2016 Olympics: Brazil and Its Economy

Brazil will be the first South American country to host the Olympics for the 2016 Summer Olympics. Although Brazil has an emerging economy, the 2016 Olympics may do more harm than good as it relates to the economy and those living in poverty.

The theory is that hosting the 2016 Summer Olympics will cause a growth spurt in the economic development of Brazil with an influx of tourism and employment. However, Brazil also spent more than $11 billion on hosting the FIFA 2014 World Cup. The data from the World Cup shows that the costs of hosting such a big event may outweigh the benefits. The World Cup did little to boost the economy and the jump in tourism the government was anticipating was not as significant as expected.

The economy in Brazil is looking rather weak considering the fact that the country has $900 billion in foreign debt and economic activity is decreasing yearly by almost five percent.

The state of the economy coupled with the costly and grueling task of Olympic preparation seems to be rather dangerous. The budget for the Olympics was originally $2.93 billion but has risen to $13.2 billion since January 2014.

Although Mayor Eduardo Paes of Rio de Janeiro claims that 57 percent of the funding will be from private enterprise, the brunt of the consequences of the infrastructure projects will fall upon the shoulders of the Brazilian taxpayers.

Amid the excitement of the coming of the Olympic Games is the very real crisis of eviction that families are facing. The scarcity of land in Rio means that things have to be shifted around to accommodate the new infrastructure.

Thousands of families have been moved out of poor neighborhoods (called favelas) so the neighborhoods can be destroyed and then rebuilt as different Olympic structures. Approximately 3,000 families in Rio have been forced to relocate as a result of the Olympic projects.

An estimated 67,000 people have been evicted from their favelas since 2009 when Rio was chosen to host the Olympics. Those who fight against the eviction and refuse monetary compensation and alternate housing are met regularly with aggressive eviction attempts.

The price of land is quickly rising in anticipation of the Games. After the Games, the complexes will be converted to luxury condos for sale for up to $700,000.

The 2016 Summer Olympics will change the economy of Brazil and leave a lasting impact. Those who will feel the weight the most will be the voiceless poor.

Iona Brannon

Sources: Bloomberg Business, Business Insider, The Guardian, NPR, Reuters, Seven Pillars Institute, Washington Times
Photo: Brazil the Guide