The International Legacy of Sports Mega-events in Brazil: Political and Economic Lessons for the Semi-peripheral Countries*
El legado internacional de los megaeventos deportivos en Brasil: lecciones políticas y económicas para los países de la semiperiferia
Papel Político, vol. 25, 2020
Pontificia Universidad Javeriana
Carlos Pulleiro a email@example.com
Sun Yat-sen University, China
Received: 04 September 2018
Accepted: 03 April 2019
Published: 29 June 2020
After a decade of political and economic shared interests in the organization of sports mega-events between semi-peripheral states and international sports federations, the case of Brazil with the organization of the FIFA World Cup in 2014 and the Rio Olympics of 2016 has changed the dynamic of this relationship. On the one hand, the semi-peripheral states have verified the associated risks with the organization of sports mega-events regarding the political, economic, and social destabilization of the country. On the other hand, the inability of sports mega-events to generate positive legacies as promised during the bid phase, has questioned the role of sports organizations and their championships as development tools.
On the one hand, the semi-peripheral states have verified the associated risks with the organization of sports mega-events regarding the political, economic, and social destabilization of the country. On the other hand, the inability of sports mega-events to generate positive legacies as promised during the bid phase, has questioned the role of sports organizations and their championships as development tools.
Keywords:sports mega-events, Brazil, semiperiphery, BRICS, disempowerment.
Después de una década de intereses políticos y económicos compartidos en la organización de megaeventos deportivos por parte de los estados semiperiféricos y las federaciones deportivas internacionales, el caso de Brasil, con la organización de la Copa Mundial FIFA en 2014 y los Juegos Olímpicos de Río de 2016, ha cambiado la dinámica de esta relación. Por un lado, los estados de la semiperiferia han confirmado los riesgos asociados con la organización de megaeventos deportivos respecto a la desestabilización política, económica y social del país. Por otro lado, la incapacidad de los megaeventos deportivos para generar los legados positivos que fueran prometidos durante la fase de candidatura ha generado cuestionamientos respecto al rol de las organizaciones deportivas y sus campeonatos como herramientas de desarrollo.
Por un lado, los estados de la semiperiferia han confirmado los riesgos asociados con la organización de megaeventos deportivos respecto a la desestabilización política, económica y social del país. Por otro lado, la incapacidad de los megaeventos deportivos para generar los legados positivos que fueran prometidos durante la fase de candidatura ha generado cuestionamientos respecto al rol de las organizaciones deportivas y sus campeonatos como herramientas de desarrollo.
Palabras clave: megaeventos deportivos, Brasil, semiperiferia, BRICS, desempoderamiento.
During the first decade of the XXI century, sports mega-events arrived to a new era where semi-peripheral countries like China, Russia, South Africa, and Brazil (Morales, 2013) entered as contenders to host the FIFA World Cup or the Olympic Games.
This was due to the new political, economic, and sports context that emerged after the Cold War. The fall of the Eastern bloc, the sports commercialization, and the neoliberal globalization process implied that sports mega-events were exhibited under a win-win logic: on the one hand, the FIFA (Fédération Internationale de Football Association) and the International Olympic Committee (IOC) are legitimized as development agencies through their sport competitions, and on the other hand, the host country would benefit from the new employment opportunities generated by the sports competitions, the construction of new infrastructure, the growth of tourism, and the promotion of the country to a global audience. In international politics, the effect would be in terms of prestige, status, and political leadership, certifying the increase of power of the host country in the international political system.
This article addresses the persistence of this logic through the analysis of the Brazilian 2014 FIFA World Cup and the 2016 Summer Olympics in Rio de Janeiro, considering them a turning point for the organization of sports mega-events. The hypothesis is that the Brazilian experience helped to reveal both FIFA and IOC mega-events not as development tools, but as tools that reinforced precisely the limitations and weaknesses of the hosting country, contributing to increase the social fracture that outburst during the Confederations Cup1 in 2013.
In first place a theoretical framework to explain the national interest in sports mega-events is presented. Secondly, the sports mega-events in Brazil are analysed considering the political, economic, and social impacts expected during the bid phase and the results achieved during the organization of both mega-events. In third place, the legacy of Brazilian sports mega-events and how they became catalysts for the protest is analysed. The conclusions remark the inability of sports mega-events to serve the political and economic purpose of the original bid. Accordingly, if a semi-peripheral country combines the organization of a sports mega-event with a context of economic or political crisis, the mega-event will contribute to accentuate the social fracture. The size, impact, and the effects of the protest will depend on the type of government of each country and how it reacts.
Methodologically, the theoretical framework focuses on the political and economic role of sports mega-events, explaining the political interest of governments in hosting this kind of events, how the different capabilities of countries shape the sports policy and the specific goals to achieve, and how the legacy of mega-events is conceived.
The hosting of mega-events is summarised in three stages: expectations, impacts, and legacy. The expectations imply how the host defines the mega-events during the bid phase and the specific political, economic, and social goals to achieve with them. In second place, the impacts–results–of sports mega-events are evaluated in terms of the adherence to the original goals of the bid, analysing the final cost and cost overruns of the mega-events; the investments in sports, transport, and telecommunication infrastructures; the socio-spatial management; the effects of the conditioning works developed to host the mega-events; and the sports results. Finally, the legacy would be the consequences and perceptions of hosting the mega-events by the country itself and by the FIFA and the IOC. The experience of other BRICS (Brazil, Russia, India, China, and South Africa) countries that already hosted the Olympics or the FIFA World Cup is used to contextualise the Brazilian case.
In terms of economic data, the information collected from official documents and websites of the IOC, FIFA, and the organising committees is complemented with other academic studies to contextualise the budget, investments, costs, and cost overruns. Specifically, tables 2 and 4 of this paper use the data of Flyvbjerg and Stewart (2016). They divide the total cost of the Olympic Games into operational costs and direct capital costs. The first ones are the Organising Committee costs: technology, transportation, workforce, administration, security, ceremonies, and medical services; while direct capital costs are the direct costs incurred by the host city, country, or private investors: international broadcast centre, media, and press centre, competition venues, and Olympic village(s). They exclude indirect capital costs like roads, railways, airport infrastructures, hotel upgrades, or other business investments because it is difficult to obtain this kind of data, the reliability is not high, and it is difficult to make comparisons across cities and nations (Flyvbjerg & Stewart, 2016, p. 6).
