To what extent has hosting the Olympic Games benefitedBrazil’s economy? Introduction It is well documented that hosting the Olympic Games is afinancial landmark for any country, it implies that the country hosting thegames are financially stable and that the countries government is taking a stepin the right direction to making their country one of the world’s economicsuperpowers. However it could be argued that hosting the Olympic Games is onlya short-term gain not a long-term gain. For example in London the OlympicStadium used in the 2012 Olympics is now being used as the stadium for the WestHam Men’s football team, with West Ham Football Club paying £2.
5 million poundsin rent a year, making the Olympic Games seem to be a long-term gain forLondon. However in a country such as Brazil many stadiums, courses and venuesbuilt for the Olympic Games are now being abandoned for example, the venue forthe golf event is now partially degraded, showing that the Olympic Games can beseen as a short-term gain for Brazil. In this essay I am going to be assessingto what extent has hosting the Olympic Games benefited Brazil’s economy.
What is the Olympic Games? The Olympic Games is a sportingevent that occurs every four years in the summer and is hosted in countriesacross the world. To many people involved with the games who are competing orjust simply watching the games, it is the pinnacle of all sporting events. Thefirst Olympic Games ever hosted was in Olympia, Greece in 776 BC. However theOlympic Games stopped being hosted after 393 AC. It was then revived in 1896where it was hosted in Athens, Greece on the 6th of April and has since beenhosted every four years to this date, except from the years 1940 and 1944 dueto the Second World War. To host the Olympic Games a country must be able todemonstrate that they are able to handle the Olympics due to the influx ofpeople who come to the Olympic Games to either compete or watch. Furthermore acountry must be able to convince their residents that the Olympic Games will beeconomically beneficial.
These are only some of the factors required to beselected as a candidate city. The most recent country to host the Games wasBrazil in Rio de Janeiro in 2016. The Rio Olympic Games cost Rio a staggering4.58 billion US dollars. For a country to win the rights to host the Olympicsthey must be declared the winners by the IOC. The IOC was created on the 23rdof June 1984. The IOC generates revenue for the Olympic movement throughseveral major marketing programmes, including the sale of broadcast rights andThe Olympic Partner programme, more than 90 per cent of this income isredistributed to wider sporting movement, which means that every day the IOCprovides the equivalent of 3.
25 million US dollars to help athletes and sportsorganisations at all levels around the world. The president of the IOC isThomas Bach who was elected president on the 10th of September in 2013. The IOCis made up of 100 active members, 42 honorary members and 2 honour members. Inthis sporting event a total of 28 sports were contested in the 2016 SummerOlympics, these are sports such as Football, Basketball and Fencing. The mostsuccessful Olympian ever is Michael Phelps of the USA who was won 28 medals intotal in swimming, with 23 of the total 28 being gold. Finally the next summerOlympics has been confirmed to be hosted by Japan in Tokyo in 2020 with Japanbeating out competitors Spain and Turkey for the rights. Hosting the Olympic Games in Brazil had many economicpositives, such as a new record for the amount of people who visited Brazil in2016 which was 6.6 million international travellers, a 4.
8% increase comparedto 2015. This injected 6.2 billion dollars in to the Brazilian economy comparedto 5.84 billion in 2015. Furthermore it is said that the Olympic Games was therichest games in the 120 years since the first ever modern Olympics was hosted.
This was due to a number of reasons such as TV companies paying 4 billiondollars in total to screen the Olympics. In addition with the eleven globalsponsors, sponsoring the Olympic games having a combined market value of 1.5trillion dollars it is said that the games was expected to bring in a total of$9.3 billion in marketing revenues alone. These are sponsors such as Samsung,Visa and McDonalds who paid $120 million dollars to Rio’s organising committeewith America Movil another sponsor alone paying Rio’s organising committee $360million to secure a sponsorship.
However the Olympic Games also had economic negatives. Forexample since Brazil won the rights to host the Olympic Games in 2009 theUnemployment rate has fluctuated, as in 2009 the unemployment rate was 9.6% itthen went down to 6.8% 2014. It then went back up to a larger 11.3% in 2016.This as a result of less builders being required to build venues and infrastructurefor the Olympics as they had all been built.
