Tag Archives: corruption

How Brazil Hopes to Get Rich off the 2014 World Cup

With less than two weeks left before the World Cup kicks off this summer in Brazil, all the attention has understandably been on the football side of things, with all participants playing warm-up friendlies to ready their squad for the tournament.

For the Brazilian government and footballing authorities, who have attracted criticism for repeatedly missing construction deadlines for the World Cup stadiums, perhaps the recent attention to the friendlies makes for a welcome respite.

After all, most of the coverage in the past year or so (this is an example from The Washington Post) has focused on the state of the host nation. (I wrote an article on that only a few months ago.)

But the public protests in Brazil have not gone unnoticed. In fact, the demonstrations that started during last year’s Confederations Cup have provided a controversial backdrop to the upcoming World Cup: How will officials be held accountable for the massive overspending they have committed in their preparations for the tournament?

It is imperative that there is an answer to how Brazil and its citizens stand to benefit from hosting a glamour tournament like a World Cup—not just from glory and hype alone.

Let’s take a look at how the 2014 host nation hopes to make money off the latest installment of the World Cup—but as we see, not all the hopes and proclamations may ring true.

 

Jobs and the Local Economy

 

Eraldo Peres/Associated Press

 

Brazil’s tourism minister, Vinicius Lages, told AFP, via Yahoo: “The Cup is not an economic panacea but a catalyst for Brazilian development. It was a key factor behind Brazil finally overhauling its infrastructure.”

The World Cup, he predicted, would add about $13.6 billion to the Brazilian economy—already the world’s seventh largest—in 2014 alone.

It doesn’t stop there.

report by Ernst & Young Terco on the social and economic impacts of the 2014 World Cup concluded that the tournament “should generate 3.63 million jobs/year and R$63.48 billion income for the population in the period 2010-2014, besides an additional R$18.13 billion in tax collections.”

EY’s projected impact on the national production of goods and services stood at R$112.79 billion, while the sectors most benefiting from the event—defined as economic activities with major increased output—were civil construction, food and beverage, business services, utilities, information services, and tourism and hospitality.

All of which sounds glamorous and sexy, but there have been contrasting reports on the actual long-term gains as a result of hosting the World Cup—and they aren’t quite as pretty.

Moody’s report on the impact of the tournament on different industry sectors concluded that “the 32-day event will provide short-lived sales increases that are unlikely to materially affect earnings and disruptions associated with traffic, crowding and lost work days will take a toll on business.”

Then there is the very real possibility that the “World Cup effect”—defined by IBTimes.com as the phenomenon of countries being more harmed economically from hosting the event, as seen from South Africa 2010—may take hold in Brazil.

Four years on, the same uncertain material benefits from a World Cup are still yet to be transparent. As cited in the IBTimes.com article,University of Maryland professor Dennis Coates noted that even the 1994 World Cup in the U.S.—claimed as one of the most successful and transformational ever—ended in an income reduction of $712 million for the average host city relative to predictions.

 

The Tourism Industry

 

Eraldo Peres/Associated Press

 

Vinicius Lummertz, Brazil’s national secretary of public policies, toldThe Rio Times last November of his optimism that Brazil’s tourism industry would stand to gain enormously from the World Cup:

We hope tourism in Brazil rises to a new level after the World Cup. With infrastructure improvements that increase the competitiveness of Brazil as a tourist destination, and the high exposure of the country abroad, I expect to see a significant increase in foreign tourists—but mainly more Brazilians traveling through Brazil.

The Tourism Ministry predicted that tourists home and abroad would spend R$25 billion during the tournament, when 600,000 foreign and three million Brazilian travelers are estimated to visit the country.

The massive spending on infrastructure by the Brazilian government in recent years in preparation for the World Cup has likely been to maximize the revenue the country can make during the tournament—and with an eye on the future as well.

The EY study quoted above addressed such needs for investment in order for tourism income to be realized:

Once the actions that are required to enable the country to capitalize on the opportunities generated by the World Cup are completed, the event may result in an increase of up to 79% in the international tourist inflow to Brazil in 2014, with even possibly higher impacts in subsequent years. In the period 2010-2014, that figure should be as high as 2.98 million additional visitors.