Theoretical framework: The political interest in sports mega-events in the XXI century
The evolution and the political role of sports mega-events
First of all, we need to consider that nowadays sports mega-events are large-scale competitions with a global relevance that attract a large number of participants, spectators, and media, implying large costs and large impacts on the built environment and the population (Müller, 2015a). Accordingly, the host country guarantees major investments in infrastructure, logistics, and security as well as other public policies that require the collaboration of public and private agencies at the local, national, and international level (Saboya & Noguera, 2013, p. 2; Radicchi, 2012; Hiller, 1998).
We can highlight especially two of them, the Olympic Games, and the FIFA World Cup. Both mega-events generate social, political, and economic impacts that transcend what is exclusively related to the sports practice. However, the Olympic Games and the FIFA World Cup do not have the same political essence. The Olympic Games have an explicit political meaning unlike the vast majority of sports competitions. The Olympic Charter (IOC, 2017a, p. 11) explains for example that the mission of the IOC is “to place sport at the service of the harmonious development of humankind, with a view to promoting a peaceful society concerned with the preservation of human dignity.” This implies that the organization of the Olympic Games must be endowed explicitly with a political content based on those wishes of peace and harmony among nations emanating from the Olympic Charter.
In this regard, the 2018 Winter Olympics in Pyeongchang display the best of Olympic diplomacy. Beyond the opening ceremony, where national delegations of North and South Korea entered the stadium under the Korean Unification Flag, the Olympic institutions paved the way for diplomatic talks. As a result, North Korea sent a high-level delegation to South Korea for the Winter Olympics opening ceremony, becoming the first diplomatic encounter in two years, which ultimately would lead to the April meeting between the South Korean President Moon Jae-in and North Korean leader Kim Jong Un.
Consequently, to secure the organization of the Olympic Games, a city bid not only has to prove that it has the best infrastructure, sports facilities, transport services, etc.2, but it also has to take into account what would be the political gain for sports development, for the Olympic values, and for the world peace in a given international context.
Additionally, it is necessary to consider the evolution itself of sports mega-events, as there has been a progressive growth in the number of athletes, journalists, facilities, expenses, technological level, etc. The political, economic, and social impacts have also amplified over the years, refining the mega-event organization to such an extent that not many countries can organize a competitive bid. Even during the Cold War3, the world championships of practically any sport were mainly organized by western countries4. Regarding the FIFA World Cup and the Olympic Games, this Western pre-eminence is maintained as we can see in table 1.
An issue with the Olympic or World Cup bids is that they function as financial markets, relying mainly on trust. The crises start when FIFA or IOC cannot attract enough bids because their mega-events are unable to guarantee that the political, economic, and social gains will outweigh the costs. Therefore, both institutions are forced to reconceptualize their mega-events in order to assure their own future.
In this regard, the threat of gigantism in the Olympic Games exists since the Rome edition of 1960 (Tamayo Fajardo, 2005, p. 79; Rodríguez, 2000, p. 278). After the Black September assault during the 1972 Munich Olympics against the Israeli delegation, there was a significant increase in costs associated with security measures (table 2), constraining even more the number of countries/cities interested in hosting the Olympics until the end of the Cold War (figure 1). The necessary economic efforts did not cover the expected political outcomes.
From 1968 to 1980 the Olympic bids fell from 10 to 2 cities, and from 8 to 2 countries5, being Moscow and Los Angeles the only bidding cities for the Summer Olympics of 1980 and 1984 respectively. Even in football, Colombia had to retire in 1982 from the organization of the 1986 World Cup due to economic reasons6.
In 1992 the Olympic bids grew up to thirteen cities of twelve countries. The success of the 1984 Olympics in Los Angeles, with its innovative approach of having only private funding–a surplus of $232.5 million–the growing of commercialisation incomes due to the TV rights, and the global scope of the new sponsorship deals7, plus the disappearance of the Cold War’s East-West fracture, would make that more countries perceived the sports mega-events as an attractive way to develop their economies and to project their political and socio-economic achievements globally.
As Malfas et al. (2004, p. 218) explain, in the Post-Cold War era:
Economic beneﬁts are the prime motive for all the interests involved in the hosting of the Games8, be it the local Government, which seeks urban development of the region through infrastructure made for the staging of the event, or the corporation that becomes a sponsor of the event to attract publicity. While bidders battle for the kudos of winning the hosting of a mega-event, the desired economic, ﬁscal, social, cultural, and political outcomes are expected to justify their actions.
The political interest in sports mega-events
Both FIFA and the IOC define the concept of country as “an independent state recognised by the international community” (IOC, 2017a, p. 68; FIFA, 2018, p. 4). This means that the State is the main actor in terms of political representation through the National Olympic Committees (NOCs) and National Sports Federations (NFs).
A direct consequence of this competition between countries for victories and medals is the existence of a political interest in sports championships. The prestige, status, and competitiveness of the states is at stake due to the national representation in sports competitions, which is visualized through political symbolism: flags, anthems, and coat of arms. As McIntosh (1979, p. 140) argues, “if sport was to inﬂuence politics it would be hardly conceivable that the interaction should be in one direction only and that politics should have no bearing at all upon sport.”
At the same time, political interests in sport can be divided between national and international ones. With regard to national political interest and according to authors like Houlihan (1991), Riordan (1993), Chen-Yu Lin et al. (2009), countries want to promote physical exercise and sport as a healthy daily habit among the population, spread national pride through victories, promote concepts such as solidarity among society and lastly, increase the legitimacy of governments due to sports development and athletes’ victories.
