Why Rio de Janeiro?
FROM FAR AND NEAR - Ruben Almendras (The Freeman) - August 2, 2016 - 12:00am

In a few days, that is on August 5, the Games of the XXXI Olympiad or the Rio Olympics will start and will last up to August 21.

This will be held in Rio de Janeiro, Brazil which is the first South American country to host the Summer Olympics.

Rio de Janeiro, Brazil bided for this year's Olympics in 2007 competing with Chicago, Madrid, and Tokyo. It was awarded to Rio in 2009 after four rounds of voting. For the Olympics in 2020, Tokyo will be the host city. To be awarded to host the quadrennial Olympic games, the city has to prove that it has the financial and the physical resources to hold all the events in the summer Olympics.

The country and the city has to commit to spend hundreds of millions of dollars to upgrade existing sports venues and facilities and/or build new ones which should all be ready months before the games would start. It has to be specific for the sources of the financing with commitments from the local and national governments and the private sector as assurance that the funding for the infrastructures and the games itself are available.

In the case of Rio, 33 of the game venues will be held in Rio and five will be in other nearby cities of Sao Paulo, Salvador, Brazilia, and Bello Horizonte. Eight of the required venues are existing while another eight had to be built. An Olympic village to house most of the athletes had to be built from scratch which has all the amenities, including parks, pools, dining areas, and 10,000 air-conditioned rooms. The opening and the closing ceremonies and some of the major events will be held in the existing but refurbished Maracana stadium which can accommodate 75,000 spectators.

Over and above the stadia and arenas for the games, the whole city of Rio de Janeiro had to be spruced up. Roads and bridges have to be widened and repaired, some of the venues have to be fenced, water and electrical lines have to be laid, and they even built a new Tram line to make it easier for spectators to access the games.

Aside from the huge financial burden for the Games, which came at a time that Brazil is undergoing its third year of economic recession, Zika virus spreading in South America affected the games. Athletes from some countries are not participating for fear of the Zika virus, and it could also lower the expected attendance for the games and reduce the expected revenues from ticket sales.

Up to this time the organizers and the city are optimistic that the attendance will be good from within Brazil and the nearby South American countries and from the rest of the world. Rio even improved its sewerage system to eliminate the breeding grounds of the mosquitoes that are carriers of the Zika virus. This lead to a better and cleaner water in the Guanabara Bay which was polluted and elicited concern from the participants of the sailing and windsurfing events.

So Why Rio de Janeiro for the Olympics? In 2007, when they made the bid and in 2009 when they won the bid, Brazil was one of the emerging fast-growing economies. It is the (B) in the BRIC countries which were the emerging economies, the other countries (R) Russia, (I) India, and (C) China. The Gross Domestic Products (GDP) of these countries was growing at high single digit or double digit. The GDP of Brazil at that time was nearing $ 1 trillion and GDP per capita was $8,000.

Hosting a major world event is like a "debut" party to announce to the world that a country has reach the level of a developed country and can afford to host the Olympic Games.

In 2014, an economic recession hit Brazil and they were in the midst of preparing for the Olympic Games. This was compounded by the sudden drop in oil prices which had become an additional source of government revenues with their new discoveries of offshore oil deposits. Then the Petrobas corruption scandal happened. This involved government officials including previous President Lula da Silva and his successor President Dilma Rousseff. This led to the impeachment of Rouseff and the takeover of her Vice President this year leading to the Olympics. So we have political instability during an economic recession at the time Brazil was to show the world it has arrived.

I had spent two weeks in Rio de Janeiro, Brazil in 2009 and had been impressed by the country. It is a beautiful large country of over 200 million people with the economy (GDP) five times that of the Philippines. It is the fifth largest country in terms of population and land area. Adjusted for Purchasing Power Parity, Brazil's per capita GDP at $16,000 is also five times that of the Philippines. It has abundant forests, waterfalls and beaches like the Philippines, but it is five times bigger.

In the two Sundays that I was there, I went to church and went swimming in Copacabana and Ipanema. With my little Spanish I could follow the mass in Portugese and get around the market. The food was good, especially the meats and the women are beautiful. Sixty five (65) percent of the people in Brazil are Catholics and their form of government is federal-presidential. There are 26 federal states plus autonomous cities and they have an upper and lower houses of parliaments.

Even with all of their current problems including the Olympic Games, Brazil would still be a country to watch particularly by the Philippines. There are plenty of economic and political lessons that we can learn, now that we are also on a high single digit GDP growth trajectory, and we are embarking on a federal-parliamentary form of government.

 

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