Furthermore another negative isthat in 2009 Brazil had the fifth largest economy in the world, now in 2017Brazil have the eighth largest economy in the world. In addition anothernegative is that 22,059 families since 2009 were resettled to make way fortransport and infrastructure for the Olympic Games in 2016. The state of the Economy in Brazil before the Olympics The year was 2009, and Brazil had just been given the rightsto host the 2016 summer Olympics, they had the fifth largest economy in theworld and were gearing up to host the 2014 World Cup, the world was Brazilsoyster, so how did Brazil prepare for the games? It can be seen that before theRio Olympics was hosted, there were a number of economic negatives andpositives on the Brazilian economy. This can firstly be seen by the number ofpeople who were evicted to make way for infrastructure required for theOlympics. It was reported that 385 families were removed from a neighbourhoodin the north zone of Rio de Janeiro, to make way for a high speed bus lane.This can be seen as economically unethical when in Rio alone, 16.2 millionpeople earn 70 Reais a month (Brazil’s national currency) which is equivalentto a slim $1.30 US Dollars.
Furthermore it can also be said that the Braziliangovernment has taken a step in the wrong direction as the amount of people inRio who were already homeless was 5600 with 400 of these 5600 being children,in the latter years of these children’s lives they will be limited to what theycan achieve in the future and limited to what they can pay in taxes as a resultof the lack of education being taught. Due to 12 million people in Rio earningless than $1.30 a month and 5600 people in Rio being homeless it meant thatless people were able to pay respectable sums of money in taxes to theBrazilian government meaning the Brazilian government could invest less moneyin important things such as schools and hospitals showing that the Olympics didnot benefit the economy. However it could be said that the due to the RioOlympics there was an increase in the amount of jobs. This is firstly due to 14venues requiring construction such as the 400 room hotel and a temporarystadium for handball called ‘The Arena de Futuro’. As a result of this whenBrazil was given the rights to host the Olympics in 2009 the unemployment ratewent down every year up until 2014, it went from 9.6% in 2009 to 6.
8% in 2014.As a result of the influx in jobs from 2009 to 2014 the Brazilian economy wasable to benefit as from 2009 to 2015 the poverty rate was able to go from 6.2%to 4.3% implying that the Olympic Games had a positive effect on the economy inBrazil as less people would have needed financial aid from the government.However it can be seen through the unemployment rate largely increasing to over11% in 2016 which had previously been 6.8% in 2014, that the Olympic Games didnot benefit the Brazilian economy, this is due to a number of constructionworkers being fired as they were no longer required to build infrastructureneeded for the games.
This did not benefit the economy as it resulted in theGDP in Brazil being at its worst in seven years in 2016 at 1.7 billion USdollars. Overall I believe that the Brazilian economy did not benefit beforethe Olympics started, this is firstly due to the amount of people beingevicted, this will not benefit the economy in the long run as less people willbe injecting money into the economy through things such as house tax. Inaddition even though unemployment figures went down, the average wage in Brazilfrom 2009 to 2015 was consistently in the 2000 Reais Range which is equivalentto 400 a month in GBP. Furthermore the minimum wage in Brazil a month was 622Reais a month which was equivalent to 150 GBP in 2012. Whereas on average aperson in England earned 450 pound a week alone on average in England from 2009to 2015 and the minimum wage in England was 1300 a month in 2012, implying thatdue to necessities required for the Olympic Games such as venues, hotels andthe Olympic Park the Brazilian government was not able to ameliorate andincrease the minimum wage in Brazil showing that the economy in Brazil did notbenefit. The state of the economy in Brazil during the Olympics It was here, seven years in the making and the Olympics wasfinally in Rio so how did things pan out for Brazil? I believe during theOlympics there were a number of reasons to argue that the economy in Brazilbenefited. This can firstly be seen due to the Olympics being claimed to be therichest Olympics in 120 years, through 11 major sponsors paying 120 millioneach to sponsor the games.
This benefited the economy as it meant $1.3 billiondollars was made through sponsors alone as a result of this it meant theBrazilian government could start to pay off any debt created as a result of theOlympics or invest in important things such as hospitals and schools. Anotherreason the economy benefited was as a result of the amount of people whovisited Brazil increasing by 4.8% injecting 6.2 billion dollars into theBrazilian economy in 2016, ultimately benefiting the Brazilian economy as itmeans the government had more money to make financial advances such asincreasing the minimum wage. However it could be argued that the economy didnot benefit as a result of the Olympic Games.
This can firstly be seen as only88% of the more than 6 million total tickets had been sold in Rio de Janeiro,less than the London Olympic Games in 2012 and the Beijing Olympic Games in2008, due to this when the Games was coming to a close there were still 400,000tickets available for purchase, moreover undoubtedly one the highlights of theOlympics, the 100M final for the women had only 60% of the stadium full. Thisdid not benefit the economy as it meant that ticket prices were forced to bediscounted as a result of this less money was made from the Olympics whichcould have and should have been higher. Furthermore in 2016 Brazil was in itsworst recession in over 100 years as the economy shrank by 5.4%. This did notbenefit the economy as it could be argued that the Olympics was the catalyst tothis recession, this could explain as to why the ticket prices had to bereduced as many people in Brazil were unable to afford the tickets due to thisrecession which resulted in the unemployment rate going up to 11%. Overall Ibelieve during the Olympics in Brazil did benefit the economy as the Games madefinancial landmarks through sponsors such as Samsung.