At international level, countries perceive the sports competitions as a way to project their international status, visualize their political and economic achievements to a global audience, or as a high level diplomatic tool (Schweller, 1999; Beacom, 2012; Cha, 2009). In terms of Joseph Nye (2004) the main goal is to increase soft power9, with sports mega-events playing a key role in the construction of nation branding: “a process by which a nation’s images can be created, monitored, evaluated, and proactively managed in order to improve or enhance the country’s reputation among a target international audience” (Fan, 2010, p. 101).
Consequently, there is an overlap between political interests of national governments and sports interests of NFs and NOCs, making the countries indivisible as political actors and sports actors, sharing their interests in being represented in international sports organizations and participate in international sports events; winning the maximum number of medals and championships possible; and lastly, organizing sports events periodically (Pulleiro, 2016a, pp. 56-58).
However, we also need to consider the different capabilities of countries to understand how the diverse interests in these mega-events are conceived. According to Immanuel Wallerstein (2004, pp. 56-57), the semi-peripheral countries try to maintain at least their intermediate international status while hoping at the same time to climb in the international structure. In this regard, Müller and Steyaert (2013, p. 141) emphasize the role of sports mega-events in order to display that “the host nation has earned its rightful place among the leading powers as a nation of culture, sport, and entertainment –over and above military might (e.g. Russia) or economic prowess (e.g. China).”
In the case of Brazil, we include this country in the semi periphery of the international system. According to Morales et al. (2012, pp. 19-20), the BRICS countries began climbing positions in the last decades from the geopolitical South in “technological areas, in their stock markets, in military expenditure, high domestic growth, and poverty alleviation, as a consequence, they gained a continuous projection as global players.” Accordingly, the large size of their economies and their rapid growth have made them more active and influential in global economic affairs (Alexandroff & Cooper, 2010; Schirm, 2010), and that is why the Olympics and the World Cup fitted so well into the foreign policies of the BRICS and other semi-peripheral states during the last decade, being an integral part of the strategy to show the world the progress and developments that brought them closer to world powers. As Kamilla Swart and Urmilla Bob (2004, p. 1312) affirm: “The hosting of major events has economic, social, political, and symbolic meaning. This implies that a country’s ability to succeed in the arena of hosting mega-events depends on international recognition in relation to its economic, social, and political capacity.”
The legacy of sports mega-events
The concept of legacy is another key element of hosting a sports mega-event. First of all, according to Preuss (2014, p. 25; 2007, p. 211) the term legacy “embraces all changes created for and by a sport event that remains longer than the event itself as well as all future impacts created by those changes.” The configuration of the legacy is generally oriented to cover the needs of sports institutions and public authorities. While sports institutions like FIFA or the IOC want “to avoid criticism of unreasonable spending of scarce public resources” with a “healthy interest in keeping demand high for future bids” (Manzenreiter, 2014, p. 127), the public authorities want to defend the tangible benefits promised to the population during the bid phase.
Here, Manzenreiter (2014) points out analysing the Beijing Olympics, that the difficulties to measure the legacies of sports mega-events rely on the important question of “legacy for whom.” In this regard, the mega-events legacies affect stakeholders differently and as a result, it can be positive, negative, or it can be positive for some and negative for others (Preuss, 2014, pp. 32-35). Meanwhile, Jules Boykoff (2013, pp. 41-43), claims that sports mega-events are included in what he calls “celebration capitalism,” While the political activists and social critics are unwelcome, the politicians and the economic elites advance policies impracticable during normal political times, putting forth public-private partnerships–the public pays more, thereby taking on more of the risk–as the dominant mode of economic transaction.
Therefore, the organization of a sports mega-event does not guarantee per se a positive legacy. It can even be counterproductive, because there is a chance for the host country to expose its weaknesses, questioning even the key political and economic strengths that served to convince the FIFA or the IOC to grant the organization of the mega-event to that country. In this regard, both the capabilities of the host country and the abilities of sports mega-events as strategic development tools would come into question. Brannagan and Giulianotti (2014, p. 706) define it as soft disempowerment, which happens in “those occasions in which you may upset, oﬀend, or alienate others, leading to a loss of attractiveness or inﬂuence.”
Accordingly, for a semi-peripheral country, the organization of sports mega-events is a test by which the country needs to demonstrate that it belongs to the core of the international political system.
The sports mega-events in the semi-periphery: The case of Brazil
The improved international position of BRICS allowed them to develop new sport policies, stablishing ambitious goals due to their growing political, economic, and social capacities. In 2007, FIFA confirmed Brazil as the host country for the 2014 World Cup, and only two years later, the IOC selected Rio de Janeiro as the host city of the XXXI Olympiad. Consequently, Brazil joined the other BRICS countries in their strategy of organizing sports mega-events.
One of the main reasons behind Brazilian bids was the economic development since the 90s. For example, between 1995 and 2009 Brazil had an average growth rate of 18.37%, with an increase in foreign direct investment from $2.15 billion in 1994 to almost $26 billion in 2009 (Morales Fajardo & Serrano Hernández, 2010). The Brazilian GDP per capita at constant prices grew from $6,666 in 1999 to $8,213 ten years later (World Bank, 2018), the Gini coefficient decreased by five percent between 1998 and 2008 and “the job creation in the labour market during the first decade of 2000 led to a greater social inclusion, a decreased poverty rates and an increased well-being” (Cacciamali, 2011, p. 50).
The Brazilian Olympic bid used the new economic status of Brazil to justify the hosting of the 2016 Olympics. In this regard, the speech of former president Lula to the IOC defended that:
Among the ten largest economies in the world, Brazil is the only country that did not host the Olympic and Paralympic Games….This bid is not only ours, is also of South America, a continent with almost 400 million men and women and about 180 million young people. A continent that, as we have seen, never hosted the Olympic Games, and it is time to fix this imbalance. (Lula Da Silva, 2009, p. 2)
The political, economic, and social expectations of Brazil organizing the FIFA World Cup and the Olympic Games
Brazil is no different from other countries that organize sports mega-events. In simple terms, everyone expects to obtain maximum benefits with the lowest possible investment, and according to the Sports Ministry, the initial total cost of the World Cup was estimated at around $18 billion, of which 68% -$12.18 billion- would come from the public sector (Cottle & Rombaldi, 2014, pp. 11-12; Riou, 2012, p. 26); while the Olympics, including the Paralympic Games, had a projected cost of $14.42 billion–BRL 28.86 billion–which at 2016 prices was estimated at $16 billion–BRL 38.75 billion–(Riou, 2012, pp. 24, 27).
