Brazil is one of South Americas fast-developing economies. The country is endowed with vast tourists attraction. The tourists mainly visit the country for the parks to see rare species of plants and animals uniquely in Manaus which is a city cut out of the Amazon (Santos and McKenna, 2016). There is a representation of the rich culture of the Dessana tribe which attracts a lot of attention from thousands of visitors from across the world. The country is also praised for its beautiful beaches in Rio de Janeiro and historical Minas Genas (Soares, 2017).
There are no doubts that the 2014 World cup and the Worlds Olympic in Rio 2016 contributed mainly to the growth of the economy. The two mega events propelled the creation of jobs, tourism and foreign investments (Shand, n.d.). Event companies grew by 24% while traveling agencies and promoters of the events increased by 21% and 15% respectively. Collected surveys and data showed that the tourism sector made billions of dollars and employed over 100,000 people between 2013 and 2016.More people were used for manual labor in the construction of the Olympic venues and also in the improvement of infrastructure in the cities where the events took place.
However, the preparation to host these mega-events come at a cost whose burden solely lies with the government. The Brazilian government was faced with issues of budget allocation and efficiently planning that was crucial in attempt to maximize the positive outcomes while minimizing the negative impacts that root from hosting search events where the country hosts more than a million tourists. The government was particularly under pressure to avoid an economic flop like the one Greece experienced in 2004 and Russia in 2014 (Green chemistry at the Rio Olympics, 2016).
In this paper, we will discuss in detail the socio-economic impacts of Rio 2016 to Brazil and opportunities and challenges on tourism in depth and the effect the policies had on the host cities and communities (Gold and Gold, 2012).We will evaluate the profitability of hosting Rio 2016 Olympics in which the government spent 13.3 Billion.
Socioeconomics Effects of Rio 2016
Brazil underwent remarkable socio-economic dynamics both before and after hosting the mega Olympics of 2016 and particularly in the city of Rio. The City and the country at large were under considerable scrutiny during the Olympics, and that demanded extensive media coverage (Fullman, 2015).The broadcasting media houses earned more than 4billion which was way more than the country made in 2014 during the world cup. The economy also profited from sponsorship deals that attributed to around 20% of the revenues which was estimated to be over $ 1B both from international and local sponsors (Aragao and Maennig, 2013). The Olympics significant sponsors were: Nissan, Coca-cola, McDonald's, and Samsung just to mention a few. The International Olympic Committee was responsible for controlling all the revenues that were generated, it retained 10% and distributed the rest on operations and handed over the excess to the Brazilian government (Olympics Lab in Rio, 2010).
However, these money could not cover all the capital stock that was required to be in place by the time of the Olympics (Gunter and Netto, 2015).Rio was not equipped with proper infrastructure for stadiums, telecommunication, transport nor sanitation, the budget went up to about 20B dollars. The government hid these costs because they told the locals that the budget would be funded privately (MacKenzie, 2016). The financial crises caused an expensive inflation on the citizens, and the country was in massive debt as the borrowed from the World Bank to meet the budget deficit. The expected boom in the gross domestic product did not happen; instead, there was a 3.5% decline. This is because only the infrastructure growth would be long-lasting or other boosts including tax revenue were terminated immediately the Olympic Games ended.
Economists had previously predicted a significant growth in the economy by 2022.The projection was $ 50 billion on returns on the investment done during the mega event. The profits could have intentionally been inflated by the multipliers used to calculate the gains of the enormous investment (Boykoff and Mascarenhas, 2016). However, this did not materialize; there is no significant improvement in the trade performance or public benefits. It instead facilitated the popularity of oligopoly in substantial investments in Rios economy. Oligopoly has a trickled down effect of oppression of the poor, creating a substantial polarization between the poor and the rich due to the inequality in wealth distribution.
The sponsorship of McDonalds and Coca-cola was by far the most disputed. There was a question of how an event tired to health and fitness would be sponsored by brands that contradicted the objectives of the development. However, the concept was quite debatable because the financial input was for a right course. The high international brands had a negative turmoil on the local names of fast foods as well as electronics (Semmuna.org, 2017). Sponsorship was risky for the small businesses because consumers have the notion that they are of better quality compared to the local brands. By default, the performance of the domestic market deteriorated as they are squeezed out by the international investors.
The government incorporation with the International Olympic Committee and other affiliated Organizations enacted the law that protected the copyright of the event sponsors. The government also put in place laws that protected the infringement of the name associated with the event (Lee and Wills, 1997). The bill was beneficial to the international brands but no beneficial to the local business as it prevented ambush marketing. Ambush marketing is a strategy that is mainly used by a new or small company where they coin their business name to look or sound similar to another brand that is already in existence and excelling in operations.
