Larger, costlier, riskier

Leaders take huge gambles in hosting the Olympics or World Cup. What do they get in return?

January 17, 2014 7:00AM ET
Construction continues of the Arena Amazonia stadium venue for the 2014 FIFA World Cup Brazil on Dec. 10, 2013 in Manaus, Brazil.
Shaun Botterill/Getty Images

When we talk about sports, our metaphors tend toward the martial: football players are “gladiators;” hockey players “battle” for the puck. Instead of world wars, we have sports tournaments in the same shape, sublimating international tensions into rivalries into concession sales. And with the World Cup in Rio and the Winter Olympics in Sochi, 2014 looks to be a sports version of what foreign policy analysts might call a “hot” year.

But while the victories and defeats will be symbolic and minimally bloody, these spectacles have very real costs. Russia is set to host the most expensive Olympic Games in history; at a projected price of $50 billion, the display of international unity is set to dwarf the annual GDP of most countries in the world. And there’s more than billions of dollars at stake: In Brazil at least four workers have died in rushed stadium construction, and the Cup has come to represent a government more interested in entertaining the rich than caring for the poor. International games are a highly contested honor and a hard-won prize for the host governments, but with global prestige comes exposure, and exposure is another word for risk. For today’s presidents, parliaments, and autocrats alike, the Olympics and their ilk — like contemporary statecraft — are more about managing internal risk than winning international competition. Losing face to international rivals on your home turf is bad enough, but losing to internal opposition or non-state actors can cost more than pride.

The risks

In 2008, analyst Will Jennings published a report called “London 2012: Olympic Risk, Risk Management, and Olymponomics” that actually makes no reference to athletics. In the report, Jennings suggests that the concept of risk has become central for host countries as the hosting burden has grown in size and scope: “The enormity of modern-day Olympics risk is a consequence of relentless growth in the scale and complexity of the Olympic Leviathan and its global profile,” he writes “combined with risks affecting the international political economy and the administration of modern sport.” Every time a host country promises to make this year’s contest “The best ever!” — and they always do — the spectacle gets bigger and more unwieldy.

Jennings separates Olympic risk into two categories: financial and geopolitical. Planning committees are also sales committees, so they tend to submit optimistic estimates, promising lasting infrastructure improvements that don’t survive the final budget crunch. Since the Montreal Games in 1976, the Olympics have been more expensive than planned. The same rule applies to the World Cup, where the Los Angeles Times reports public transportation projects have taken a back seat to stadiums so big they threaten to be single-use. A new 20,000-seat stadium could be a boon to a mid-sized city, but a 70,000-seat Olympic-size stadium is like giving someone a dining room table to furnish their studio apartment. Photographer Jamie McGregor Smith dramatized this particular problem with his project “Borrow, Build, Abandon”; he documented 22 venues built for the 2004 Beijing Olympics, of which only three were still in public use in 2012. When it comes to finance, sports spectacles have gotten so impractically large that their developmental function has dwindled. The risk isn’t whether Brazil and Russia will lose money, it’s how much they can afford to lose.

“Geopolitical risk,” on the other hand, is a euphemism for the chance that the line between symbolic and real war blurs and that the games heighten tensions instead of relieving them. When a country campaigns to host an international contest in the multi-billion dollar range, they build a giant platform for the preapproved message of global unity through friendly competition. But any spectacle of that size is a target for unapproved messengers, ranging from the gruesome (the bombing of Centennial Park in Atlanta in 1996) to the awe-inspiring (John Carlos and Tommie Smith’s black-fisted salute at the 1968 Games in Mexico City). “The global recognition of the Olympic brand and a worldwide television audience makes the Games a symbolic venue for international tensions, protests from dissidents, and terrorist threats and attacks,” Jennings writes. And the larger the audience, the stronger the brand, the bigger the risk.

An iron-fisted president is more appealing when he’s protecting your television spectacle.