The benefits would materialize in a better international position for Brazil in the international political-economic scenario and a great economic impact thanks to the investments in infrastructures and the attraction of tourism, which would contribute to the creation of employment. In addition, there would be also a major social impact in at least three areas: urban development, social inclusion, and sports practice.
The speech of Lula defending the Brazilian bid for the 2014 World Cup is a good example, again, of how Lula connected social progress and the ascending political and economic status of Brazil with the organization of sports mega-events:
Here we are assuming the responsibility as a nation, as the State of Brazil, to prove to the world that we have a stable and growing economy, that we are a country that has reached stability. We are a country that has many problems, yes, but the people in our country are determined to solve these problems. (Lula Da Silva, 2007, p. 1)
In 2011 it was announced that the economic impact of the World Cup would be of BRL 142 billion–$73.95 billion– up to 2014, generating 3.63 million jobs a year (Ernst & Young Terco, 2011, pp. 5-6). But right after the World Cup, in July 2014, the economic expectations dropped. A study carried out by the Economic Research Institute Foundation (FIPE) and authorized by the Brazilian Ministry of Tourism, announced that the World Cup would inject only about BRL 30 billion–$13 billion– into the Brazilian economy, on the basis of what was achieved in the 2013 FIFA Confederations Cup. In terms of employment, the same study declared that the World Cup had generated 1,000,000 jobs, of which 200,000 were temporary and 50,000 directly related to tourism (Open Media Centre, 2014).
Regarding the Olympics and according to a 2009 study conducted by the Institute of Management Foundation at the University of Sao Paulo and commissioned by the Brazilian Ministry of Sports (FIA & FIPE, 2009; Rio 2016, 2009), the expectations were that for every $1 invested in the Olympics it would generate $3.26 until 2027, creating 120,000 jobs a year until 2016 and reaching 130,000 jobs a year for the next decade. The study also estimated that the productive effects of the Olympic Games would influence 55 different sectors of the Brazilian economy.
In 2010, a Responsibility Matrix was launched clarifying the roles and responsibilities of public agencies in what was considered a “strategic investment plan in the country’s development” of more than 300 actions in areas such as airports, ports, urban mobility, stadium surroundings, security, telecommunications, and tourism (Portal da Copa 2014, 2014).
Social inclusion also played a major role, with the Brazilian authorities announcing during the Olympic bidding process the Morar Carioca program, which aimed to urbanize and bring a sewage system, electricity, and water to all of Rio’s favelas by 2020. This would lead to a significant improvement in the living conditions of many citizens (Portal Brasil 2016, 2016; Toft, 2016). During the World Cup, the Government of Brazil and FIFA launched public health initiatives, promoting healthier lifestyles through football among schoolchildren. In addition, FIFA implemented several initiatives, including for example, offsetting carbon emissions, sustainable stadiums, community support, waste management and recycling, accessibility, and green energy programs (FIFA, 2015).
Finally, both the World Cup and the Olympics would leave a real legacy in terms of renovation or construction of top-level sports facilities, which would be complemented with the training of volunteers and the promotion of both competitions to enjoy a real positive impact on health and national education, encouraging more people to practice sport. Additionally, Brazil would spend for Rio 2016 a record amount of $600 million (Butler, 2014), trying to win 27-30 medals in order to place Brazil, for the first time ever, among the top ten countries of the medal table10.
The economic and social impacts of sports mega-events in Brazil
However, the Brazilian authorities did not take into account that sports mega-events could emphasize precisely the most vulnerable political and economic dimensions of the country, rather than reinforce the role of Brazil as a growing regional and global power. Following Tomlinson (2010, p. 150), the sports mega-events are “unequivocally national events where the cities serve as a showpiece in the pursuit of national political objectives.” Therefore, and as I affirm in another article:
The focus will not be exclusively on the city management where the mega-event takes place; but also on the usefulness of the mega-event for the state as a whole in relation with the political and economic goals proposed during the bid phase. (Pulleiro, 2016b, p. 209)
Accordingly, the semi-peripheral countries are specially exposed to the Catch-22 paradox (Cha, 2009, pp. 1597-1601) according to which the host country is under the international community spotlight during the organization process, questioning or certifying not only the adequacy of the project to its effective development, but also the country’s democracy, its economic capacities, quality of life, diplomatic relations, or its sporting values–the promotion of human rights and no discrimination policies for example–. In this sense, the role of the media is a key element to read the success or failure of a mega-event because “mass media construct, reinforce, and promote specific ways in which the audience understands people, cultures, cities, and countries” (Bailey et al., 2017, p. 75).
Consequently, the World Cup and the Olympics in Brazil would have to be perfect in the contribution of both mega-projects to the development of the country, limiting the results achieved to the projections pointed out in the previous section. However, as we have seen in recent years, there has been broader political, economic, and social consequences, creating a major fracture between the political, economic, and sporting elites of Brazil and the majority of the population regarding the legacies of the sports mega-events in the country.
In this sense, we can highlight the investments in road networks, public transport–the Bus Rapid Transit (BRT), the metro, and the Light Vehicle Rail system (VLT) – airports, telecommunication systems, sports infrastructure, and tourism industry11; the transformation of Porto Maravilha “into a strategic centre for business, culture, and leisure”; or the education programmes like Transforma, encouraging active lifestyles for seven million youngsters in over 16,000 schools across Brazil since 2013. All of these are achievements undoubtedly connected to the FIFA World Cup or the Olympic Games in Brazil (IOC, 2017b; FIFA, 2015).
In terms of economic impact, a constant in all sports mega-events are the cost overruns, and Brazil was no exception. The costs associated with the 2007 Pan-American Games, hosted also in Rio de Janeiro, increased at least 3.5 times12. Additionally, these sport facilities had to be thoroughly renovated for the 2016 Olympics (Nothen, 2016, pp. 210-212).
