Mega sports events in brazil; social and economic legacies

Mega Sports Events in Brazil; Social and Economic Legacies

This presentation is based on a series of articles published in

Revista News Brazil and Yeah! Brazil, May – August 2013

Sofia SundenIndependent Researcher

Brasília, 7th August 2013

Background

- Brazil is currently in a unique situation by preparing for two mega sport events; the Summer Olympic

Games 2016 and FIFA World Cup in 2014.

- Hosting mega sport events is believed to bring a number of (positive) social and economic legacies, such as

boost economic activity, provide a long term spirit of wellbeing among the citizens and enhance

political reputation.

- By evaluate the legacies of previous mega sport events it is noticeable that legacies can be both positive

and negative. Legacies from previous mega sport events include force evictions as well as improved

political reputation.

Research questions

– What are the potential social and economic legacies in Brazil hosting two mega sport events?

– Initial research question in 2012 - can the economic legacies from these mega sport events be used to create a positive social legacy, such as further poverty reduction and reduced inequality in Brazil?

Legacy and Motivation

Motivations for countries whishing to host mega sport events:– create investment in infrastructure -> boosting economic activity.– marketing tool for the country;– attract foreign investors;– increase tourism;– enhance the international profile;– urban transformation;– lasting positive legacy among the public such as national pride.

The cost of the necessary infrastructure improvements is usually over shadowed by the prospects of economic gains and the aim of improved political world-renowned reputation.

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Official Logo for Rio Summer Olympic Games

The emblem symbolize Passion and Transformation

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Positive examples of legacies from mega sport events

- The summer Olympic Games in Barcelona 1992; Urban development, innovative design

and increased reputation.

- The summer Olympic Games in London 2012 – increased economic activity and tourism

in the whole of UK, and increased sport participation among citizens in the UK (marginal).

- Is the Olympic Games in Barcelona an appropriate example to use as a blue-print

for mega-spots event?

- Urban developments were already in place in Barcelona for a decade prior to the events

(Rolnik,2011)

Mega Sport Events have also generated Negative Legacies:

– Greece, Athens Olympic Games, 2000; economic losses and massive debts.

– China, Beijing Olympic Games, 2008; relocation and forced evicted people.

– South Africa, World Cup, 2010; force evictions of people through removal of slum areas;

did not generate the forecasted surplus.

– Canada, Montreal 1976; economic losses which was paid by the government until 2006.

(Reference: Rolnik, 2011)

A number of Negative Legacies

Legacies – positive and negative impacts

– Economic analyses of mega sport events commonly focus on the positive effects and legacies of the events, while ignoring opportunity costs and the efficiency of using scarce resources (Preuss 2009).

– Questioned whether developing countries with social problems can justify the public spending of this scale on a one-off sports event?

– Rolnik (2011) suggests that policy makers find justifications and support for the spending since sports it is an issue which is believed to unite nations and is something which the public generally like and agree with.

Research Question 2012

– Research question 2012; can the economic legacies from the upcoming mega sport events in Brazil be used to create a positive social legacy, such as further poverty reduction and reduced inequality in Brazil?

Background;– Brazil has performed relatively well through out the global economic

crisis including maintaining economic growth.– Brazil is one of the few countries managing to combine economic

growth with the reduction of absolute poverty and inequality.– Legacy of mega sport events is commonly believed to boost economic

activity and enhance political reputation.– Therefore, could hosting these mega sports events further improve

Brazil’s performance economically and decrease poverty and inequality?

The Case of Brazil – 2012

Despite the global economic crisis, Brazil’s economy performed relatively well;- Annual GDP growth rate of 7.5 % percent in 2010- 12 million lifted out of absolute poverty – from 11% to 3.8% (2001-2007)- Income inequality (Gini) fell 8%, to 0.47 (2001-2009) (still high)

Important contributors to poverty and inequality reduction: – Bolsa Família (conditional cash transfer programme)– New national minimum pay policy– Brazil provided the poorest segments of society with high quality opportunities (exit

doors)

Conclusion; firstly uncertain if the mega sports events will bring economic gains. If it does it will have to particularly target poverty reduction and inequality to be effective. Since wealth do not trickle down to the poor, poverty and inequality must be directly targeted in order to have any affect on poverty- and inequality reduction.

The case of Brazil - 2013

– Massive over spend in the budget for the arenas for the World Cup. The cost for stadiums alone, originally estimated at $1.1 billion, has already reached more than $3 billion.

