Rio Golf Course a year later
July 27, 2017 Guanabara bay. (AP Photo/Silvia Izquierdo)

Eight months before the start of the Rio Olympics, I wrote a post entitled: “Brazil’s Olympian Challenge: Everything.”

Unemployment in Brazil was 10%. Inflation was 10%. Brazil’s credit rating was junk status. The currency had devalued by a third at that point in December 2015.

Guanabara Bay, where the boat competitions would take place, was getting horrific PR due to pictures displaying the filthiest waters you’d never want to wade through.

The president of Brazil, Dilma Rouseff, was in the process of being deposed for corruption, as news of the biggest corruption investigation in Brazilian history was splashed across the news headlines on a daily basis.

And I wrote all that even before the Zika Virus became a thing.

A year later, not all that much has improved in Rio de Janeiro.

As this good AP summary of Rio a year later states, you could say there was some good to come out of the Rio Olympics.

The Olympics left behind a new subway line extension, high-speed bus service and an urban jewel: a renovated port area filled with food stands, musicians and safe street life in a city rife with crime. These probably would not have been built without the prestige of the Olympics. But the games also imposed deadlines and drove up the price. A state auditor’s report said the $3-billion subway was overbilled by 25 per cent.

Guanabara Bay a year later
July 27, 2017 Guanabara bay. (AP Photo/Silvia Izquierdo)

But generally, the bad according to that article outweighed the good.

  • The Olympics left a half-dozen vacant sports arenas in the Olympic Park and 3,600 empty apartments in the boarded-up Olympic Village. Deodoro, a major complex of venues in the impoverished north, is shuttered behind iron gates.
  • A $20-million golf course is struggling to find players and financing. A few dozen were on the course on a recent, sunny Saturday. The clubhouse is mostly unfurnished, and it costs non-Brazilians 560 reals ($180) for 18 holes and a cart.
  • Since the Olympics, the bankrupt state of Rio de Janeiro has ceased major efforts to clean the bay, its unwelcome stench often drifting along the highway from the international airport. “I think it’s gotten worse,” Brazil’s gold-medal sailor Kahena Kunze said in a recent interview. “There was always floating trash, but I see more and more. It’s no use hiding the trash because it comes back. I figured it would get worse because I haven’t seen anything concrete being done.”
  • Some of the politicians behind the Olympics have been accused of graft, and organizers still owe creditors about $30 million to 40 million. Former President Luiz Inacio Lula da Silva, who wept when Rio was awarded the games, was convicted last month on corruption charges and faces a 9 1/2-year prison term. He is appealing. Former Rio de Janeiro Mayor Eduardo Paes , the local moving force behind the Olympics, is being investigated for allegedly accepting at least 15 million reals ($5 million) in payments to facilitate construction projects tied to the games. He denies wrongdoing.

The Rio Olympic organizers are still struggling under the weight of an approximate USD40 million debt. When the organizers appealed to the IOC for relief, the IOC replied no, saying “it had already contributed a record $1.53 billion to the Rio Olympics.

Fortunately, the Brazilian government was able to find more sympathetic ears in the British government. It was announced on August 1, 2017 that the British government would donate GBP80 million (over USD100 million) to Brazil, the ninth largest economy, to help “reduce poverty and fund economic development.”

Of course, it’s not all bad news.

At least Ryan Lochte, the American swimmer who lied about being robbed at gunpoint at a Rio gas station, was actually cleared last month of charges that he falsely communicated a crime to authorities.

Yay!

Advertisements
Posto da Torre
Posto da Torre in Brasilia, Brazil.

The Posto da Torre is a busy gas station in Brazil’s government seat of Brasilia. Before 2013, Posto da Torre (Tower Gas Station) was just one of many of gas stations in the capitol. After 2013, Posto da Torre became the symbol of corruption in Brazil.

A drug investigation by police into a money exchange shop located on the Posta da Torre property revealed that billions of dollars secretly skimmed from the accounts of Petrobras, Brazil’s state oil enterprise, as well as construction companies, were moved into the hands and accounts of Brazil’s most prominent politicians. In fact, over 100 of Brazil’s top politicians have been implicated in what is today called Operation Car Wash, known in Portuguese as Operação Lava Jato.

One of the more well-known names caught up in web of Operation Car Wash is former mayor of Rio de Janeiro, Eduardo Paes, whose name has appeared on lists of people receiving payments from construction companies, presumably related to the development projects for the 2016 Rio Olympics. According to this post from Inside the Games, Paes is alleged to have received over USD5 million from from engineering giant Odebrecht.

Paes, who ended his role as mayor at the end of 2016, has denied wrongdoing, calling allegations “absurd”.

Former Brazil President, Henrique Cardoso is also under investigation for taking bribes from Odebrecht, has spoken recently about Operation Car Wash and its significance. “Car Wash has played a very important role in Brazil because it lifted the lid, which was necessary. But that will not resolve things immediately. It is a process,” he said in this Reuters article. “How do you change a culture? With time and by setting a good example – there is no other way.”

An interesting aside: there is no car wash in Posto da Torre. As The New York Times cheekily point out, the closest this Brasilia gas stop has to a car wash is a laundromat. At any rate, it is money that gets washed, not cars. When politicians will come clean is anyone’s guess.

