Political Mayhem Adds To Olympic Woes

Despite the optimistic expectations in 2009, when Rio de Janeiro was chosen to host the 2016 Summer Olympic Games, the competition in August is not likely to show Brazil in the best light.

The State of Rio de Janeiro provides striking illustration of the country’s fiscal struggles: With a primary debt of $30 billion, the state has not been able to pay even the salaries of its employees. Last June, it declared a “public calamity” and sought federal aid.

To make matters worse, the impeachment trial of president Dilma Rousseff, who is currently suspended, is expected to come to a head in mid-August.

“Instead of showing the best of Brazil, the Olympics will expose the country’s main failures,” says Pedro Trengrouse, an expert on sports events management for the Getulio Vargas Foundation. “There is no spirit of celebration in Rio.”

Rio has been hammered by recession as well as the financial failure of Petrobras and reduced royalty payments from oil exploration. According to Trengrouse, the Games gave Rio the chance to deliver infrastructure projects long sought by locals.

Some projects are completed. But others were abandoned, such as the depollution of Guanabara Bay, where sailing (but not swimming) events will take place. At least three of the construction works—the renewal of the old harbor, the subway line from Ipanema to the Olympic Park, and the Deodoro Sports Complex—are under corruption investigations, and may not be ready in time.

The state has cut 35% of its security budget for the Games, even though the city is known for street gangs—an Australian Paralympic athlete was recently robbed at gunpoint. The health system is collapsing while the Zika virus spreads. Health risks have already prompted some athletes, such as Northern Ireland golfer Rory McIlroy, to forgo competing.

“Rio is facing a perfect storm,” Trengrouse says.

As part of this “perfect storm,” the country’s political crisis may reach its peak during the quadrennial Games with the Senate’s vote on whether to oust impeached president Dilma Rousseff. Without a vote for removal, her suspension will end in reinstatement. Nobody can be sure of the outcome—or Brazilians’ response to it.

No surprise, then, that ticket sales have been mediocre, trailing sales for the 2012 London Olympics. After a $700 million cut to the event’s budget, Rio 2016 projects may ultimately cost Brazil’s taxpayers $7.5 billion—mostly financed by the federal banks.