Brazil Goes for Gold

Natalie Fallano

FIFA Logo taken from FIFA.com website.

The past few international sporting events have shown a pattern: they have all been hosted by developing countries. The 2008 Summer Olympics took place in Beijing China and the FIFA World Cup in South Africa. Rio de Janeiro, Brazil will host both the 2014 FIFA World Cup and the 2016 Summer Olympics.

Brazil is the largest country in Latin America, having the largest economy and arguably serving as the most important in the region. The past few years have shown economic surge including Brazil surpassing the United Kingdom for having the sixth largest economy in the world. In 2010 Brazil’s economy increased 7.5 percent in 2010, a record high since 1986 with the Domestic Growth Product (GDP) reaching 2.21 trillion U.S. dollars.

Brazil is estimated to invest 18 billion U.S. dollars to preparing Rio de Janeiro for the Olympics, which includes 14 billion U.S. dollars on infrastructure. The World Cup is projected to cost Brazil 5.2 billion US dollars, 120 percent greater than South Africa. Being the first Latin American country to host the country in history.

Official logo for 2016 Summer Games in Rio de Janeiro. MCT 2011

Former  Brazil president Luiz Inácio Lula da Silva told  the Olympic Committee and Businessweek.com that “Our rivals today have all hosted the Games in their countries before. For them, it will be just one more Olympics. For us, it will be an unparalleled opportunity.” Although they will be spending all this money on the games, they are hoping to not only make profit but bring in world wide investments and attention to their growing country and power.

But the question is: Are the Olympics profitable? A 2009 economic study at the University of California Berkeley showed that it all depends on the country. According to Andrew K. Rose, an economist at UC Berkley. “Countries that need to provide a credible signal to both domestic and foreign constituencies that they’ve decided to join the world and engage in economic and political integration can signal this by offering to bear the costs of a mega-event like the Olympics.”

Athens, Greece hosted the 2004 Summer Olympics and spent around 18 billion US dollars. Six years later, Greece’s economy collapsed, starting  the Eurozone crisis. This was partly due to uncontrolled government spending. The money spent on the Olympics contributed to this. Just because a country has money to spend on the Olympics, should they host?

A highly developed country like England which will host the 2012 Olympics in London this summer will not profit. The United Kingdom has the highest gross foreign debt of any European country. Chicago bidded for the 2016 Olympics as well and supported by President Barack Obama. With the current federal deficit, would American cities and their president really be focused on hosting the Olympics for eighth time?

Brazil on the other hand, may profit from future investment as well bring pubic attention to Latin America. But the Olympics Games and the World Cup? Now that is a big risk and a lot of money.