Only the cost of the stadiums for the 2014 World Cup increased from the initially estimated $1.1 billion (FIFA, 2007, p. 38) to a final cost ranging from $3.2 to $4.7 billion according to various sources13 (Gaffney, 2014; StadiumDB, 2014; Zimbalist, 2016, p. 117). The stadiums turned into “white elephants,” with a maintenance cost higher than the benefits provided. In this regard, the Mané Garrincha stadium in Brasilia, built for the 2014 World Cup, has a maintenance cost of $2.5 million per year (Boadle, 2015). This stadium could at best recoup 12% of its initial price. In 2018, even the public real estate company Terracap admitted that “the strategic decision to build the stadium was wrong” (Ramos, 2018).
The public spending confirmed in the World Cup was $11.6 billion–BRL 25.6 billion– (Alves & Guimarães, 2015; Rapoza, 2014), mainly distributed among stadiums, urban mobility, and airports. FIFA placed the total amount at $15 billion (FIFA, 2014) although this figure could reach $20 billion (Zimbalist, 2014). In the Olympic Games, the last figures that are handled are BRL 43.3 billion–$13.2 billion– BRL 14.5 billion–$4.4 billion– more than originally expected (Etchells, 2017).
Although the total cost overrun of both mega-events was not so high, the key element is the distribution of the final expenditure based on the original bid. Most infrastructures are financed through the reduction of public services, the increase of taxes, or through public debt, being sports mega-events usually transformed into a construction almost exclusively of sports infrastructure, prioritising investments that do not have long-term benefits, ignoring at the same time the whole initial project which did have a national vision (Zimbalist, 2016; Waldron, 2014).
According to the National Articulation of the Popular Committees of the World Cup and Olympics (Ancop), only 1.6% of stadium costs have been funded by the private sector (Ancop, 2014, p. 95), and between 2010 and 2013 the amount destined for urban mobility decreased by more than BRL 4 billion, withdrawing 21 of the 57 originally planned projects. In February 2014, only 10 of the 26 constructions in relation to the airports were finished (Matsuoka, 2015, pp. 12-13), leaving many projects still unfinished today14.
Contextualising the cost overruns, Flyvbjerg and Stewart (2016) explain–table 4–that sports mega-events, at least the Olympic Games, always have cost overruns, while Andrew Zimbalist (2016, pp. 51-60) minimizes the economic impacts of the Olympics and FIFA World Cup15.
For example, during the 2014 Sochi Olympics in Russia, the cost overruns were 289%, becoming the most expensive Olympics ever16, with a total cost reaching almost $55 billion including the indirect capital costs17 (Müller, 2015b, pp. 631-632). It was originally planned that the private funds covered at least 38% of the initial budget, but in the end, the public funds covered the 80% of the direct capital costs between the public administration–57.7%–and the state-owned companies–22.5%–(Müller, 2015b, pp. 631-632, 637).
A common criticism regarding the sports mega-events is that they are private events with a primordial public expenditure that generate private benefits, serving the interests of the political and economic elites. On this point, Demian García and Patricia Ramos (2015) highlight three fundamental elements regarding the socio-spatial management of mega-events in Brazil. The first one is that a large part of the investments planned in the Matrix of Responsibilities prioritized rich areas and urban centres. In this regard, the World Cup investments have focused on the Southeast Region, reaching 42% of the total resources, followed by the Northeast Region with 22% and the Centre-West Region with 16.6%. Consequently, the North and South regions are the ones that obtained fewer resources, reproducing the traditional distribution of public resources in the history of Brazil (Alves & Guimarães, 2015, pp. 63-64).
Secondly, there was an appreciation of immovable property on cities where major investments were made. The role of the World Cup and the Olympics was to speed up the trend that was already in progress, triggering a rapid rise in housing prices over inflation and personal incomes (Gaffney, 2016; Alves & Guimarães, 2015).
The last issue was the continuous process of expropriation and expulsion of population due to the conditioning works to host the mega-events. This already happened during the preparations of the Beijing and Sochi Olympics, the FIFA World Cup of South Africa and even in the 2010 Commonwealth Games of India (Fowler, 2008; Newton, 2009, p. 98; Housing and Land Rights Network, 2011). In Brazil, only two months after the awarding of the 2016 Olympics to Rio, a programme to evict favelas was presented and between 2009 and 2015, 77,206 displacements took place in Rio de Janeiro (World Cup and Olympics Popular Committee of Rio de Janeiro 2015, p. 20). Juliana Barbassa pointed out in January 2016 that:
They are moved from what we in Rio call the south-central area which is actually on the east where the jobs are concentrated in Rio de Janeiro and the cluster on the western area, which is Rio’s real-estate frontier where the prices are really blooming. So, you are basically taking the poorest population of Rio from the area with the greatest jobs and greatest transportation network, greatest infrastructure and you are moving them to the far west which is the area with the fewest amounts[A1] of jobs, most devoid of transportation and infrastructure of any sort. (Toft, 2016)
According to the Ancop (2014, p. 21), in 2014 there were about 250,000 forced displacements throughout Brazil, usually with the aim of “clearing the land for large real estate projects with speculative and commercial purposes.” In the end, sports mega-events were used opportunistically to encourage real estate speculation, being consciously part of a process of economic restructuring under neo-liberalism logic (Gaffney, 2016)18. For example, in Porto Maravilha, a public debate with the residents was not held before the implementation of the projects. All the proposed actions seem justified, purely and simply, by the imminence of the two sports mega-events (Lima Carlos, 2010).
In the end, even the sporting results did not meet the expectations. In the World Cup, Brazil was eliminated by Germany in what was considered a national humiliation. The result of the game result (7-1) was the biggest winning margin in a World Cup semi-final, the worst loss by a host country in World Cup history, and particularly for Brazil, the result became the worst-ever defeat at home, and one of their two worst losses equalling a 6-0 defeat to Uruguay in 1920.
