Brazil May Not Be Ready For The 2014 World Cup (Or The Olympics)
Having just returned from Barcelona — a city that was immensely impacted by hosting the Olympics — I saw firsthand and heard in almost every story about the history of the city how hosting the Olympics helped transform the city by creating public beaches, cleaning up once dingy neighborhoods, and restoring a pride to a city that few who have visited in the past 20 years could hardly imagine hadn’t always been present.
Which makes recent news that many are predicting Brazil will be ill-prepared as host for the 2014 World Cup and the 2016 Olympics all the more disheartening. CNBC is reporting that Brazil is drastically behind schedule in its construction of the 12 stadiums in 12 different cities ahead of the World Cup, “nevermind airports, local transport and other infrastructure required for when 600,000 visitors descend upon the country.” To date, Brazil has not spent even one-third of the $20 billion in infrastructure spending earmarked for the event. And with the Olympics just two years later, many are wondering whether the Brazilian adage, “Why do today what you can do tomorrow?” is coming into play.
Many point to the root of the problem as financing, with concerns from the state-owned development bank BNDES that the stadiums are not financially self-sufficient and would lose money following the tournament. This compounded with the fact that in its initial bid, plans were for much of the financing to come from the private sector, a scenario that has not come true.
In an ominous warning, CNBC quotes Anand Hemnani, director of Madison Williams investment bank in Sao Paulo who warned that the World Cup is potentially going to be a disaster. “If you look at the state of our airports, the state of our highways and the state of our urban mass transit you’ll see that you simply cannot have more people using the system than we already have now, let alone the demand that comes in from these other events such as the World Cup and the Olympic Games.”
Here’s hoping for a strong second half from the Brazilian team.