– The World Cup is costing Brazil 28.1 billion reals, according to the government. It was explicitly told that all of the money to be spent on stadiums would be private, leaving public funds for much needed infrastructure projects. This is no longer the case.

– Many of the infrastructure projects, which could bring a tangible impact to the citizens, have been withdrawn.

– Force evictions of citizens in various of cities have commenced to make space for urban development projects.

Economic forecasting 2013

– Brazil’s projected budget for hosting the World Cup is $13.3 billion and $18 billion for the Olympics (not counting the projected amount of public and private investment that will be needed before).

– Based on recent games, the World Cup generates approximately $3.5 billion in revenue (with most going to FIFA) and the Summer Olympics generate around $5 billion (with most going to the IOC).

– Due to increased costs and delays, and at least five of the 12 host cities have admitted they will not build the promised bus lanes, metros or monorails before the events.

– There is a high risk that the host country will be net losers unless the host makes up the difference with increased income from tourism, physical legacy from the games (sports venues and infrastructure) and investment during the games or in the future.

Legacies in Brazil post 2016?

Three reasons for why the economic impacts in Brazil may be less favorable than first expected; 1) A tax break is granted for construction or infrastructure related to the mega sport events, so the business activity generated by the construction for these events will not generate revenue to the federal government.2) If the Olympic games generate losses the economic deficit will be paid by the Brazilian government, since the three levels of government have guarantee the International Olympic Committee to cover any potential losses. 3) Mega sport events are often associated with huge economic losses and the job-creations, increase of tourism and economic activity forecasted are rarely as favorable as predicted beforehand in economic forecasts.

Social legacies - Force evictions

Force evictions – a social legacy

– 7185 families in Rio de Janeiro alone are threatened with removal, in 24 communities. That equals around 32 300 inhabitants or 0.5% of the total population of Rio de Janeiro (Articulação Nacional dos Comitê Popular da Copa e das Olimpíadas (ANCOP))

– As many as 170 000 people in Brazil are threaten with force evictions (ANCOP).

– Force evictions also took place in China and South Africa as part of the preparations for the mega events.

UN resolutions

– 2010 the UN Human Rights Council adopted a resolution on sports mega-events and housing rights, in which it urged states to promote the right to adequate housing and to create a legacy housing sustainable in the context of mega-events.

– In May 2012 the UN Human Rights Council recommended Brazil that the works to Brazil the 2014 World Cup and 2016 Olympic Games not generate forced evictions of residents and bring durable benefits for the urban marginalized.

Social Legacy in Brazil

Unidade de Policia Pacificadora (UPP)

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Social Legacy – Unidade de Policia Pacificadora (UPP)

– Unidade de Polícia Pacificadora (UPP) was created and implemented in Rio de Janeiro by State Public Security Secretary José Mariano Beltrame.

– The first UPP program was implemented in Dona Marta in 2008.– The stated goal of Rio's government is to install 40 UPPs out of

Rio’s 1045 favelas, by 2014.– Primary pacification aims not to end trafficking, but to retake

territories and reduce violence.– The majority of the favelas are allocated in the South and West

Zone of Rio de Janeiro where the Olympics will take place and is frequent by tourism.

– Violence is reported to have decreased in the pacified favelas.

Legacies due to the UPP

– Pacification has lead to an increased interest from foreign investors and an increase in property prices. Some community residence can no longer afford stay living in their community, others have managed to establish new business catering for a greater interest from tourists etc.

– Few drug lords has been captured and the majority of criminals were fleeing the favelas before the police entered to establish a permanent UPP presence.

– It is recognized that drug trafficking has not halted but continues in other parts of the city and that criminals have migrated from parts of Rio with UPP, to areas with less police and no UPP.

– The few drug lords captured and non confirmed founding post 2016 begs the question if the pacification is permanent or temporary?

Shift in research question

– There seemed to be shift among the general population about the view of these mega sports events..

Rio de Janeiro June 2013

Estimated that 1 million people took to the street across Brazil on 20th of June.

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Demonstrations and occupations of governmental

buildings have taken place since June 2013 in various cities in Brazil.

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Reaction from the public - Demonstrations sparked by an increase in the bus fares in Sao Paulo

and Rio de Janeiro, lead by the Movimento Passe Livre (MPL).- Even though the authorities quickly withdraw the suggestion and

lowered the price again, the protests continued and even escalating due to the brutally handled responds from the police.