The tourist inflow directly and indirectly induced by the World Cup is expected to account for additional income up to R$5.94 billion for Brazilian companies.

Yet before Brazil can throw a metaphorical carnival to celebrate their upcoming economic benefits, a few sobering updates on the tourism front may dampen the mood.

According to Claire Rive of The Rio Times, “The tourism sector in Brazil has had to adjust their inflated estimates concerning the expected influx of tourists…leading to big discounts on local and international flights and accommodation during the tournament.”

The reduction in projected tourist numbers has led to discounts on airfare prices and package tours, while demand for accommodation has “substantially decreased and prices have decreased.”

 

And, of Course, Corruption

 

Eraldo Peres/Associated Press

 

That a World Cup involves staggering amounts of money and an opportunity for businessmen and government officials to make a quick buck is no surprise—and Christopher Gaffney, professor at Rio de Janeiro’s Federal University, agrees strongly.

“There’s collusion of the Brazilian governmental elite with the business elite, and the game is rigged in their favor,” Gaffney said(via Yahoo). “This was an opportunity to make a lot of money and that’s what’s happened.”

But adding to the depressing reality that corruption will form a huge proportion of Brazil’s money made from the World Cup is the astonishingly public manner in which the embezzlement has been carried out.

See the case of the lead builder of Brasilia’s Mane Garrincha Stadium, already the world’s second-most expensive football stadium.

The Associated Press ran a story this May alleging that Andrade Gutierrez, a construction conglomerate, and Via Engenharia, an engineering firm, made up a construction consortium that billed the government $1.5 million for the transportation of prefabricated grandstands for the Brasilia stadium—a fee that was initially thought to cost just $4,700.

Auditors pointed out that “wasteful cutting practices or poor planning added $28 million in costs,” while “$16 million was lost when Brasilia’s government inexplicably failed to enforce a fine against Andrade Gutierrez for a five-month delay in completion of the main portion of the stadium.”

According to Al Jazeera, the same firm made political contributions totaling $37.1 million after confirmation of which cities would be hosting tournament matches, and after it was awarded stakes in contracts totaling “nearly one-fourth of the World Cup’s total price tag,” four years after it contributed a measly $73,180 in municipal elections, a 500-fold increase.

Moreover, auditors found $275 million in alleged price gouging with just three-fourths of the $900 million Mane Garrincha Stadium project.

The most damning part?

“Funding for Brasilia’s stadium relies solely on financing from the federal district’s coffers, meaning every cent comes from taxpayers.”

What comes around, goes around.

 

This article first appeared on Bleacher Report.

English Football Weekly: Week 15 Recap; Everton’s Revolution; Match-Fixing Scandal

EPL Week 15 recap: A weekend of upsets

Not that an impressive 2-0 home win would’ve been at all upsetting for Fulham, but was it Rene Meulensteen at work on Craven Cottage on Sunday, or was it just another case of the “new manager syndrome”? Only time will tell, but the confidence—even arrogance—in the way the Cottagers set up against Aston Villa will bode well for their fight to stay in the Premier League, and marked a huge contrast to the soulless, dithering squad in the final days of Martin Jol. Even Dimitar Berbatov turned up to play. He might not be accustomed to the wrong end of the table, but he’ll be important in Fulham’s resurgence—hopefully.

It’s been a while since the Britannia has been regarded a fortress the way it was when Tony Pulis first took Stoke up to the Premier League. Back then, there were Rory Delap’s long throws and other manners of rugby football play. Now, there’s the maverick flair of Marko Arnautovic, the cultured finishing of Stephen Ireland—and apparently also the magician’s touch from Oussama Assaidi. An example of Stoke’s resolve and fight towards a mid-table place? Or a public appeal from Jose Mourinho to Roman Abramovich to land them a striker in the class of Radamel Falcao? Either way, much work to be done still.

Alan Pardew tried to offer some solace in his interview after Newcastle’s first win at Old Trafford in 41 years, but his smug grin, which has been doing the rounds on Twitter, will say all there is about what’s going on at Manchester United—and to an extent at Newcastle as well. For while United toil in ninth place, some 13 points off leaders Arsenal and seemingly having lost that famous comeback spirit, Newcastle have defied critics, predictions and a barren summer transfer window to storm into seventh place, just three points behind City in fourth and four points ahead of United. What a strange season it’s been.

