July 15, 2014

No World Cup Bounce for Brazil’s President

By: Joseph Hammond

The stats speak for themselves. Brazil had never lost two games at home in 74 years. It had never trailed by four goals in any FIFA World Cup match. The 7-1 loss in particular is perhaps the most humiliating in the FIFA World Cup since Britain lost 1-0 to the United States in 1950 FIFA World Cup (which was also held in Brazil, coincidentally). The last time Brazil gave up 7 goals, in 1934, they fell 8-4 in a friendly defeat to Yugoslavia, when Yugoslavia was a monarchy and Brazil a fascist state under Getulio Vargas. Today, Brazil seen as an important emerging market and a BRIC country. Yet, despite its rise to prominence like Rio De Janeiro’s iconic Sugar Loaf hill, Brazil is viewed as a gentle giant.

The utter failure on the football pitch is symbolic that all is not well in the land of the Samba. It is symbolic of a many failings of the leftist government of  President Dilma Rousseff. Hosting mega-events can come with great peril. Dilma Rousseff had grandiose expectations for the World Cup, her leftist government hoped it would be little more than a big party for her Workers Party, ahead of the  October presidential elections.

She could have used a bounce. Under her administration, the country seen the country’s growth slow to its lowest rates in two decades and she recently faced down strikes from both police and teachers unions. Lost economic growth is what Fredric Bastiat would described as “unseen” consequences of her administration. Yet, while her administration has endeavored to sweep such failings under the proverbial soccer pitch, the World Cup put the countries failed governance front and center.

The tournament was beset by controversy from its earliest stages. In 2013, during the Confederations Cup, mass demonstrations were spontaneously held to protest the graft associated with the FIFA World Cup. Meanwhile, during construction, eight workers have died in building the 12 arenas used in the event as the country rushed to complete stadiums for the start of the tournament. Three days before the start of the tournament, during construction of the São Paulo Metro, a support beam collapsed killing one worker and injuring two others in what was meant to be a monorail connected to the stadium for the FIFA World Cup. On 3 July, an overpass under construction in Belo Horizonte as part of the World Cup infrastructure projects collapsed killing two people to death and injuring 22 others. A stadium at a cost of $300 million was built in a remote Amazon town, where it will likely become little more than a white elephant in the future.

The hosting of a FIFA World Cup cost Brazil some $14 billion, with FIFA officially spending another $4 billion. While the Brazilian public was told that private companies would fund half of the event, few private sector entities seemed willing to bet on Rousseff’s administration. The 2014 FIFA World Cup is the most expensive in the history of the event. The figure of $14 billion is more than double the $6 billion spent by Germany in hosting the 2006 FIFA World Cup.  Romário, who led Brazil to victory in the 1994 FIFA World Cup, called the 2014 FIFA World Cup “the biggest theft in history.” Romário believes the true cost of hosting the games maybe as high a $45 billion.  By comparison, Brazil spent $360 billion on health and education programs in 2014 — and, according to 2012 figures, had 18.6 percent of the population living below the poverty line.

Mega-events rarely provide the hosts with the economic benefits predicted by supporters, and instead becomes a focal point of corruption. The intersection of construction (the world’s most corrupt industry, by some accounts) and organized sports is, to use a Brazilian reference, where the Macarena stops. For example, the 2010 India Commonwealth games saw many issues similar to Brazil’s event in terms of collapsing infrastructure and other mishaps such as billings for $80 dollar toilet paper.  Not surprisingly, lobbyists often succeed in changing laws specifically for the hosting of mega-events. In 2003, Brazil passed a law banning alcohol at football stadiums to reduce violence and drunk-driving. Yet, no surprise that a special law was passed to allow Budweiser to be sold this summer at FIFA World Cup venues (Budweiser is the official beer of the event of course). Qatar host of the 2022 FIFA World Cup usually only allows the sale of alcohol in elite hotels but, for the right of hosting the 2022 FIFA World Cup gladly liberalized these rules.

Especially with the 2016 Summer Olympics around the corner, Brazil must learn the lessons of this event quickly. One source of inspiration may come from Romario himself. As a player, Romario was known for his austerity: quick touch ‘toe poke’ goals and energetic leadership. Qualities that Brazil’s current government seems to be lacking. In 1950, Brazil lost the World Cup final at home only to change its home kit. After these sharp defeats, the first on Brazil’s homesoil since 1975, many Brazilian fans burned their nation’s flag. But, more than cosmetic changes will be needed this time. For Brazilians the most iconic image of the tournament maybe Paulo Ito’s image of a crying child with only a football to eat. An image which should remind Brazil’s leaders the people expect better governance not parties.

Follow Joseph Hammond on Twitter. Image of police monitoring World Cup protesters courtesy of Big Stock Photo.