In the Olympics, although Brazil won more medals than ever, it did not manage to get at the top ten countries of the medal table. If we compare the results of Brazil with the Olympics organized by China (Beijing 2008) or Russia (Sochi 2014), the medals achieved by Brazilian athletes fell short of the expectations.
Additionally, despite the fact that the Brazilian sports agenda has focused intensively on the mega-events preparation, monopolizing the public sports budget since the last decade (Coakley & Lange De Souza, 2015; De Castro et al., 2015), there has not been a long-term planification. In 2017, the Brazilian Olympic Committee admitted that economic investment in Brazilian sport had been reduced to where it was in 2000 (Estadão Conteúdo, 2017), and consequently, many athletes have lost the economic or technical support from their national federations after the Games (Davies, 2017; Drehs & Lajolo, 2017).
The legacy of Brazilian sports mega-events: social fragmentation
The Brazilian case has been the greatest exponent of how sports mega-events can generate social fragmentation in the hosting country. One the one hand, the civil society denounced that public institutions did not take sufficient measures to eradicate poverty and inequality. On the other hand, the political, sporting, and economic elites claimed that Brazil is a central state of capitalism, which has left behind the underdevelopment and offers great investment opportunities.
In political terms, a positive discourse exists among Brazilian diplomats regarding the impact and legacy of the Rio Olympics, considering even negative factors like budget cuts due to the economic crisis or the epidemic of dengue and zika virus19 (Rocha, 2017). An opinion not shared by the media, at least in relation to the 2014 World Cup. According to Bailey et al. (2017) there were two main narratives in English-language mass media before the celebration of the 2014 World Cup: the first one was if Brazil was ready for the World Cup; the second one covered the social and police violence triggered by the urban restructuring processes.
In this regard, the expenditure of at least $25 billion on sports mega-events with a direct involvement in forced evictions, with an inability to solve the urban transport problems and the price and shortage of housing, in addition to the privatization of public domain without improving access to collective goods such as schools or hospitals, contributed to the social outburst that started in 2013 during the FIFA Confederations Cup.
The mass protests in Brazil mobilized an estimated 2 million people across 100 Brazilian cities, with at least 4 people dead and hundreds of people injured and arrested. Although the protests were originally caused by increases in bus, train, and metro fares in some major cities, a survey conducted in June 2013 claimed that the main motivations were the dissatisfaction with the political system, public transport conditions, and the spending on the World Cup and Confederations Cup (Omena, 2015). These demonstrations and protests were losing steam, but they remained until the World Cup and focused directly on the waste of resources and cost overruns of the FIFA event and the Olympics.
It should be noted that when Brazil was designated as host country for the World Cup and the Olympic Games, the global financial crisis had not hit the Brazilian economy yet, but everything changed since 2013. In 2015 and 2016 Brazil’s GDP fell by 3.8% and 3.6%, respectively. The unemployment rate rose from 6.8% in 2014 to 12.0% in 2016, which means around 12.3 million people unemployed and an estimated 2.8 million private sector jobs cut over the preceding two years (Cascione, 2017; Reuters Staff, 2017).
As Flyvbjerg explains, “the timing couldn’t be worse… the last thing Brazil needs is the billion-dollar cost overrun from the Olympics,” the only solution “is to throw more money at the project. It’s like writing a blank cheque” (Gordon, 2016). Moreover, the period between the initial plan and the start of the mega-event itself implies “many years of intervening inflation. Especially when a lot of production is concentrated in a few areas, the increasing demand for construction materials, engineers, and manual labour pushes up the prices of all the inputs” (Zimbalist, 2016, p. 64).
The massive mobilizations and protests across the country ruined one of the key strategies of the organising committee in order to have a successful Olympics in Rio: the global promotion of the country. It was expected that Rio 2016 would place “Brazil in the global spotlight, reinforcing its status as a major and growing economy and a unique visitor destination,” boosting the reputation of the country “as an exciting and rewarding place to live, do business, and visit” (Rio 2016-Candidate City, 2009, pp. 19, 21).
In the end, more than obtaining soft power, Brazil suffered from soft disempowerment and although in the eyes of the FIFA, IOC, and the organising committees both mega-events went off well, relaxing the social unrest in the country, this was the first time that “a sporting association, FIFA, and an event, became the target of the protest rather than its vehicle” (Dorsey, 2014). In fact, one of the reasons for the 2016 impeachment of the former president of Brazil, Dilma Rouseff, was precisely granting FIFA a generous tax exemption due to the hosting of the World Cup. In this debate, on the one hand, one of the founders of Mídia Ninja20, Bruno Torturra, points out:
The problem is that it was a World Cup in Brazil. People fucking love soccer here. I said this to the [protesters]. I said, “It’s a bad idea to protest during the World Cup. It’s a very bad idea because everyone will hate you.” The fact that the World Cup was a structural success helped FIFA a lot because it was such a good party in most of the country. People were so happy to have the foreigners here. Everyone had a good time, and people said, “Well, there might be some wrongdoing, it was expensive to make this, but the politicians rob anyway. It’s happened every time. At least we got a good World Cup.” (Bailey et al., 2017, p. 85)
On the other hand, K. Steiker-Ginzberg argues that despite the euphoric coverage, once the World Cup began “there has been a legacy of activism that has been left behind, a legacy of critique. A legacy of challenging what this event is. I do think Brazil will be remembered for” (Bailey et al., 2017, p. 86).
In comparison, the Olympics in Russia and China also had external pressure and disapproval to the government policies but in the end, they could control and subdue the internal political reaction. During the Beijing Olympics in 2008 there was a strong international opposition due to China’s human rights record, to the Chinese political support to the Khartoum regime, and to the Chinese sovereignty over Tibet. The boycott campaign led by organisations like Human Rights Watch and Amnesty International had echoed in Hollywood and implied the resignation of Steven Spielberg as an artistic adviser of the Olympics. Besides, the activists of the Tibetan diaspora interrupted the Olympic Torch relay in some countries, while the exiled Tibetan government, the Free Tibet Campaign, and the Tibetan Youth Congress organised protests outside Chinese embassies in the United States and European countries. Nevertheless, the Chinese government did not allow these political campaigns to have repercussion inside the country. It only allowed three protest zones in Purple Bamboo Park, Temple of the Sun, and Beijing World Park, but from the 77 applications, 74 were withdrawn, two suspended and one vetoed (Hong & Zhouxiang, 2012; Bristow, 2008; Beacom, 2012, pp. 196-205).
