Brazil Looks Like Biggest Loser After World Cup

All eyes were turned on Brazil this summer when the nation played host to one of the most talked about international sports competitions—the 2014 FIFA World Cup. The football festivities lasted just over a month, starting from the official kickoff on June 12 and finishing with a riveting final match between Germany and Argentina on July 13. From the perspective of a spectator watching on television, the event certainly looked impressive, with several state-of-the-art stadiums, manicured fields and scores of distinguished officials.

However, the event was both preceded and accompanied by nationwide protests arguing against the egregious amount of money going into preparations for the event in a country with a significant amount of citizens living in poverty. The message of these uprisings may have been partially drowned out by football coverage, but it is critical that we not push their concerns aside.

Now that the final whistle has been blown, it is time to step back and look at an issue that is much bigger than football: what happens to Brazil when the world leaves Rio? Unfortunately, the World Cup’s legacy in the country looks dismal. Poor planning, overspending and politics prevented the event from benefitting a country in desperate need, leaving Brazil in no better shape than it was before preparations began.

In order to fully understand this issue, it is necessary to take a look at the state of affairs both economically and politically in Brazil in the years prior to the World Cup.

When World Cup Rio was announced in 2007, things were looking pretty good. Inflation was down, the currency was up and in many ways it looked as if the Brazilian economy was moving in the right direction. That was the argument former president Lula de Silva made when he lobbied for the event to be held in his country nearly a decade ago, a decision he hoped would help put Brazil on a path to becoming the next major world superpower.

Unfortunately, in 2014 the future isn’t looking quite so bright. At the beginning of 2014, Brazil’s economy was at the lowest it had been since the recession of 2008-2009 and the national gap between rich and poor remains one of the widest in the world.

The World Cup was supposed to help this struggling country by updating infrastructure and increasing tourism, but it failed on both fronts. The majority of the nearly $11 billion spent went toward building and refurbishing 12 stadiums around the region, many of which are unlikely to ever be used again to their full capacity. An example of this waste is the Arena Amazonia in Manaus, a remote region outside Rio which is home to a group of indigenous peoples. The arena cost nearly 300 million dollars to build, yet hosted only four World Cup games. Officials defended the decision, saying that the cost would be made up in revenue from future sporting events held there, but given the remoteness of the location and the area’s lack of a club football team, that assertion seems foolhardy at best. Arena Amazonia represents the worst of World Cup grandeur, and points to an important truth: too much of the spending in Rio was ill planned and wasteful, with lit- tle regard toward its effect on the country’s future.

The notion that increased tourism is going to magically repair the massive hole that the World Cup created in Brazil’s budget is simply false. Studies have shown that the expected increase in tourism to host countries during international sports competitions is a myth. In fact, the opposite appears to be true, with potential tourists being “pushed out” by higher prices and expected crowding. For a country like Brazil, whose politicians hoped to capitalize on the publicity the event would create, the pressure to build new stadiums and infrastructure was massive. Though FIFA only required eight stadiums for the event, Brazil built or refurbished 12, many from the ground up.

Granted, Brazil isn’t the only country that has fallen into this trap. South Korea, Japan and South Africa also pumped millions of dollars into the construction of World Cup stadiums, and they are feeling the pain too. Cape Town stadium, which hosted many games during the 2010 World Cup, remains largely unused except for occasional soccer matches, concerts and private events.

The story is old, but the magnitude of waste in Brazil is unsurpassed. Brazil has spent significantly more than any World Cup host since 1994, at just over $3.6 billion on stadiums alone. In addition to spending the most overall, Brazil’s construction cost per fan is through the roof—at $1,088 per fan visiting the stadiums over the next four years. Even South Africa, with the nearly empty stadium in Cape Town, only spent $718 per fan. Brazil is the latest and most extreme example of this chronic problem of overindulgent World Cup spending.

As a result of this massive stadium spending, projects with the potential to have more positive long term impacts on Brazil were delayed or abandoned. For instance, a high speed rail from Rio to Sao Paulo scheduled to be ready by the World Cup is not expected to be operable by 2020.

So where do we go from here? The mistakes in Brazil and other countries may already have been made, but that doesn’t mean that the World Cup has to continue to be synonymous with gross immoderation. The first step towards mediating this problem must be an ideological one. It must be understood that giving countries, particularly third world and developing ones, the rights to host these events will not miraculously fix deeply ingrained social and economic issues. Once that is accepted, FIFA must take more responsibility for its choices of host countries, taking into account of impacts of such events on local infrastructure. For FIFA to insist on many state of the art stadiums in its host countries and to allow countries to build new stadiums when older ones would suffice is not only impractical, it is immoral.

But at the end of the day, it is the host countries themselves that are responsible for their own economic welfare and image projection. This past summer, Brazil provided yet another example of political egotism getting in the way of sound, long term financial decisions. It might be too late already for Russia, who has already begun spending its $20 billion budget in preparation for World Cup 2018, on top of the $51 billion spent this winter at the most expensive Olympic games in history. However, only time will tell how Qatar (World Cup 2022) and future hosts will handle the spotlight. With no signs of stopping, it seems like this international trend towards overspending means that no matter the final score, host countries are likely to be the competitor with the greatest losses.