2004 Athens Olympics

Reports are that only 50% of tickets to the Summer Games in Rio de Janeiro, starting on August 5, have been sold. For the Paralympics in September, only 12% have been sold.

The Brazilian economy is shrinking during its worst recession in 25 years. The President of Brazil is under threat of impeachment for a decision to include an ex-President in her cabinet, someone under investigation for receiving bribes in the Petrobras corruption scandal. The Zika virus continues to spread in Brazil, a disease where there is now “strong scientific consensus” that it is a cause of microcephaly in newborns.

Those perhaps are the biggest factors that will result in many empty seats of a possible 7.5 million that are available for the Rio Olympics.

What’s interesting is that empty seats at Olympic Games is a recurring headache and embarrassment for Olympic organizing committees.

At the 2004 Games in Athens, “only about two-thirds of the 5.3 million tickets were sold“. At the 2008 Games in Beijing, organizers claimed that all 6.8 million tickets were sold, and yet empty seats blotted arenas throughout the Games. And at the 2012 Games in London, where pledge after pledge was made by organizers to fill the seats, and that “more than 20 million applications were made for the 6.6 million available seats”, the London organizing committee could not prevent the empty-seat phenomenon.

Empty Seats at Gymnastics Competition at London Games
2012 London Games

Athens and Rio share a common issue in that their economies may not be vibrant enough to drive local ticket sales. But Beijing and London do. Other factors are at play, resulting in tickets going unused. This article from The Guardian regarding empty seats at the London Games indicates that a few groups who are granted reserved seating, often the best seats in the house, just don’t show up:

  • Accredited members of the Olympic family, which include international sports federations, IOC officials and corporate sponsors,
  • Guests of corporate sponsors who receive tickets more for their affiliation with the sponsor and less regarding their interest in the Games
  • Members of the press, who may be less interested in heats and preliminary rounds
  • Athletes, particularly in the first week of the Games as all athletes are preparing or competing

Beijing pointed to another group – agencies that buy and re-sell tickets to people overseas or to people locally anticipating a spike in demand during the Games. Westerners in

Petrobras 3

Brazil is facing the worst economy in 25 years. The Zika virus is feeding fears, particularly for expectant mothers. And while the Rio Olympics are presenting an opportunity to shine the international spotlight on Brazil, the underclass are generally feeling that the only people who will benefit from the Games will be the fortunate rich and powerful.

And then, there is Petrobras, a government entity embroiled in a bid rigging scandal between officials in the state-owned energy company and construction companies that wish to win Petrobras projects. A secret cartel of construction companies work with Petrobras officials to select the construction company, purposely agree to exorbitant payments, after which the construction companies kick back payments back to the collaborating Petrobras officials, who use that money to fund friendly politicians, which is helpful for a state-owned organization. It is estimated that the scandal has resulted in over USD5 billion changing hands in various illegal transactions. That’s astounding.

Petrobras bidness 2

I have not done this explanation justice, which is why I want to point you to this very clear and effective explanation of the Petrobras Scandal, and the historical and political context, by Zach Beauchamp.

In Brazil right now, if anything can go wrong, it seems it will go wrong – just on the verge of commencing Brazil’s greatest party of them all, the Olympic Summer Games in Rio.

But one thing we can say about the Petrobras Scandal, something that Beauchamp points out at the end of his article. This scandal, which has been tabloid fodder for months in

sisyphus
Sisyphus

We’re only 8 months away from the launch of Olympiad XXXI. Olympic infrastructure plans are generally on time. Brazilians are generally excited. But the economy is taking a distinct dive.

Unemployment at nearly 10%, despite all of the Olympic-related construction, is the highest it has been in six years, when Rio was awarded the Olympics. Inflation is around 10%. The real has devalued by a third. Brazil’s credit rating dropped to “junk” status in September. And while international athletes will be flowing into Brazil next year, international investment has been flowing out of Brazil. This, as well as the plummeting price of oil in this petro-economy, have contributed heavily to the shrinking of the Brazilian economy again this quarter, the ninth quarter in a row.

The once booming member of the so-called BRIC economies (Brazil, Russia, India, China) is experiencing one of its worst economic crises in a while. How is this impacting the upcoming Olympics? There was a brief social media uproar when Rio Olympic officials announced the need to cut 30% of their budget, including air conditioning in the rooms of the Olympic Village, a decision that was quickly reversed after athletes balked.

It’s unclear what those cuts will impact, but big issues continue to concern…issues that will cost the country not only in expense but also in emotional well-being.

In addition to security in the areas of the Olympic activities, security along Brazil’s massive borders is a “big concern”, as a government auditor revealed “flaws” in the plans to control the 17,000 kilometer border that runs through remotes part of the Amazon and touches 10 other countries in Latin America.

The Associated Press has continued to test the waters planned for Olympic events and have found that “high viral and in some cases bacterial counts are found not just along shorelines where raw sewage runs in, but far offshore where athletes will compete in sailing, rowing and canoeing.” According to this AP article, Rio won the Olympic bid with a promise to clean up the city’s waterways, but “Brazilian officials now acknowledge that won’t happen.”

Garbage on the shore of Guanabara Bay_1June 2015
Guanabara Bay

 

On top of that, unprecedented levels of corruption in the government-