Host nations have dealt with this risk in two ways: guns and insurance. Greece called in NATO to secure the 2004 Athens Games and bought $170 million in cancellation insurance. Reinsurer Munich Re estimated the 2012 London Olympics and the 2010 South Africa World Cup exposed the insurance industry to $5 billion each in cancellation liability. Meanwhile, the U.K. Home Secretary installed surface-to-air missiles on London city rooftops and South Africa dedicated over 40,000 police officers. No city wants to spend billions erecting a platform for terrorists or protesters, even if the metropolis is well insured.

In 2014, all geopolitics are local, and the biggest risks seem to be coming from inside the house. Vladimir Putin made international headlines with the strategic decision to free imprisoned opposition artists Pussy Riot ahead of the Games, but a Reuters report from earlier this month suggests Russian security forces are simultaneously cracking down on internal threats in anticipation. Though the international Olympic spotlight is supposed to encourage host countries to be on their best behavior, the IOC has played down the implications of Russia’s legislative gay-bashing, even as it targets tourists. Meanwhile, the Russian opposition, the Ukrainian opposition, and partisans of breakaway republics in the Federation’s west will all be working anti-Kremlin angles while the world’s camera are rolling.

In Brazil, the biggest geopolitical risk happens to be what national sports celebrations are designed to elicit: people in the street. Last summer, massive protests rocked the nation’s capital, forcing the government to rollback an increase in bus and metro fares. The general secretary of football’s international governing body, Fifa’s Jerome Valcke was curiously candid in an interview with the BBC about what the World Cup represents for demonstrators: “For them, it's the best time. For me, it's the wrong time." But organizers aren’t the only ones preparing. Protesters have been referring to the World Cup for months; “ABRAXIA A TARIFA E PÕE NA CONTA DA FIFA” (Lower the fare and put it on Fifa’s tab) read one sign from June. For this year’s demonstrators, the old chant “THE WHOLE WORLD IS WATCHING” has never been more accurate.

The rewards

Given all the risks, it’s hard to imagine why countries fight so hard for a prize they might well be better off without. For so-called “emerging economies” like Brazil and Russia — the first half of the Davos-friendly “BRIC” acronym, followed by India and China — it’s an even more dubious proposition. Why take on a risky multi-year project that’s almost certain to lose money? But global competitions serve as debutante balls for would-be world powers, a coming-out party for the international stage. A nation’s credibility is measured in debt capacity, so what better way to prove you’re a player than dropping a few billion on a party?

No one has won more World Cups than Brazil, but the country hasn’t hosted since 1950, and never under a civilian president. In the midst of Fifa’s worries about street demonstrations, left-wing President Dilma Rousseff has been happy to tell the international community what it wants to hear, even as she becomes a protest target. Rousseff didn’t sound like a former Marxist guerrilla when addressing the nation: “All institutions and public safety bodies have the obligation to curb, within the limits of law, all forms of violence and vandalism.” In South America, where one step too far to the left means U.S. opposition, both covert and overt, the Cup is a chance for the Brazilian administration to prove to the world market it can handle some protesters.

Russia will not only host the Olympics, but the next World Cup in 2018 as well. Since his reelection to the top post, legitimacy has been in shorter supply for Putin than power. The former-spy-in-chief has shown himself willing to handle internal threats without the nuance and discretion common to most host countries. But hosting international games means everyone has some skin in the game when it comes to the Russian security state; an iron-fisted president is more appealing when he’s protecting your television spectacle. Given the choice between boycotting the games and lending tacit approval to the Putin administration, no one has chosen the former.

Guns can reduce and insurance can hedge, but there’s no way to eliminate risk. The recognition that Russia and Brazil seek could come at too high a price as they build their stadiums on foundations of popular discontent. Governments compete to host events like the Olympics and the World Cup ultimately because of the good feelings that athletics arouse, but in this time of constantly negotiated crisis, even patriotic fervor is a threat. Former Egyptian President Hosni Mubarak was one hell of a cautionary tale, and in 2014 there isn’t a leader in the world who can feel totally safe when people and cameras crowd the streets. Even when it’s just a game.

Malcolm Harris is an editor at The New Inquiry and a writer based in Brooklyn.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera America's editorial policy.

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