On Oct 30th, 2007, Brazil was awarded the right to host the 2014 World Cup by the FIFA executive committee. Brazil has a storied history with the tournament, raising the championship trophy a record five times in its history. Despite this, they had not hosted since 1950. President Luiz Inacio Lula da Silva stated that “Organizing the World Cup is a huge task and we have far more responsibility weighing on our shoulders than when we arrive here.” Brazil was the only Latin American nation to submit a bid for the host rights.
Despite being home to 10 of the largest soccer arenas in the world, Brazil estimated they would need to invest around $1.1 billion into renovation efforts in order to house the number of fans expected to attend the event. Money for stadium renovation was supposed to come from private sources. The overall budget was set at $13.3 billion with this money being intended to go towards overall improvements on the infrastructure of the country, specifically the “overloaded” public transit. While there were promises that the World Cup would bring in positive social change, the public saw things in another light.
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Reuters. "World Cup 2014: protests break out in Rio de Janeiro and São Paulo."
Angry over massive government spending on the tournament, protestors took the streets in São Paulo and Rio de Janeiro throughout 2013 and into 2014. These demonstrations quickly turned violent after protestors began to disrupt traffic by blocking roadways. Police armed with batons charged protestors, and in some instances, threw tear gas and flash bombs into the crowds, injury a number of protestors and reporters on the scene. The protests provided a sobering image of the true political picture in Brazil during the early 2000's. Frustrations over the governments seeming inability to provide its citizens with certain public services boiled over when it money they thought should be going towards Brazilian citizens was then allocated towards accommodating foreign travelers. Their demands included political reform, and increased government spending in areas such as education, domestic health, and police reform. Furthermore, many demanded short term adjustments to working procedures, asking for a "World Cup Bonus" or decreased working hours during the tournament. These signs of civil unrest continued into the tournament proper, most significantly before the Brazil v Croatia group stage match, in which Brazil triumphed 3-1. This protest came just a short time after a strike at the air port in Rio de Janeiro, where workers blocked traffic in protest against their increased hours. Despite being one of the favorites to win the tournament, the Brazilian team was sent packing in the semifinals in spectacular fashion, falling 7-1 to eventual champions Germany. The loss was the worst Brazil has ever suffered, and was their first home loss in 62 competitive matches. The loss revealed several things about the team. First, they were overly dependent on their star, Neymar, who missed the match due to a back injury. Second, it revealed the impact that a corrupt domestic league had on the national team. In the last several decades, corrupt club owners had begun taking money away from player development (especially in the youth sides) in favor of lining their own pockets. This lack of transparency at home also serves to drive major players away from the Brazilian league, which is detrimental to the national team due to the differing styles of play in Europe.
After the loss, the response by the fans and the country as a whole was instantaneous and dramatic. The general reaction was one of depression, but reports of violence were not uncommon. Numerous reports of assault and theft came from Copacabana Beach, where a large viewing party had been held, and in São Paulo, several buses were lit on fire. Contrary to the claims of the government in the years leading up the the World Cup, the tournament failed to have any kind of real positive economic impact on the country and its people. In fact, the World Cup merely succeeded in raising the rate of inflation in the country and the price of consumer goods. Brazil spent around $15 billion US dollars in total on the cup, compared to the expected $13.4 billion it would bring into the Brazilian economy. Tourism alone was expected to bring in an $3 billion, and over 700,000 permanent jobs were due to be created. Also, hosting the World Cup was expected to create more long term tourist attraction to the country, and though this could still happen, as of now this increase has not materialized. In fact, many economic scholars have begun to discuss whether the heavy investment in the tourist section was valid or worth it.
On a less negative note, in the short term, the government was forced to invest in infrastructure such has public transport and sports specific infrastructure, though many point out that these improvements did not come to the areas that needed it most. In sum, the sheer cost of the World Cup appears to outweigh any kind of short term benefits. In preparation for hosting a World Cup, FIFA requires that the host country provide 8, 10, or 12 stadiums of a certain capacity. Brazil, much to the dismay of the public, decided on 12. This decision resulted in heavy spending on numerous locations in the years preceding 2014.
