks for improved tourism and infrastructure have become more pessimistic. Studies following the World Cup showed that Brazil failed to increase the inflow of tourists from a year earlier, a worrying sign for Brazil as many hoped the Olympics would help increase tourism over a long period of time. These failures to increase tourism have also hurt foreign investment and confidence in Brazil. InterContinental had planned to triple the number of hotels in Brazil. However, these plans were predicated on tourism increasing following the World Cup. The failure of the World Cup to attract long-term tourism will act as a deterrent to other firms considering investing in Brazilian tourism for the Olympics.
Even more alarming is the success of former World Cup hosts to increase tourism, fueling speculation that economic factors such as taxes, violence and poorly funded tourism agencies are holding back Brazils chances for economic growth. South Africa, which hosted the World Cup in 2010, also had issues leading into the World Cup, yet still managed to increase tourism by 7.4% for the three years following the World Cup.
Another major promise of the World Cup and Olympics were the planned investments in transportation infrastructure that would benefit Brazil long after the Olympics have finished. However, the expansion of the Rio de Janeiro metro system has been marred by delays and will not open until months before the Olympics. Another project which has face massive setbacks is the clean up of Guanabara Bay, the location of Olympic sailing events. Currently riddled with sewage, hospital waste, electronics and tires, the Brazilian government has take steps to increase water treatment, but a report from a university in Rio declared the original cleanup goals would not be met until 10 years after the Olympics.
Another flagship social initiative was Morar Carioca, a favela upgrades program, part of a larger plan to improve all low-income housing by 2020. However, those involved in the plan have stated the plan has effectively been cancelled, following the cancelling of contracts rewarded to architectural firms with little explanation. The failures of these infrastructure investments could lead to instability caused by public outrage similar to those seen prior to the World Cup and could act as a deterrent to companies planning on investing in the area. As well, the failure of plans such as Morar Carioca will hold back Brazilian economic growth, as social issues caused by poor low-income housing in favelas such as crime and drug activity will continue to negatively impact Brazil in the future.
