Ticket sales soar, but legacy fears cloud soccer's World Cup
Brazil fails to learn lessons from South Africa's World Cup mess
View of the construction site of Itaquerao football stadium in Sao Paulo, Brazil on August 19, 2013. The Itaquerao Stadium will host the opening match of the Brazil 2014 FIFA World Cup football tournament on June 12, 2014. AFP PHOTO / NELSON ALMEIDA Nelson Almeida/AFP/Getty Images
SAO PAULO – When Brazil was awarded the right to host soccer's 2014 World Cup, the country's then Sports Minister promised that not a penny of taxpayers' money would be spent on building and refurbishing stadiums.
However, with only half of the venues ready – Brazil opted to play the tournament in 12 arenas, more than any World Cup in history – spending on their construction stands at around 7.6 billion reais (around $3.2 billion at the current exchange rate), roughly three times the original estimate. The vast majority of that cash has come from public coffers.
Brazil is expected to eventually spend close to $12 billion to host the world's premier sporting event. In addition to the spending on stadiums, almost $4 billion is earmarked for public transportation projects, and a further $3.5 billion has been set aside to modernize the country’s dilapidated airports. Security spending takes up $800 million, while improvements to ports requires $290 million, upgrading telecoms will cost $167 million and funding on tourism projects will total $83 million.
The massive outlay has inevitably drawn criticism in a developing nation plagued with problems of inequality.
"It's a big farce," Christopher Gaffney, a Rio-based U.S. professor of architecture and urban planning who is studying preparations for the World Cup, told Al Jazeera. "The only people benefitting from this are the big construction companies."
Overspending and under-spending are the key features of Brazil's preparations to host the biggest single sport event in the world.
The spending on stadiums is particularly controversial, and not only because it is already three times over budget. Organizers say they decided to build more venues in order to bring football to places like the Amazon, where the game is not popular but where hosting games would encourage tourism.
This public financing of Pharaonic works is not at all financially viable.
One result has been an outlay of $215 million to build a 44,000-seat stadium in Manaus, a city whose biggest local soccer team has average gates of less than 1,000 people. And Manaus is not the only such case. The federal government’s own audits court found that at least four of the 12 arenas are likely to be white elephants once the tournament is over.
"The (stadiums) are constantly late, the rise in costs is way over the top, and public money is being used to build them before they are handed over to private firms who reap the benefits," said the legendary Brazilian World Cup striker Romario, in a recent report written in his role as a federal legislator.
The government claims the stadiums will drive development in the surrounding communities, which will benefit from upgrades to roads, railways, hospitals and other vital infrastructure ahead of the tournament.
"They will be multi-purpose spaces that the cities have lacked before and now will have to use for several different purposes," Sports Minister Aldo Rebelo said in a conference call with sports reporters in June.
But government claims that no federal cash is being used to build the venues is disingenuous. The National Development Bank is giving loans to big construction firms at specially reduced rates. On top of that, multinational construction companies have so far received 461 million reais (around $192 million) in tax breaks.
Much of the other funding both for the stadiums and the areas around them comes from state and municipal governments. And some of the arenas will be handed over to private concessions at cut-price rates.
"This public financing of Pharaonic works is not at all financially viable," Amir Somoggi, a sports marketing consultant who works with some of Brazil's biggest clubs, told Al Jazeera. "We made a big mistake and our money is being thrown away."
The situation with the legacy infrastructure is even more troubling. Brazil certainly needs to upgrade its infrastructure, and not just because it's hosting the World Cup next year, and the Olympics, in Rio de Janeiro, in 2016.
With 40 million people having been lifted out of poverty since the turn of the century, more Brazilians can afford houses, computers, cars, domestic appliances and trips abroad. The country needs more airports, ports, highways, and public transport networks to cope with that massive growth spurt.
Yet, over that same period of rapid growth, Brazil has invested only around 18 percent of its GDP in infrastructure – less than Chile, Peru or Mexico, and around half the figure for fellow emerging economies China and India, according to Ricardo Amorim, a leading Brazilian economist.
The worry, now, is that Brazil won't be prepared to cope with the huge influx of fans expected to arrive at its airports, book into its hotels, and drive on its highways. More than half a million foreign visitors are projected to arrive for the World Cup, making their way through old airports and along run-down roads.
"It looks like we’ll have to guarantee a better way to connect the 12 World Cup cities," FIFA's Secretary General Jerome Valcke acknowledged to the Estado de S.P. newspaper in June.
Five of the 12 host cities have admitted their planning was so poor, or so late, that they won’t finish the bus lanes, metro lines or monorails they had promised to have ready for the tournament kick off next June.
Critics say the government is constantly lowering expectations of what Brazil will gain from the World Cup. Organizers need only have looked at the experience of South Africa, which hosted the tournament in 2010, to realize that Brazil's problems are as predictable as they were avoidable.
It is a textbook case of creating white elephants.
South Africa also needed stadiums and infrastructure, and it spent around $6 billion to prepare itself for the World Cup, Peter Alegi, co-author of a new book entitled Africa's World Cup: Critical Reflections on Play, Patriotism, Spectatorship, and Space, told Al Jazeera in an interview.
As in Brazil, the public spending was portrayed as likely to produce a lasting return for the whole country. Before the tournament began, FIFA and the Local Organizing Committee said the World Cup would boost South Africa's GDP by around 3%.
But the South African Finance Ministry admitted afterwards the true extent of the GDP bounce was just 0.4 %, Alegi said.
While FIFA walked away with a tax-free windfall of $2.4 billion, mostly from sponsorship agreements and the sale of television rights, South Africa made no more than $100 million, mostly from ticket sales, according to FIFA‘s financial statements.
And then there were the stadiums. Of the 10 that were built or renovated, nine are now white elephants. Only one is used regularly for South African soccer matches, and crowds there rarely reach four figures.
"It is a textbook case of creating white elephants," said Alegi. "The stadiums are just too large for local demand," adding that Cape Town had "cut funding to health clinics and food assistance to pay for a beautiful stadium."
Alegi questioned why any country, much less developing ones, would be so willing to take those risks.
"The only power the host nation has in this relationship is when the hosting agreement contracts are signed," he said. "Then once they are signed they are responsible for everything. The host nation essentially rents itself out to FIFA for carnival. Why aren’t they being more proactive or wiser? Why didn't Brazil learn from South Africa?"
No one doubts Brazil will host an unforgettable World Cup, least of all the fans. Tickets went on sale earlier this week and broke all records, with 2.3 million applications made in the first 24 hours.
The lucky buyers will see a spruced up Brazil. But the cost has been astronomical, while the long-term economic benefit for ordinary Brazilians is, at best, dubious.