FIFA World Cup: Brazil’s Development Hopes

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Around the world, Brazil is known as the mecca of soccer. The country is loaded with magnificent soccer talent and has an electrifying atmosphere that makes soccer fanatics feel at home. Not to mention that Brazil has won the FIFA World Cup a record five times, and is the only country to have qualified for the World Cup every year since the tournament’s inception. One could not dream up a more soccer obsessed nation to host the 2014 FIFA World Cup that began this week. However, the current tension in the political, economic, and social atmosphere of Brazil has given the rest of the world an apprehensive feeling about this year’s tournament.

Political tension in Brazil has risen in recent years, as a majority of the county is unhappy with the government due to inflation, corruption, and the massive investment of public funds in World Cup preparations instead of Public Programs for the poor, who are in dire need. The estimated cost of the 2014 FIFA World Cup is currently at $11.5 billion. All this unrest comes at a time when Brazil has one of the most unequal wealth distributions in the world, currently entertaining a Gini Index of 54.7, along with a struggling economy. Some Brazilians hope that the World Cup will promote progress, while others worry that the event will push Brazil’s economy over the edge. It also gives rise to the question of whether the World Cup will only benefit the wealthy and further increase the gap between the rich and poor?

According to a recent survey by the Pew Research Center, 61% of Brazilians believe that hosting the World Cup will be detrimental to the economy as it diverts public spending away from public services. 67% also believe that the economy is in bad shape, which increased from 41% last year. Milton Hatoum, a writer from Manaus, asked: “Why does a city like Manaus need an expensive and luxurious stadium when a few meters away there’s a neighborhood, Alvorada, without sidewalks and treated sewage?”

The long-term social and economic effects of a mega-event such as the World Cup should be analyzed. To predict the path that Brazil may follow, it is helpful to take a look at the economic performance of similar World Cup host countries after the tournament. Their political, social, and economic atmospheres may vary, but this is the most direct and simple way to present the possible future outcomes for Brazil. The figures below display indicator data from the World Bank, showing the economic growth of  Argentina, Mexico, France, and South Africa since they hosted the tournament:

 

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It’s worth noting that Argentina, Mexico, and South Africa are more similar to Brazil’s economy and social structure compared to France. Argentina, Mexico, and South Africa all show a sudden rise in GDP Growth Rates, GDP, and GNI following their host year. In all four cases, the indicators suggest a short-term rise in GDP growth, followed by a decline. This gives rise to the heavily debated question of whether or not FIFA World Cup host countries see sustained long-term growth or temporary ripple effect growth following the event.

As we look ahead past this year’s FIFA World Cup, it will be interesting to see how Brazil’s economy fares. Our hope is that the result is a positive one, as the country’s economy is in need of repair. Hopefully the World Cup this summer gives the country’s economy a much-needed boost. At this point, the world will just have to wait and see.

 

 

Dark Clouds Hanging Over the Black Sea

Putin’s admiration for the Olympic flame

The Olympics have always been about stories and narratives. Athletes in sports, both obscure and relevant, represent their countries and play out the story of their nation, whether it be powerhouse nations raking in the medals or the simple story of the Jamaican bobsled team. The ability to host the event is also a story of the rise of a nation and the ability to show either one’s might or newfound brilliance on the world stage. Back in October 2013, we looked at how the story of the Sochi Olympic games were unfolding at that time. With the Winter Olympics beginning shortly, it was time revisit our intrepid heroes and villains.

One view of the Olympics has been as a giant vanity project, allowing Vladimir Putin and the Kremlin to evict Russian citizens from their homes, crack down on NGOs, gay rights activists, and roughly anybody that disagrees with the egregious cost of these games. To this list, it has recently been added that athletes will not be allowed to speak their mind, such as their displeasure at the anti-gay propaganda laws in Russia. OIC chair Thomas Bach has already stated that, though there is freedom of speech, athletes that speak their mind around the Olympic events will face punishment. The head of the Russian Olympics, Dmitry Chernyshenko, even contradicted this, saying that the athletes would only be able to express themselves at a venue far from the Olympic venues.

