The Summer Olympics in Rio de Janeiro present a historical logistical challenge for Brazil. These Olympics can be a valuable opportunity to overcome the economic crisis the country is currently struggling through. The government claims all preparations are in order for the event, despite evidence of risks facing its implementation. If the Games happen to suffer any unfortunate event, it could push Brazilians deeper into political mayhem.
The first issue Rio had to handle was the pollution in the Guanabara Bay, where the sailing events are expected to take place. The government has promised to treat 80% of the sewage water entering the bay, but reports state it only managed to treat 50%, leaving the pollution levels at alarming conditions. This situation could turn into a serious problem if athletes start to show signs of infection, or outright refuse to participate in the competitions once the Games begin.
A second topic concerning Rio is the delayed infrastructure projects for the Games. Although organizers say projects for the Olympics are “97 percent complete”, most of them are still closed and under construction. For example, an extension of the city subway is delayed and over-budget, with a planned completion just four days before the Olympics begin. Other projects have been completed with construction issues, putting in danger the lives of those using them. If the planned infrastructure projects are not ready for the opening day deadline, or if a tragedy occurs due to construction imperfections, the city and local authorities would be accountable.
Third, there is the security issue. The State of Rio is struggling with safety levels with a rate of 428 homicides per month, an average of 14 homicides a day. Additionally, official reports show there were 1,543 cases of rape in the first four months of 2016, averaging 13 rapes per day. French military intelligence recently said they have information about a Brazilian Islamist militant planning an attack on the French Olympic delegation. As a response to this situation, authorities are deploying 85,000 soldiers and policemen for the games, more than double of those used in the London 2012 Olympics. The federal government announced an extra $24 million for security expenses, although some policemen have complained about delayed salary payments and deplorable public accommodation.
The next issue concerning organizers is the Zika virus. Several athletes, including No. 4 golfer Rory McIlroy have pulled out due to the risks of getting infected with the virus. The North Korean delegation has stated that their athletes will wear long sleeve shirts and pants infused with insect repellent. The preventive caution of foreign athletes is understandable, since the mosquito-born virus has been linked to birth defects in infants. Nevertheless, the Brazilian authorities have said preventive measures are in place. Recent research has shown that men visiting Rio are 10 times more likely to be murdered, rather than getting infected with the Zika virus.
Finally, there is the financial issue. Despite being bailed out by the Federal Government with $850 million earlier in June, the organizing committee has recently stated it has a $122.4 million deficit from the total estimated cost $12.2 billion of the Olympics. This was supposed to be financed by the Federal Government, but since the agreement was made with former President Dilma Roussef, the new government has yet to confirm its will to comply. Financial shortage has contributed to infrastructure delays and budget cuts for the Olympic organization and for local public services, including police and fire departments. On June 27th policemen and firefighters carried signs at Rio´s international airport saying “Welcome to Hell”, warning visitors about the safety conditions in Rio due to the absence of salary payments in the past weeks.
In response to this, the State Government of Rio has declared a state of public calamity as a way to tighten its finances and pressure the Federal Government for more bailouts. It is also a way of facing the pressure of meeting Public Services expenditures. This political move may work in the short term, but the essential financial problem haunting the Olympics relates to the economic recession Brazil currently faces, its worst in 25 years. The GDP shrank by 0.3% in the first quarter, 5.4% compared to 2015. Goldman Sachs estimates the negative results will continue.
Brazil doesn’t have an easy task ahead. Some of the risks mentioned may materialize in catastrophic consequences for the whole country, affecting its foreign reputation and capital attraction. Hopefully, either private investors, who in the end are the big winners with the Olympics, or the Federal Government will end up financing the latest costs, enabling the event to unfold in normal conditions and serve as the ignition to the recovery process from the economic recession.