One month has passed since the international event that drew the world’s eyes to one country—Brazil. The World Cup came and went, and with the disappointing performance of Brazil in the semi-finals, the country has seemingly little to celebrate as the tourism funds fail to revive Brazil‘s economy.
The ruling power of Brazil shifts based on economic performance under the party, and with elections coming soon, current president Dilma Rousseff is facing the frustration of the nation. The failure of the Worker’s Party combined with economic distress and slumping growth could potentially mean the end to her party’s 12 year reign in office.
Rousseff’s voter tactics are far from complex: she’s simply begun throwing money at those who show signs of loyalty to her, such as the northern region of the country that benefits hugely from social welfare. Mixed reviews of such behavior are shown in CEO of DMS Funds Peter Kohli’s statement to Forbes: “During the last few months, Rousseff has been handing out cash to the poor in a blatant attempt to buy votes.”
This last-ditch effort to retain voters shows the financial promise many thought the World Cup would bring has fallen through, leaving the government with little left to show for themselves. The Wall Street Journal reports that the expectations for Brazil’s gross domestic product have suffered massive reductions: “[Economist] Mr. Salomon now projects the nation’s economy will expand just 0.7 percent, down from 1.7 percent.”
Already behind schedule for their next international hosting event, the 2016 Summer Olympics, it’s unclear whether Brazil will see the same luck with finishing production in the nick of time. For the World Cup, stadiums were unfinished as teams began arriving in Brazil, and with many speculating at the enormity of the Olympics, the sights are set high for the presentation Brazil offers.
Rousseff is facing a difficult crowd to win her next term, after being booed by thousands in the opening ceremony for the World Cup. She also faces scrutiny for her policies surrounding heavy government presence and intervention in the oil industries, partly contributing to the economic slow down seen in the lowered gross domestic product.
The vote is split so severely that when President Rouseff suffers a drop in the polls, the stock market rises. This is heavily denied by the Finance Ministry, but the numbers have continually proved otherwise.
Brazil did not expect a negative economic impact from the World Cup, but that is the direction they are heading in. In defense of the outlook for the Summer Olympics, Brazil successfully quelled the prospective riots that could have injured or frightened tourists, along with few major hitches during the actual event.
There is a possibility that Brazil will be able to turn it around in order to economically benefit from the Olympics. Time will tell as the next presidency is determined and reforms are in the making.
– Elena Lopez