The Effect of the Olympics on Brazil Abby Obando, Kevin Snyder and Edgar Hernandez

Brazil Economic Promise In 2009, Brazil was awarded the 2016 Olympics Around this time brazil had just become the 5th largest economy in the world Massive demand for commodities and the large mining revenue were a big contributing factor With the size of its vast resources in agriculture and mining sectors, Brazil could easily be considered a rising super power These factor contributed to brazil being considered a more then reasonable candidate to host the Olympics

Before They Began

Brazil’s Economy As of 2014 GDP: $2.246 Trillion USD Brazil’s GDP value represents 3.62% of the world economy Inflation : %5.9 GDP: $2245.67 billion US dollars Growth: %0.10 Brazil’s GDP value represents %3.62 of the world economy. Inflation: %5.9

Brazil's Recent GDP Variance Growing Concern over an inevitable recession and political conflict Negative Growth began at the end of 2014 Canceling out the progress that was being made in previous years That led to Brazil removing their president three months prior to the Olympic games Reports were that the city’s infrastructure and economy will not be able to handle the pressure

FIFA to Olympic Preparation From 2008-2014, Rio's tourism market grew from $1.26b to $2.10b due to the World Cup To be able to accommodate an estimated 400,000 tourists, drastic changes had to be made to the infrastructure of Rio  The bike paths collapsed which had a huge setback on the infrastructure expenses for the Olympic games as did the condition of the water in the Guanabara Bay which is hosting the sailing events There was thousands that needed to be relocated from their homes  In many cases, by force All of this caused Brazil to cut their initial budget ($5 billion) up to 20%

Causes and Results of a Weakening Economy Brazil is currently facing the worst recession in decades They have had a significant rise in unemployment Inflation has increased in the double digits Most importantly, there has been corruption that have produced a failing state's oil company and with government energy company Petrobras Rio’s state budget shows a $5.6 billion shortfall for 2016. Royalties from oil — the state’s main revenue-earner collapsed from $3.5b in 2014 to just $1b in 2015 These corruption scandals were made global during the preparation for the 2014 FIFA World Cup Transportation fees increased dramatically to support the construction for the stadiums and protests broke out

Expenses Vs Revenue London’s 1948 Olympics cost about £20m($ 30m). Beijing 2008 was reckoned to have cost about $40b The city is using public private sector partnerships (PPP) to finance Rio’s facilities The Brazilian government planned to transfer 2.9 billion reais ($849m) in emergency funds to the state of Rio de Janeiro to pay for infrastructure and security during the Olympic Games Olympic sponsors also did not pay taxes in Brazil for advertisements throughout the marketing campaign 

Expenses Vs Revenue cont. Sponsorships for the Olympic games bring in well over $2b, roughly 90% of that is split among the 204 NIOCs The remaining 10% is kept within the IOC for operational and administrative costs TV broadcasting is the highest channel for revenue contributing to 70% of Rio's $4.1b budgeting expense NOCs contribute 20% of total revenues being generated WW Marketing and sponsorship was estimated at $900m and $1.3m for domestic sponsorship $300m will be generated from marketing and licensing and $250m generate from other sources 

Brazil's Current State Brazil’s battered economy is slowly heading towards a recovery Monthly data suggest that the recession continued to abate in Q3 of the fiscal year, although data remains poor Industrial production rebounded in September and the current account deficit moderated, but retail sales continued to fall in August  While the progress is promising and points to a stabilization of the political environment, the political scene remains complicated In October, former house speaker Eduardo Cunha was arrested over corruption charges

Solutions that could have benefited Brazil IOC Country Reassessment Policy- Would be considered with any signs of distress in the country  A year prior to the Olympic games, they would have a back-up country that could take over  A country that would have a stable economy and infrastructure, with capabilities to prepare within a year This could work as motivation to the Initially intended hosting country to make sure they do what they need to maintain their hosting duties IOC Reserve Funds- Emergency Relief  The IOC would house the Reserve along with the WTB, helping with infrastructure and safety concerns The reserve would be accumulated from the 204 NOC nations, and payed back from the hosting country in what they would usually receive from future Olympics 

Class Discussion-Vote and Tell Us Why Does the Olympic committee deserve the full blame for Brazil’s struggle, before and after the Olympics? Does Brazil deserve the blame? Will this continue to happen to future Olympic hosting countries?

Sources http://www.worldfinance.com/infrastructure-investment/rio-olympics-2016-economic-gain-or-loss http://www.bloomberg.com/news/articles/2016-05-16/rio-olympics-won-t-help-brazil-s-economy-much-moody-s-says http://www.forbes.com/sites/timworstall/2016/06/18/hosting-olympics-bankrupts-another-place-rio-de-janeiro-declares-financial-disaster/#56381ae06f93 http://www.theglobalist.com/brazil-the-economics-of-the-rio-olympics/ https://www.youtube.com/watch?v=boc0xGnwCWc https://business-humanrights.org/en/major-sporting-events/brazil-2016-rio-olympic-games-and-2014-world-cup http://www.bbc.com/mundo/noticias-37085451?utm_source=newsletter&utm_medium=email&utm_campaign=the_tjn_weekly_friday_19_august_2016