In the case of Russia, in 2013, during the preparations for the 2014 Sochi Olympics, the State Duma approved an anti-LGBT+ law21 that bans gay propaganda, including making statements or distributing materials in support of LGBT+ rights; holding pride parades or similar demonstrations; defending that gay relationships are equal to heterosexual relationships; displaying LGBT+ symbols such as the rainbow flag or even kiss a same-sex partner in public. This law was condemned by the Council of Europe, by the UN Committee on the Rights of the Child, and by human rights groups such as Amnesty International, Human Rights Watch, and LGBT+ rights activists, and at that time, the Principle 6 of the Olympic Charter said that “any form of discrimination with regard to a country or a person on grounds of race, religion, politics, gender, or otherwise is incompatible with belonging to the Olympic Movement”22 (IOC, 2013, p. 12). Consequently, there was pressure on the IOC and the Olympic sponsors, urging them to show opposition towards anti-LGBT+ laws, to denounce the violence against LGTB+ people in Russia, and to support the local LGBT+ community in the country.
Even an international boycott campaign emerged, but in February 2014, the Russian LGBT+ movement and a group of other human rights organizations decided that denouncing the homophobia in Russia during the Olympics was a better strategy than the boycott23. Even though some athletes showed decorative rainbows in the nails or in the shoelaces during the Olympic competitions, the protests were limited only to the areas provided by the Russian authorities, well away from the Olympic park (Goddard, 2014).
The uniqueness of the Brazilian case according to Gaffney (2015, p. 169) was precisely that due to the protests, “the current model of mega-event hosting is facing an existential crisis.” In part because the World Cup and the Olympics “are unlikely to cure Brazil’s longer-term and deep-seated problems of political disquiet, economic instability, and mainly social inequity” (Rocha, 2017, p. 15). And we cannot forget that precisely these were some of the motives for the IOC and FIFA to select Brazil as the host of the World Cup and the Olympics.
Precisely, in 2014 Thomas Bach warned the Olympic family about the challenges of the Olympic Games, particularly, the necessary changes to the bidding process, making it easier, cheaper, and more efficient for cities. He stated that “if we do not address these challenges here and now, we will be hit by them very soon” (Grohmann, 2014).
Sports mega-events must be profitable or at least they need to follow the political and economic purpose of the original bid in order to avoid criticism to both public and sports institutions, which is impossible due to the inner nature of this kind of events. It is true that these mega-events had some positive legacies but the main question in semi-peripheral countries like Brazil is whether the investments and infrastructural developments could have been made without high cost overruns or without having future induced costs. As Zimbalist concludes (2016, p. 147), sports mega-events must be evaluated considering “the opportunity costs of land used and of the human talent committed to planning and implementing the games. Cities must ask themselves what the best long-term use of scarce land and other resources is.”
Timing would be another element to consider against the organization of sports mega-events in the semi-periphery. If a semi-peripheral country hosts a sports mega-event in a context of economic or political crisis, the mega-event will contribute to accentuate the social fragmentation as these events attract the global media attention, becoming the perfect vehicle for the social unrest, including also the stadiums, as the whistling against Dilma Rousseff, Joseph Blatter, and Michel Temer in the Confederations Cup, the World Cup and the Olympics pointed out.
The size and impact of these protests and their effects will depend on the government type and how it reacts. In countries with stable, strong, and repressive governments, it is less probable that large-scale protests would take place. In the sports mega-events of China, Russia, or South Africa there were also evictions, gentrification processes, unfinished works, cost overruns, and “white elephants” that were ultimately financed with public money. However, considering certain similarities with Brazil, at least in terms of having a semi-peripheral economic condition, in these countries the protests and their political effects were small in comparison. Nevertheless, there will be pressure and criticism from the outside to the host country in terms of lack of democracy, bad governance, or respect to human rights due to the Catch-22 paradox, but without a political and social pressure from within the country, it would be practically impossible to force a change in the government’s policies, at least in the short-term.
India would serve as an example of being aware of the whole picture, waiting to improve the infrastructures of the country, the sporting level, and the standards of living of its population before organizing a bid for the Olympic Games or the World Cup. In 2009, the sports minister of India, Manohar Singh Gill, declared that India would not bid for the 2020 Olympics due to the poverty rates and the bad situation of the sports infrastructure: “China spent Rs 50 billion on its Olympic Games. Think if you are ready to spend that amount” (Games Bids, 2009). In 2015, the Indian Prime Minister, Narendra Modi, insisted on the idea that India would host the Olympics “after full preparation and after having expertise,” requesting even to the IOC “support in making India a hub of sports infrastructure, sports technology, and sports equipment manufacturing” (PTI, 2015a, 2015b).
The World Cup and the Olympic Games in Brazil have shown that the usual economic evaluation overestimates the benefits, legacies, and positive social impacts, while minimizing the costs, cost overruns, and negative social impacts, questioning more than ever the suitability of these sports mega-events. If we also consider the corruption scandals during the bid phase24, especially in the FIFA (Kistner, 2015), the distrust in sports institutions is bigger than ever. In this decade, Boston, Rome, Oslo, Stockholm, Krakow, and Hamburg withdrawn their Olympic bids due to the social and political opposition, being the fears to negative economic and social impacts the main reason behind it.
In this context of economic unsustainability, social rejection, and political fear, both the IOC and FIFA have designed short and medium-term work plans for their mega-events, seeking to leave behind the idea that the World Cup and the Olympics only implies a subtraction of resources from other socio-economic areas where they are really needed. The Olympic Agenda 2020 and the FIFA 2.0: The Vision for the Future want to ensure financial and environmental sustainability, minimise the political and economic risks, and improve governance and transparency in sports management. A key element is the concept of transversality, in order to include political, economic, and social actors mainly affected by the organization of mega-events, into the organizational process.