Not long after the World Cup ended, Brazil began to gear up to host the 2016 Olympic Games, resulting in even more spending. Due to sheer amount of spending, there was a heavy spotlight in the monetary side of the Cup, and it did not take long for people to notice discrepancies in the handling of some of the money. In the case of Maracaña, it was apparent that the companies in charge of renovations were guilty of overbilling the government to the tune of around 90 million US dollars, or 211 million reais. Specific instances of overfilling at the stadium include the roof, which cost twice as much as a similar one built in 2010, and the increase in the market price of the cement necessary to renovate the stands. Even more striking were the bills for the cranes used, which were simply billed twice. The company at fault, Odebrecht, was at the center of a major oil corruption scandal, and were ordered to return close to 200 million reais to the government. The case of the selection and renovation of Arena Corinthians as a World Cup host stadium was wrought with corruption from the start. First, the selection of this space over the larger stadium known as "Morumbi" was highly questionable as it would have required less work and thus less money. So why chose a stadium that would only inflame a public that was already upset about government spending on the tournament? In short, because of Ricardo Teixeira and his relationship with São Paulo FC, the team that calls Morumbi Stadium home. Teixeira has a long list of corruption accusations to his name, but in this case, his influence as the Chief of World Cup Operations until 2012 gave him the power to dictate the host stadiums. Teixeira's relationship with the owners of SPFC is anything but cordial, and though it has not been confirmed, it is widely assumed that this is a large reason Morumbi was not selected.
The money spent on Arena Corinthians was a massive slap in the face to those in São Paulo due partly to its location. While Morumbi is located in a more affluent part of the city, Arena Corinthians was constructed just miles from a large amount of favelas in the city. So while the government spent millions of a stadium to be used briefly, thousands more continued living on in poverty just miles away from the construction. Ricardo Teixeira choosing Arena Corinthians over more affordable options is just the tip of the iceberg when it comes to his corruption allegations. By the time 2015 rolled around Teixeira had been formally and informally accused of:
- Diverting funds from a friendly against Portugal in 2008 - Tax evasion - Money laundering - Misleading lawmakers - Accepting bribes from the marketing company ISL (this was a part of much larger FIFA investigation) - Attempting to bar journalists who portrayed him in an unfavorable light (sounds familiar...) - Altering the schedule of the tournament in order to fit his own better - Forgery - Fraud The former head of the CBF resigned from his post as the Head of the World Cup Organizing Committee in 2012, in the midst of being investigated for forgery and fraud concerning the many contracts that passed through his hands over the past several years. In total, Teixeira had a hand on nearly $400 million in FIFA cash during his tenure. If you thought the price of Arena Corinthians was high, buckle your seatbelts because the case of the Mane Garrincha Stadium in Brasilia makes all the others look like a drop in the bucket. The original budget for this stadium sat at 300 million dollars which was already a staggering figure given the amount of money being spent elsewhere in preparation for the Cup. The stadium ended up costing the public upwards of 900 million dollars in total. The investigation is still ongoing, but it appears that the increase came as a result of deliberately inflated prices on the part of the construction company.
The worst part: the stadium isn't used by a major club today. Brasilia, unlike São Paulo, does not have a top flight soccer club. This has relegated the stadium to a concert venue (a poor way to recoup the money spent on construction), and at times, a bus depot. Yes, you read that correctly, Brazil invested almost $1 billion into a really fancy bus station. So even though Mane Garrincha is the second most expensive stadium ever built, it's definitely the most expensive bus depot. You just can't make this stuff up. The scandal with Odebrecht goes significantly deeper than the World Cup, and involves nearly the entire continent of South and Central America (with a few African countries here or there). Here are the basics:
- Odebrecht is a massive construction conglomerate founded in the 1940's. - The company has been involved in numerous mega-projects in Latin America, such as the Caracas Airport, and several World Cup Stadiums. - They're also well known for their bribes to politicians, but the real issue was their involvement in Petrobras scandal. Basically, several companies, including Odebrecht, were found to have paid money to politicians for good contracts with the Petrobras oil company. - Over 75 people linked with the company are currently serving time for their roles in the scandal, which has come to be known as "Operation Car Wash." In terms of the World Cup, Odebrecht helped to renovate the Maracaña Stadium and the Arena Corinthians. Maracaña went $200 million over budget, and Corinthians went over by $100 million. Arena Amazonia and its construction were a logistical nightmare for Brazil, and three workers died in the process. The stadium overran its budget by $50 million, and was labeled "unacceptably dangerous" during its construction. Similar to Mane Garrincha, the stadium now sits in relative abandonment due to the lack of a professional side in Manaus. At one point, it was suggested that Arena Amazonia be converted to a jail.
Arena Pernambuco is one the few stadiums from the World Cup that has managed to maintain a fairly low profile in terms of corruption allegations. However, the stadium is significant as it was built in Recife, an area that is commonly referred to as developing. Rather than putting funds towards developing the city, the Brazilian government put millions towards a stadium that, shockingly, sits in relative disuse. Estádio Beira-Rio stands in the city of Porto Alegre. On the surface, renovating a stadium that is home to major club (Internacional) seems to be a smart investment, even if it is going to cost $150 million. Yet again though, the expense comes out seeming ill planned. In 2012 Proto Alegre erected the Arena de Grêmio to the tune of $280 million meaning there are now two massively expensive stadiums in a city with one team. |
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