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Olympics: 2016 Gold for Rio de Janeiro?

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The Olympic Games will boost Rio de Janeiro's economy and infrastructure, most experts say.

BY LATIN AMERICA ADVISOR
Inter-American Dialogue 

The International Olympic Committee on Oct. 2 selected Rio de Janeiro over Madrid, Chicago and Tokyo to host the 2016 Olympic Games. Will the Olympics bring long-term economic benefits to Rio? What industries will get a boost? Will the city find a sustained use for the infrastructure the Games will require? Will Rio's struggle with high rates of violent crime deter would-be visitors from attending the Olympics?

Thomas Rideg, regional director of Global Intelligence Alliance Latin America in Sao Paulo: Brazil's economic, social and cultural outlook could not be more optimistic with the World Cup being hosted in 2014 and the Olympics in 2016. I can't think of a single industry that will not benefit from these events. If the socioeconomic developments that took place in more industrialized countries such as Spain when Barcelona hosted the Olympics were evident, just imagine the social and economic developments that will take place in an emerging giant such as Brazil. Regardless of the World Cup or Olympics, the country has survived the global crisis more successfully than most other nations as a result of its growing internal market. Over the last six years, more than 30 million citizens migrated from 'poverty' to the 'consumer' class, providing the country with somewhat of a cushion (by no means an isolation) to external turbulence, which has fueled confidence to grow. Now, with the outlook of the World Cup and the Olympics, the consumer and investor confidence will increase threefold and further social improvements will follow naturally. The government is taking strong measures to reduce crime in Rio. The Olympics' organizers, governments and NGOs must also work on making the population feel that they are part of the Games, and not an isolated and less-fortunate class watching everything happen from the outside. Making the masses feel involved in the organization and execution of the Olympics will make the population feel valued and respected, and respect will be provided in return. The safety concerns of the Rio Olympics will be further protected and therefore reduced by the World Cup that will take place two years earlier. To the average Brazilian, the World Cup is a bigger event than the Olympics and the measures to make the World Cup successful and safe will pave the way nicely to make the Rio Olympics successful and safe. We also must not forget that Rio successfully hosted the Panamerican Games in 2007, overcoming infrastructure and safety concerns.

Alberto Murray Neto, senior partner at Paulo Roberto Murray Advogados in Sao Paulo and a former member of the Brazilian Olympic Committee: Granting the Olympic Games to Brazil is an act of extreme social insensitivity. Brazil lacks infrastructure. It is a country where people die waiting in hospital lines and starve to death, where millions of people live below the poverty line. Until we have a gold medal in health, education, transportation, food, basic sanitation and electricity; until we have a policy of sustainable development that drastically reduces pollution and deforestation; until sports are accessible to everyone, bringing the Olympic Games to Brazil is nothing more than a demagogical government action aligned with personal interests. To the Brazilian people, it's a slap in the face. To Brazilian athletes, it's a joke. While our Olympic stars that remain in Brazil live in poverty, leaders spend millions on an Olympic campaign that only hides Brazil's problems from foreign eyes. There is always the hypocritical argument, 'Let's hold the Olympic flag together and bring it to Brazil,' while trying to sweep under the rug the things that future investigations will eventually uncover. Take, for example, the 2007 Pan American Games in Rio. I challenge anyone to show me a single infrastructure project carried out of the ones included in the proposal. Where are the new roads to Barra da Tijuca? What about the new Metro lines? Was the beautiful Guanabara Bay cleaned up? What about the Rodrigo de Freitas Lake? Were the public hospitals renovated? The honest answer to all these questions is a resounding 'no.'

Joel H. Moser, partner at Fulbright & Jaworski in New York: Well-planned infrastructure development has, historically, been an effective driver of long-term economic growth, particularly for urban centers which already possess the critical mass of economic activity to benefit from these improvements. The key is to create infrastructure enhancements with long-term uses and not just short-term applications for the Games. A safe bet is transportation infrastructure including mass transit and airport facilities. Brazil has turned increasingly to the private sector to partner in the development of infrastructure such as in the recent expansion of Linha Quatro of Sao Paulo's Metro. These relationships, known as public-private partnerships, keep the private sector engaged with an asset over the long term and have proven to be effective tools in delivering infrastructure worldwide. Companies which are able to partner with government in this fashion will do well in the Olympic development effort. Construction firms will certainly be lead players but also global infrastructure developers and operators as well as global investors in this asset class. Global firms will be interested in assets supported by long-term government payments or core assets with virtual or actual monopolies such as urban rail. I am confident that the government will make sure that visitors are safe attending the games in all respects. The challenge will be to leverage a greater economic prosperity for the long term from this historic event. The lasting impact can and should be an improved basic urban infrastructure that benefits all residents. An interesting comparison may be the planning underway under the Sarkozy government in France for the reconfiguration of urban infrastructure to benefit outlying regions of Paris. Effective urban planning can yield benefits for generations.

Roberto Kauffmann, president of the State of Rio de Janeiro Civil Construction Industry Association: Will the Olympics bring long-term economic benefits to Rio? Yes, principally through an increase in tourism and an improvement in infrastructure. At first, civil construction will include building urban infrastructure, sports complexes and hotels, encompassing investments of 10 billion reais in the next five years based on a figure of 2 billion reais per year. This will create close to 100,000 jobs, with a secondary effect on the hotel industry and benefits for trade and industry in general. Without a doubt, Rio will see long-term benefits due to the training of specialized labor. There will be push on the public security side to reduce squatter communities and take care of those designated for cleanup.

Albert Fishlow, professor emeritus of international and public affairs at Columbia University: The selection of Rio adds another international endorsement to Brazil's rapidly elevating status. That symbolism has occurred elsewhere: Tokyo, Seoul, Barcelona and Beijing immediately come to mind. Substantial investment will be required, but there will be gains as well. Tourism will be attracted, and will continue at a higher rate. A greater popular assent to continuing trade openness may occur. No one need worry about violent crime; that did not happen in 1992 when the global warming meeting was held. I'm beginning to rethink my 2016 plans.

Republished with permission from the Inter-American Dialogue's daily Latin America Advisor newsletter. 

 

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