Rio de Janeiro expected to host 600,000 tourists with the likelihood of the number being exceeded. The overwhelming influx caused the government to rigorously extend their infrastructure. The local government needed to construct a high-speed bus lane that would be used to ferry people from the airport to the Olympic villages. The construction caused the eviction of over 77,000 residences of Shantytowns such as Favela. This is because over 1000 acres were needed to put up the transportation and sporting infrastructure. The outcome was a complete social distress among the locals who were left homeless after short notices of eviction.
The Brazilian government focused on installing proper pipes with virus and bacteria with the intention to control the Zika virus which cost them a fortune. However, adequate sanitation could not be maintained due to the overwhelming numbers that attended this mega event (Zimbalist, 2016). The pollution was not only an embarrassment to the global community with the green water in the pools but a burden on the Brazilians. The water was raw sewage, and experts claimed that the swimmers had a 99% chance of contracting infection if they consumed more than 50ml of the water (Lavigne, 2011). The health crises were a significant concern during the summer games with a number of the athletes and visitors falling ill. After the Olympics, the government failed to clean the lagoons near the Olympic stadium and was unable to install a treatment plant whose contaminated water caused the spread of water-borne diseases and odor in the city.
The massive influx of people demanded heavy security. Over 85,000 police officers were deployed in the city but only protected the foreign athletes and tourists who were in the upper scale part of the town (The Worldfolio, 2017). The skewness of security to the rich negatively impacted the people in the shanties of Favela because they got caught up in the incidents of robbery and shoot outs between the police and drug traffickers. The event left five people dead in Santa Maria which caused protests in the shanty against police brutality. The population was angered by the move by the government move to invest in the Olympics which was extremely expensive instead of directing funds to social security of the less fortunate and protective legal rights.
Rio Olympic facilitated some opportunities to the country. The most obvious was the influx of foreign tourist and encouragement in the investment of the infrastructure which will be a living legacy to the Brazilian Economy (Worldfinance.com, 2017). The buildup created lots of job opportunities and propelled the economic growth that resulted in increased government revenue.
However, many challenges were against the Rio Olympics, for instance, the Virus epidemic, rise in robbery and crime and the water pollution. It is impossible to host such a mega event and lack to have some negatives from the running of the game. Rio Olympics, for example, had a negative impact on the environment given the number of carbon emissions that were emitted by the transport carriers and carbon dioxide that was exhaled during the games which were estimated to be around 3 million tonnes (Farfan Gonzalez, 2013). However, the costs of this environmental pollution are not substantial. However, it is advisable that Rio invests in sustainable water supplies, an environmental friendly technology that will curb the carbon offsets in the future and maybe excel with the sustainable schemes.
Even with the boost of tourism, there was a significant challenge of the language barrier. Brazil is not a multilingual state (Vannuchi and Criekingen, 2015). Most of its citizens can barely speak in Spanish let alone English. The landmarks and other directions are in Portuguese which posed a significant difficulty to the athletes and visitors. Brazilians should embrace foreign languages which would ease up communication with foreigners.
Another hurdle that faced Brazil was the active system of acquiring a visa and the inadequate aviation infrastructure. The country could relax the method for obtaining a travel visa to attract more foreign tourists as well form the partnership with airlines and remove sanctions and heavy duties (Kulishkin, 2015). The reduction of tariffs will allow more airlines to invest in Brazil and therefore create more competition which will, in turn, facilitate the reduction of air tickets and inherently increase the number of foreign tourists.
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Aragao, T. and Maennig, W., 2013. Mega Sporting Events, Real Estate, and Urban Social Economics The Case of Brazil 2014/2016. SSRN Electronic Journal.
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Farfan Gonzalez, H., 2013. Management of water resources in protected areas. Berlin: Springer.
Fullman, J., 2015. The Olympics. London: Wayland.
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Green chemistry at the Rio Olympics. , 2016. C&EN Global Enterprise, 94(34), pp.48-48.
Gunter, U. and Netto, A., 2015. International travel to and from Brazil Overseas tourism as a luxury good and a status symbol. Tourism Economics, 22(5), pp.1151-1160.
Kulishkin, D., 2015. Socio-economic problems of the post-Olympic city development: the tourist aspect. On-line Journal "Naukovedenie", 7(3).
Lavigne, R., 2011. The political and institutional determinants of fiscal adjustment: Entering and exiting fiscal distress. European Journal of Political Economy, 27(1), pp.17-35.
Lee, R. and Wills, J., 1997. Geographies of economies. London: Arnold.
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