In addition the OlympicGames benefited Brazil as it meant that the Brazilian Government was able toincrease the minimum wage in Brazil in 2016 to 880 Reais a month an increasefrom 2015 when the minimum wage was a 100 Reais less a month at 788. The state of economy after the Olympic Games A couple of months later, after the Olympics hype had dieddown and the people of Rio and Brazil had their normal lives back and I am nottalking about their regular day to day lives, I am talking about theirfinancial unstable life, as without the Olympics Brazil had gone back to their pre-Olympicways, seen through Brazil being hit with their worst recession to date in 2017,as the economy had contracted by 3.6% meaning it is now 8% smaller than it wasin December 2014. This shows the toll the Olympics no longer being in Brazilhad as 600,000 more people were now unemployed and struggling to find a job,furthermore as a result of the Olympics no longer being in Brazil it can beclaimed that this is the reason the Brazilian economy is now ranked the 8thlargest in the world in 2017 when it was previously fifth in 2009 showing thatthe Brazilian economy did not benefit after the Olympic Games.
Furthermore itwas reported that Brazil spent R$7.1 billion on building and renovating newfacilities for the Games, six months after the games had passed the venues areno longer being used as the venue for the Golf is now degraded and the OlympicPark is now completely deserted. This shows that the Brazilian economy did notbenefit after the games as billions of dollars was wasted on a two week event,money they will never get until Brazil next host the Olympic Games, whichprobably will not be for a long time as the Brazilian Government would havemost definitely learned their lesson that hosting the games will have seriousimplications if not managed smartly and properly. However it can be said thatthe economy did benefit after the Olympics this is because the minimum wage inBrazil a month increased again to 937 Reais in 2017.
This shows the economybenefited after the games as a result of tourism increasing and the sponsors ofthe games the Brazilian government were able to tackle one of the mostimportant issues in Brazil at this current moment in time as there is hugefinancial gap between the rich and the poor in Brazil. In addition it could besaid as a result of the Olympics being televised and in the media nonstop fortwo to three months trade links have improved as businesses and countries wouldhave been able to see the potential for their product to be sold in the Brazilmarket as in August of 2017 Brazil posted a trade surplus of $5.599 billion inAugust. This shows that the Olympic Games had benefited the economy in Brazilafter the Games as trade is improving resulting in the Brazilian governmenthaving more money at their disposable. Overall I believe that the economy didnot benefit after the Olympic Games as billions of dollars in infrastructure isnow no longer being used and is being left to rot in the centre of the mostpopular city in Brazil, creating visual population.
In addition I do notbelieve the economy benefited as jobs were lost in the transition of theOlympics leaving Brazil leaving the economy and people in Brazil in disarray.Furthermore I believe it did not benefit the economy as Brazil were in theirworst recession of all time beating the recession of 2016 after the games, eventhough Brazil are one of the main producers of the world’s most favourablecommodities such as coffee, rice and beef, showing what implications theOlympics had on the Brazilian economy. In addition it could be claimed that theBrazilian government were only able to improve the minimum wage as there wereless people to cater for as the unemployment rate increased, as a result of theOlympics no longer being in Brazil due to less builders being required. Did Brazil’s economy benefit as much as it should have fromthe Olympics? The 2012 Olympics was the most captivating event of thesummer of 2012, the eyes of the world was fixed on London non-stop for twoweeks. In a number of ways it can be claimed that the London Olympics benefitedthe British economy more than the Rio Olympics did Brazil. This can firstly bejustified with the use of the venues in London after the Olympics, venues suchas the Cooper Box Arena which was used for hosting the fencing and handball eventsin the 2012 Olympics, are now being used by the London Lions men’s basketballteam for team practices and competitive games. Another example is the AquaticsCentre which was used to host the swimming event at the 2012 Olympics Games,after the 2012 Olympic Games it was used by the British Paralympic swimmingteam to train for the 2016 Paralympic Games.
Moreover the Olympic Stadium, the mainsight of the Olympic Games is now being used by West Ham football club withWest Ham paying 2.5 million pounds rent a year. This shows that the British economywill benefit as they will be making money from the rent being paid and thetickets being sold for London Lions games.
Whereas after the Rio Olympics allbut the Maracana Stadium used by the Brazil men’s football team is no longerbeing used, showing that the Brazilian economy could have benefited more byusing the stadiums for sporting events and concerts to generate revenue.