Protests in Brazil bring to the fore genuine concerns about hosting the FIFA World Cup 2014

About 10 days ago, in a column for Sportskeeda, I had blown the whistle about the implications of the AIFF’s bid for the 2017 under-17 FIFA World Cup in view of the gross escalation of budget and corruption that had marred the 2010 Commonwealth Games in New Delhi.

The central government had cleared the AIFF’s bid after sanctioning Rs 95 crore for upgradation of stadia and an additional Rs 25 crore as a contingency for organizational expenses. It claimed in a press release that “AIFF and FIFA have agreed to bear the entire expenditure of hosting the tournament and “the amounts required are to be raised through sponsorships and other commercial agreements”.

However, revelations in the international media about the failed legacy of previous FIFA World Cups and other mega events like the Olympics, following the violent mass protests across Brazil during the ongoing FIFA Confederations Cup, a precursor to the 2014 FIFA World Cup, have lent credence to my concerns. The government of Brazilian President Dilma Rousseff of the Workers Party tried to quell the protesters with force but she was forced to relent and make conciliatory gestures in the face of a public relations disaster.

Some of the important issues that have been highlighted in the international media about the upcoming 2014 World Cup and other mega events are as follows:

1) Mega events have often provoked people’s protests for their gross distortion of priorities and wasteful expenditure, leading to violent state reaction. In 1968, thousands of students and workers marched against the hosting of the Olympics in Mexico City and hundreds were subsequently massacred by the government. Protests also marked the run-up to the World Cup in South Africa, though the African National Congress government managed to ride out the opposition to its vanity project.

2) A University of Oxford study has claimed that politicians “low-ball the budgets in order to get the Olympics” as it is “simply easier to get it approved”. This ruse avoids initial public resentment about anticipated costs. Politicians also claim that hosting the Olympics (or other mega sports events) is about creating a legacy. But the legacy that is created is often one of financial recklessness.

3) Every Olympic Games since 1960 has gone over budget (and probably every football World Cup too) by an average of 179%, Barcelona (1992) especially shooting past the barrier by a whopping $417 million. The recent London Olympics was the costliest ever at $14.8 billion. The phenomenal costs of staging the 2004 Athens Olympics exacerbated the economic crisis in Greece which eventually also threatened the entire Euro zone. The rampant inflation in India over the last couple of years and the spiraling prices of fuel, gas, public transportation etc., could well have been influenced by the excesses of CWG 2010.

4) One of the reasons why mega event budgets spiral out of control is that bidder cities/countries offer more sops or bigger budgets to score over their competitors. When Rio de Janeiro bid for the rights of the 2016 Olympic Games, it presented a $14.4 billion budget to the IOC, just a touch higher than the combined budgets for the three other finalists, said a report in The Globe & Mail.

4) Brazil could be hit by a triple whammy of over-the-budget disasters, beginning with the 2007 Pan Am Games hosted by Rio and followed by the 2014 FIFA World Cup and the 2016 Olympics. The initial estimate for the Pan Am Games was $177 million but it could have well cost ten times more. According to Luiz Fernandes, Brazilian sports ministry executive secretary, the initial budget for the 2014 World Cup has risen from R 25.5 billion ($ 11.4 billion) for stadia, urban transportation, improvements to ports and airports etc., to R 28 billion, almost three times more than it cost Germany to host the 2006 championship.

4) While under-stating expenses, politicians/sports officials also overstate revenues and projected benefits to the economy like investments in infrastructure, tourism, employment etc. In reality, expenditure outraces income by miles. University of Maryland sports economist Dennis Coates cites the example of the 1994 FIFA World Cup in the USA, when the bid committee predicted a benefit of $4 billion for the country, but the overall negative impact on the host city economies amounted to $9.26 billion.

By the end of 2010, South Africa reportedly regained only $505 million of the $4.5 billion it spent on building stadia and infrastructure for its World Cup according to official figures, said a report in the International Business Times.

5) Expected earnings from tourism from mega events are largely a chimera. Of the 450,000 foreign fans expected for the 2010 World Cup in South Africa, only 209,000 turned up, according to South Africa’s Tourism Minister Marthinius van Schalkwyk and the $900 million boost the ‘rainbow nation’ expected from tourism failed to materialize, reported The Telegraph.

A 2010 report of the European Tour Operators Association described the 2008 Beijing Olympics as “a toxic event that crushed normal demand, both business and leisure”.

The number of foreign tourists who visited the UK last August during the Olympics was about 150,000 less than those who came in the same month the previous year.

6) The infrastructure built for mega events often becomes a ‘white elephant’ or a millstone around the state’s neck, requiring huge expenditure on maintenance. One remembers how the infrastructure built for the National Games in Pune in 1994 went to seed and new infrastructure again came up at the same venue (Balewadi) to host the Youth Commonwealth Games in 2008.

The Athens Olympic Park is now a “ghost town” while the 91,000-seater Beijing’s Bird’s Nest has become a fairly popular tourist destination but can’t be put to regular use. Johannesburg’s $2.5 billion elite fast-train built for the World Cup has reportedly not broken even and still needs an $80 million annual subsidy to keep it chugging because the planners overestimated ridership by two-thirds. Durban’s new $1 billion King Shaka Airport remains a mostly desolate “aerotropolis” fantasyland, as none of the anticipated international hub traffic materialized.

7) There is only one winner in the economics of the World Cup, by several accounts, and that is FIFA. According to one account, the Zurich-based organization came into South Africa with $482 million as assistance for the event but walked out with a $1.9 billion profit, primary from its sponsorships, while the hosts ran up a bill of $4.5 billion. “So while South Africans are likely to be counting the costs of hosting a tournament that was supposed to help their economy, FIFA came away from Africa with their pockets full,” states Coates.

Patrick Bond, in a recent dispatch for Counter Punch magazine from Durban on the “Lessons for Brazil from South Africa, concurs:

“After egging us on to build hedonistic palaces, bullet-trains and airports while the vast majority here suffer so much, Blatter’s crimes against SA society and economy continue unpunished. His mafia took more than $3 billion in revenues back to Zurich without paying taxes or heeding exchange controls, and meanwhile the SA foreign debt soared from $70 billion just before the World Cup to $135 billion today…”

8) Brazilian icon Romario, the hero of its 1994 World Cup win, earlier supported the bid for the World Cup. But now the crusading and outspoken Congressman of the Brazilian Socialist Party (PSB), has become one of the staunchest critics. He blasted FIFA for announcing that it expects a profit of 1.67 billion euros from the 2014 event.

“I never thought the World Cup would solve all of our problems, but now my fear is that this mega event will only deepen the problems we already have,” he said. “FIFA comes to our country and imposes a state within a state. It’s not going to pay taxes, it’s going to come, install a circus without paying anything and take everything with it.”

Romario’s courageous stance (Rivaldo too has questioned the staging of the event while current players like Dante, David Luiz and Neymar have expressed solidarity with the protestors) is at variance with that of other local legends like Pele and Ronaldo.

The Brazilian situation perhaps has some lessons for us as well and should provoke more debate on our bid for the u-17 World Cup 2017.