However, these measures could not be sufficient as the distrust persists. The situation is quite similar to that of the late 70s as only Paris and Los Angeles presented a bid to host the 2024 Olympics; being the first time that the IOC agreed to award two consecutive Olympic Games simultaneously25.
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A tournament held in the country that would host the next World Cup as a test event for the larger tournament.
Or at least having a solid plan during the bid phase.
United Kingdom, Switzerland, Finland, Norway, Australia, Sweden, United States, Italy, Austria, Japan, France, Germany, Canada, Spain, and South Korea as western countries. Yugoslavia and the Soviet Union as communist countries and finally, Brazil, Mexico, Argentina, and Chile from the Latin-American periphery (Pulleiro, 2016a).
In 24 different sports between 1945 and 1991, twenty-three western countries organized more than 418 world championships, which accounts for nearly 70% of the total.
The international political context did not help at all as the 3 massive boycotts of 1976, 1980, and 1984 point out.
Colombia was chosen as host country in 1974, but the Colombian government claimed that it was impossible to meet the FIFA requirements about the stadiums, the railway, and hotel network and communication infrastructures.
For example, FIFA’s revenues have increased from $257 million in the 1995-98 period to over $5 billion in the 2011-2014 period (FIFA, 2015). At the same time, the Olympic Movement has increased the sponsorship incomes from $96 million in the 1985-1988 period to over $1 billion during the 2013-2016 period. About the Olympic broadcasting incomes, they have increased from $289 million of Los Angeles 84 to more than $4.1 billion in Rio 2016 (IOC, 2017c, p. 19).
And every kind of sports mega-event and international sports championship.
According to Nye, soft power is the ability to attract, co-opt, and shape the preferences of others in international politics through appeal and attraction rather than by coercion.
According to De Bosscher et al. (2015, p. 127), the organisation of Olympic Games increases the spending in elite sport. For example, after the IOC selected Rio as Olympic host, Brazil had a 96% increase in funding immediately afterwards. In this regard, the Plano Brasil Medalhas was part of a broader plan of the Brazilian government focused on the development of the sports mega-events (Mascarenhas, 2016).
Some projects cost as much as 10 times their original budget (Rohter, 2007).
In comparison, the average cost overrun of the stadiums for the FIFA World Cup 2018 in Russia–as of March 2015–is 138% (Müller, 2015c, p. 1122). For example, it was planned that the cost of the Fisht stadium in Sochi would be $225 million, but in 2018 the costs rose up to $779 million. According to Müller, in 2015 “the average cost per stadium was 58% higher than in Brazil” (Müller, 2015c, p. 1124).
Regarding transportation infrastructure projects, Matsuoka pointed out that in 2015, 20 of them did not even have 50% of their expenses paid.
The ex-ante studies, usually made by consulting firms hired precisely by organizing committees or interested parties, tend to use an inappropriate methodology or unrealistic assumptions, minimizing costs estimates and maximising revenues simultaneously in order to convince both local and national governments to support the Olympic or the World Cup bid.
About the future induced costs, the Sochi Olympics add up to “more than $1.2 billion per year, of which $400 million are for maintenance and more than $750 million for foregone revenue” (Müller, 2015b, pp. 645-646).
According to Golubchikov (2017, p. 247) the final costs would be $49.5 billion. He criticises the general perception towards the Sochi Olympics as a unique plan to raise Russia international image (Boykoff, 2013, p. 39; Zimbalist, 2016, p. 104), defending that “the modernisation of Sochi as a place, in conjunction with winter sport development, was prioritised” and achieved as “the predominant focus of the investment was on urban regeneration and infrastructural development” (Golubchikov, 2017, pp. 239-240, 248).
According to Gaffney’s research, in Rio de Janeiro the price variation in residential sales rose 243% between 2008 and 2014; with certain areas of Rio specially becoming part of the “global trend toward the transﬁguration of working-class areas into sites of capital accumulation and global consumption” (2016, pp. 36, 40)
There were athletes that pulled out from the Olympics declaring their fear to zika virus (Palazzo, 2016).
An activist journalism decentralised network specializing in real time broadcasting. It exists since 2011 and became known internationally for its coverage of the 2013 Brazilian social protests.
Called euphemistically “for the Purpose of Protecting Children from Information Advocating for a Denial of Traditional Family Values.”
The Principle 6 was changed after the Sochi Olympics. The new principle declares that “the enjoyment of the rights and freedoms set forth in this Olympic Charter shall be secured without discrimination of any kind, such as race, colour, sex, sexual orientation, language, religion, political or other opinion, national or social origin, property, birth or other status.” The new wording of Principle 6 includes sexual orientation or gender identity explicitly in the list of categories, but it is still very limited regarding its application, because only the host city, the Organising Committee, and the NOC (not the host state or its government), will be subject to the application of the Principle 6.
In the end, there was only a diplomatic boycott with a number of world leaders like Barack Obama, David Cameron, François Hollande, and Angela Merkel announcing that they would not attend the opening ceremony.
In 2017 there was an investigation within the IOC that would lead to the detention of Carlos Nuzman, the head of the Brazilian Olympic Committee. He was part of a bribery scandal by which Rio de Janeiro was selected as the host of 2016 Olympics (Kelner, 2017).
Accordingly, the 2024 Olympics will be held in Paris and the 2028 Olympics in Los Angeles. [A1]Is the quote verbatim or is this a translation to English from another language? In case it is a translation, please adjust this expression to “smallest amount”; otherwise please add “[sic]” after the word amounts to indicate this is the way it was originally written.
Is the quote verbatim or is this a translation to English from another language? In case it is a translation, please adjust this expression to “smallest amount”; otherwise please add “[sic]” after the word amounts to indicate this is the way it was originally written.
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How to cite this article: Pulleiro, C. (2020). The international legacy of sports mega-events in Brazil: Political and economic lessons for the semi-peripheral countries. Papel Político, 25. https://doi.org/10.11144/Javeriana.papo25.ilsm