There to take advantage of the dropping of points by Chelsea, Arsenal and Manchester City were Liverpool, who overcame a sloppy own goal and a 10-minute resurgence from West Ham to secure a 4-1 win. It’s been a few seasons since the Reds have found themselves still right in the mix in December, but the hard part is coming. Three formidable opponents and competitors, all away from home, will be obstacles to Liverpool finishing in the top four by the end of December. They’ll be hoping that Cardiff at home next weekend will provide some much-needed breathing space. Spurs, City and Chelsea will not be easy.

 

Young Everton are here to stay

There was never a chance Arsenal-Everton would’ve escaped mention on a weekly wrap; it was too exciting and unpredictable (see: “the perfect advert for the Premier League”) to leave out. But while football fans were expecting Arsenal to reaffirm their title credentials at the Emirates, instead we’ve come out of the game with a renewed appreciation of Everton and Roberto Martinez.

The manner in which Everton took their game to Arsenal was as impressive as it was audacious—possibly even ill-advised prior to kickoff. After all, Liverpool, having had quite a decent run of results this season, went defensive at the Emirates and still got battered. Surely Everton would’ve set up to defend a bit more, especially with Gerard Deulofeu on the bench?

Wrong. The difference between the Merseysiders is that the Blues have a far more industrious, dynamic and well-balanced midfield in comparison to the Reds, and it showed. There was Ross Barkley, brash and confident, taking on the likes of Aaron Ramsey and Mikel Arteta and strengthening his claims for a place on the plane to Brazil next summer. There was James McCarthy, working so well with Gareth Barry as the central midfield duo and largely nullifying the hitherto potent and unstoppable Arsenal attacking line. And there was Bryan Oviedo, who had impressed with goals in consecutive matches (including a famous winner against United), bombing down the flanks to such good effect that he might just render Leighton Baines a bit less indispensable.

It was a result, and a performance, to confirm that Everton aren’t now fifth in the league because of a fluke. It’s the start of a youthful revolution shaped by a young manager with a vision. The critics still have their knives out, of course, what with two key players and a secret weapon (Romelu Lukaku, Barry and Deulofeu) on loan, but that’s a concern best left for the summer—if it’ll still exist at all. If Everton qualify for Europe, they’ll be able to bring in a few good ones yet.

 

Match-fixing: The elephant in the room

So it appears match-fixing has finally arrived on English shores. The recent reports linking the Sodje brothers and the likes of DJ Campbell will have presented a huge step back for English football and the FA.

£70,000 for a red card? £30,000 for a yellow? Surely players on such lucrative salaries in the English game won’t even bat an eyelid, and surely the competitiveness of the Premier League and the Championship means that sporting integrity and the chance of glory should by default render match-fixing a useless force in England? Why would a player on £50,000 a week sell out for that?

As easy as it is to criticize someone for holding the above beliefs, it is a true pity—but a real necessity—that match-fixing has been revealed to affect the English game, even at the top level. It’s a pity because all along it’s seemed that English football was too competitive, too pure and too exciting to even consider the existence of corruption and the evil influences of money. And for a long time, this image was sustained.

But now that this news has surfaced, it’s come as a huge smack in the face, and many a pundit, follower and fan will be smacking his head out of sheer frustration at his own ignorance. Because given the amount of money in the global game—an amount which will only rise with time—what could possibly have made England immune to corruption? Where there’s money, there’s corruption: It’s a sad fact of professional sports, and now it’s all coming to light.

What’s important now is not to hide and be embarrassed about match-fixing in England, but for the government, the police and the FA to join forces and crack down on the antagonists. Heavy punishments should be issued for those found guilty, and points should be deducted—with relegation implemented—for teams that have been complicit, if it emerges that any might have been.

It’ll be a long, hard journey and will require active policing—even racism has apparently resurfaced in recent years—but it’s the only course of action that makes sense.

 

This piece was part of my weekly column on SWOL.co, where I take a look back at the weekend’s English Premier League and domestic cup action, related talking points and news surrounding English football at large.