- The protests escalated and spread to a large number of cities. The demonstrations protested against a number of issues including corruption, poor public services, and the huge public spending on stadiums being built for the upcoming mega events.

- Demonstrations and anti-Olympic movements have been taken place also in various cities such as London and Barcelona, however not at the same scale as in Brazil.

Responds from the President Dilma

– On June 24, President Dilma Rousseff gave a speech in which she gave her support for the democratic right to protests while at the same time condemning the violent which took place during a number of protests.

– In responds to the protests she launched a policy plan consisting of five points including consider political reform, making corruption a felony, invest 50 billion reais ($23 billion) in city transport, increase spending on health and education and a reiteration of the importance of fiscal responsibility.

Responds from the Governor in Rio de Janeiro

– Governor of Rio de Janeiro, Sergio Cabral responded to protests by signing a decree creating a Special Commission to Investigate Acts of Vandalism in Public Demonstrations.

– The commission is entitled to take all necessary measures to investigate acts of vandalism during protests, including breaking individual's privacy in cases permitted by the law. According to the decree, these cases will have “absolute priority" over other crimes.

– Many social media commentators compared the proposed legislation to decrees signed during Brazil's military dictatorship.

Protests and manifestations

– Other host cities of Olympic Games such as London and Barcelona also had a popular movement against the Olympic Games and the urban development which included transformation of communities. The scale of these protests were a lot smaller than Brazil.

– The protests in Brazil was not initiated as a protest against the mega sports event. The protests, sparked by the increase bus fare price quickly developed into broader issues such as anti-corruption, the huge investments in the infrastructures for the mega-sport events and anger against FIFA and its ability to influence Brazilian policies.

Concluding remarks

Social impacts prior to the events;– Force evictions of residents in favelas; as many as

170.000 people in Brazil are threatened to be removed.– The UPP program has pacified 40 of Rio de Janeiro’s

favelas and could provide a long–term social impact (though funding is not confirmed post-2016).

– Social unrest with on-going demonstrations in various cities in Brazil with up to a million people participating. Grievance over public money spent on new stadiums, corruption and lack of investment in health care and education.

Concluding remarks

Economic impacts prior to the events;- The budget for the World Cup in Brazil is $13.3. The price

for stadiums alone, originally estimated at $1.1 billion, has already reached more than $3 billion.

- The cost of hosting the Olympic Games is estimated to and $18 billion. If the Games do not generate a surplus the Brazilian government have guaranteed to cover the losses.

- Increased property prices in Brazil and noticeably in the pacified favelas.

- The risk of overspending the budget is plausible.

Concluding remarks

– While politicians and organizers uses the notion of legacy as a positive notion to usher public support, the legacy may also provide a negative outcome.

– In the preparation for these mega sports events we have already seen social and economic impacts in Brazil. Public spending has been directed to building stadiums as suppose to invest in infrastructure, education and health. Communities has been transformed, either by pacifications or by removal. These social and economic impacts have resulted in social unrest and huge protests across the Brazil.

– It is evident that organizing these mega sports events will have a long term legacy in Brazil. However what they finally may be is too early to tell.

– The research will continue…

REFERENCE LISTErnst and Young (2010) Sustainable Brazil Social and Economic Impacts of the 2014

World Cup © 2010 EYGM Limited. (The study made in association with the Fundação Getúlio Vargas.)

Newton, Caroline (2009)The Reverse Side of the Medal: About the 2010 FIFA World Cup and the Beautification of the N2 in Cape Town, Urban Forum

Ritchie, J (2000) Turning 16 days into 16 years through Olympic legacies. Event

Management

Rolnik, Raquel (2011) Interview: “World Cup and Olympics: The Show and the Myth” published by Rio on Watch at http://rioonwatch.org/?s=Raquel - originally published in

Portuguese at http://pagina22.com.br/index.php/2011/08/o-espetaculo-do-mito/ “O espetáculo e o mito” - Revista Pagina 22

Oxfam (2012) Oxfam Briefing Paper Left behind by the G20? How inequality and environmental degradation threaten to exclude poor people from the benefits of

economic growth. Oxfam GB

Wade, R, H (2011) Income Inequality: Should We Worry About Global Trends? European Journal of Development Research.

References

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