Skyrocketing construction costs for the Winter Olympics in Sochi

Censorship is not the only issue plaguing the Olympics. Despite seven years to prepare, and the assurances that 97% of the venues and hotels are prepared, there have been a large amount of pictures and tweets from journalists showing half finished rooms. One hotel didn’t have a reception area while another hotel wasn’t even completed. Considering that these games cost $51 billion, $11 billion more than the Beijing Olympics, the amount of corruption and ineptitude is starting to show more and more over the media. One road has cost $8.6 million, more than the whole Winter Olympics in Vancouver in 2010. This raises the question of whether or not these games are worth it. Supposedly, the infrastructure will stay and benefit the residents of Sochi, along with increased tourism. However, Allen Sanderson and Samantha Edds explored the question of whether Olympics have an economic impact, which they found that there is no evidence to support that.

A last branch in this narrative is a concern for the security of the event. IOC chair Thomas Bach has emphasized that these games will be safe. This mostly has to do with the massive amount of security surrounding Sochi. Roughly 40,000 security forces have been sent to the region around Sochi to prevent atrocities from happening. They have also erected a “Ring of Steel” around Sochi, with checkpoints and anti-aircraft batteries, to aid in this security. Part of the paranoia surrounding the events is that terrorist leaders in Dagestan and Chechnya located only 400 miles away, such as Doku Umarov, have already stated that they are going to target the Olympic games. The other cause for concern is the bombing in December 2013 in Volgograd, something that is considered to be a decoy to drag resources away from Sochi and make it more vulnerable. The Russians have gone so far as to contract out 400 unarmed Cossacks for the duration of the Olympics.

Security around the Winter Olympics in Sochi

Despite the lack of attendance by some world leaders, the world’s games at the Olympics will continue. One of the questions that will be asked is how much all this negative press hangs over the Olympics. What will be the effects of this event after the torch has been extinguished? This is a tale with many twists and turns, with more anti-heroes than heroes. At the least, everybody will be watching Sochi to see how the story unfolds.

Putin’s Russia and the IOC’s Olympic Charter: A Golden Chance to Enforce Human Right Principles

The Kremlin is doing itself no favors in attracting negative attention and enflaming external critics in its preparations to host the 2014 Olympic and Paralympic Winter Games in Sochi. The appearance of democratic institutions, pseudo-elections, and elements of press freedom have created a democratic façade that has long masked the Putin authoritarian model.  But with all eyes now on the host country, a sporting event that was supposed showcase a modern and dynamic Russia has drawn international attention to the injustices of its crony capitalist system and provides an unforeseen opportunity for the International Olympic Committee (IOC) to meaningfully enforce the human rights principles embodied by the Olympic games.

At a price tag of over $50 billion, the Sochi 2014 Games will be the most expensive in history. The transformation of Sochi from a secluded winter resort on the Black Sea to an Olympic host city and premier winter sports destination also comes with dire social costs at the expense of migrant workers, an already tabooed population. Over 16,000 migrant workers from Central Asia, Ukraine, and Turkey are earning between $1.80-$2.60 an hour working on corrupt pet projects. Sochi residents have been forcefully evicted from their homes as Olympic venues are erected in their back yards.

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Who Were the Biggest Winners (and Losers) in the Olympics?

The opening ceremony for London. 2012.

The conclusion of the 2012 Olympic Games in London offers an opportunity to reflect on the distribution of medals amongst participating countries. Most will look no further than the medal count standings to determine the most dominant countries in athletics. But is that an accurate way to judge a nation’s true performance? Many would argue that a casual glance at the medal winnings is unfairly skewed towards the bigger countries with larger populations, resources, and Olympic delegations. In response, analysts have taken into account numerous variables such as GDP, population, inflation, growth rate, unemployment, labor force, health expenditures, ex-host, and team size to provide adjusted indicators of Olympic success. Continue reading