Brazil strikes dampen World Cup optimism

Weeks away from the start of the World Cup, strikes and protests in Brazil have raised concerns over security during the tournament, and renewed public doubts about the wisdom of spending an estimated US$11 billion (including $4 billion on 12 new and renovated stadiums) on a event that will add, according to most economists, no more than 0.2 percentage points to the economy.

Earlier this week civil police forces in 17 states, including São Paulo, halted most activities to protest for better salaries and stricter laws. The head of the union told reporters that policemen were “tired of seeing criminals walk free three or four days after we arrest them.” The shutdown led to looting in several parts of the city – eventually quelled through the deployment of the national guard and army troops. Widespread strikes by bus companies, for similar grievances, resulted in mayhem on public transit networks as some 300,000 affected commuters struggled to find alternative transport. Earlier in the week, there were also strikes by teachers.

It is too early to say whether these protests will ultimately disrupt the World Cup. The 2012 London Olympics were threatened by striking unions and many doubts were voiced about the security arrangements. Most critics fell silent after the opening ceremony. In Brazil, however, the strikes and street protests suggest that public grievances over the government’s lavish spending on the tournament have been conflated with larger concerns about corruption and inflation. Last year more than 1 million people took to the streets – the largest protest the country had witnessed in decades.

With more than 500,000 tourists expected to descend on Brazil during the World Cup, the government is gambling simultaneously that longstanding security issues can be offset with extra manpower and that its substantial investments in upgrading public transit will pay off. The Brazilian Minister of Sports, Aldo Rebelo, gamely shrugged off concerns that the current unrest could disrupt the tournament and told an interviewer he expected the games to take place “in a party-like atmosphere and not in the middle of demonstrations and protests.” Even so, according to the BBC, the official tourist brochure advises visitors “don’t scream if you are being robbed.”

It hasn’t helped that former football stars like Zico and Pele have voiced doubts about the mismanaged budget. Pele expressed sympathy with the recent protests and noted that the money lavished on stadiums could have been better spent on schools and hospitals. However, he also criticised “what protesters are doing, which is breaking and burning everything. It’s money that we will have to spend again.”

More than anything, the current unrest in Brazil indicates how easily governments can become distracted by high profile events that often have no lasting impact. This is not a new problem: the Montreal Olympics, notoriously, made a loss of more than US$1 billion. It has, however, assumed much greater political significance in the context of Brazil’s recent economic decline. The national currency has lost almost a third of its value in the last three years and Petrobras, the state-owned oil company, has lost more than half of its market value in the last seven. With a widening trade gap and growing economic uncertainty, public opinion has been further inflamed by a series of corruption scandals. Understandably, the approach of the World Cup offers most unions, and citizens, an irresistible opportunity to air their grievances.

A successful World Cup in the Americas is extremely important for the entire region – not least because Rio is also set to host the Olympics in 2016 – but Brazil is likely to learn, as China did with the Beijing Olympics, that the successful administration of a major sporting event is rarely enough to compensate for failures of governance elsewhere.

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