To summer and is hosted in countries across

To what extent has hosting the Olympic Games benefited
Brazil’s economy?

 

Introduction

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It is well documented that hosting the Olympic Games is a
financial landmark for any country, it implies that the country hosting the
games are financially stable and that the countries government is taking a step
in the right direction to making their country one of the world’s economic
superpowers. However it could be argued that hosting the Olympic Games is only
a short-term gain not a long-term gain. For example in London the Olympic
Stadium used in the 2012 Olympics is now being used as the stadium for the West
Ham Men’s football team, with West Ham Football Club paying £2.5 million pounds
in rent a year, making the Olympic Games seem to be a long-term gain for
London. However in a country such as Brazil many stadiums, courses and venues
built for the Olympic Games are now being abandoned for example, the venue for
the golf event is now partially degraded, showing that the Olympic Games can be
seen as a short-term gain for Brazil. In this essay I am going to be assessing
to what extent has hosting the Olympic Games benefited Brazil’s economy. 

 

What is the Olympic Games? The Olympic Games is a sporting
event that occurs every four years in the summer and is hosted in countries
across the world. To many people involved with the games who are competing or
just simply watching the games, it is the pinnacle of all sporting events. The
first Olympic Games ever hosted was in Olympia, Greece in 776 BC. However the
Olympic Games stopped being hosted after 393 AC. It was then revived in 1896
where it was hosted in Athens, Greece on the 6th of April and has since been
hosted every four years to this date, except from the years 1940 and 1944 due
to the Second World War. To host the Olympic Games a country must be able to
demonstrate that they are able to handle the Olympics due to the influx of
people who come to the Olympic Games to either compete or watch. Furthermore a
country must be able to convince their residents that the Olympic Games will be
economically beneficial. These are only some of the factors required to be
selected as a candidate city. The most recent country to host the Games was
Brazil in Rio de Janeiro in 2016. The Rio Olympic Games cost Rio a staggering
4.58 billion US dollars. For a country to win the rights to host the Olympics
they must be declared the winners by the IOC. The IOC was created on the 23rd
of June 1984. The IOC generates revenue for the Olympic movement through
several major marketing programmes, including the sale of broadcast rights and
The Olympic Partner programme, more than 90 per cent of this income is
redistributed to wider sporting movement, which means that every day the IOC
provides the equivalent of 3.25 million US dollars to help athletes and sports
organisations at all levels around the world. The president of the IOC is
Thomas Bach who was elected president on the 10th of September in 2013. The IOC
is made up of 100 active members, 42 honorary members and 2 honour members. In
this sporting event a total of 28 sports were contested in the 2016 Summer
Olympics, these are sports such as Football, Basketball and Fencing. The most
successful Olympian ever is Michael Phelps of the USA who was won 28 medals in
total in swimming, with 23 of the total 28 being gold. Finally the next summer
Olympics has been confirmed to be hosted by Japan in Tokyo in 2020 with Japan
beating out competitors Spain and Turkey for the rights.

 

Hosting the Olympic Games in Brazil had many economic
positives, such as a new record for the amount of people who visited Brazil in
2016 which was 6.6 million international travellers, a 4.8% increase compared
to 2015. This injected 6.2 billion dollars in to the Brazilian economy compared
to 5.84 billion in 2015. Furthermore it is said that the Olympic Games was the
richest 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 billion
dollars in total to screen the Olympics. In addition with the eleven global
sponsors, sponsoring the Olympic games having a combined market value of 1.5
trillion 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 committee
with America Movil another sponsor alone paying Rio’s organising committee $360
million to secure a sponsorship.  

 

However the Olympic Games also had economic negatives. For
example since Brazil won the rights to host the Olympic Games in 2009 the
Unemployment rate has fluctuated, as in 2009 the unemployment rate was 9.6% it
then 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 infrastructure
for the Olympics as they had all been built. Furthermore another negative is
that in 2009 Brazil had the fifth largest economy in the world, now in 2017
Brazil have the eighth largest economy in the world. In addition another
negative is that 22,059 families since 2009 were resettled to make way for
transport 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 rights
to host the 2016 summer Olympics, they had the fifth largest economy in the
world and were gearing up to host the 2014 World Cup, the world was Brazils
oyster, so how did Brazil prepare for the games? It can be seen that before the
Rio Olympics was hosted, there were a number of economic negatives and
positives on the Brazilian economy. This can firstly be seen by the number of
people who were evicted to make way for infrastructure required for the
Olympics. It was reported that 385 families were removed from a neighbourhood
in 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 million
people earn 70 Reais a month (Brazil’s national currency) which is equivalent
to a slim $1.30 US Dollars. Furthermore it can also be said that the Brazilian
government has taken a step in the wrong direction as the amount of people in
Rio 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 they
can achieve in the future and limited to what they can pay in taxes as a result
of the lack of education being taught. Due to 12 million people in Rio earning
less than $1.30 a month and 5600 people in Rio being homeless it meant that
less people were able to pay respectable sums of money in taxes to the
Brazilian government meaning the Brazilian government could invest less money
in important things such as schools and hospitals showing that the Olympics did
not benefit the economy. However it could be said that the due to the Rio
Olympics there was an increase in the amount of jobs. This is firstly due to 14
venues requiring construction such as the 400 room hotel and a temporary
stadium for handball called ‘The Arena de Futuro’. As a result of this when
Brazil was given the rights to host the Olympics in 2009 the unemployment rate
went 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 was
able 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 in
Brazil as less people would have needed financial aid from the government.
However it can be seen through the unemployment rate largely increasing to over
11% in 2016 which had previously been 6.8% in 2014, that the Olympic Games did
not benefit the Brazilian economy, this is due to a number of construction
workers being fired as they were no longer required to build infrastructure
needed for the games. This did not benefit the economy as it resulted in the
GDP in Brazil being at its worst in seven years in 2016 at 1.7 billion US
dollars. Overall I believe that the Brazilian economy did not benefit before
the Olympics started, this is firstly due to the amount of people being
evicted, this will not benefit the economy in the long run as less people will
be injecting money into the economy through things such as house tax. In
addition even though unemployment figures went down, the average wage in Brazil
from 2009 to 2015 was consistently in the 2000 Reais Range which is equivalent
to 400 a month in GBP. Furthermore the minimum wage in Brazil a month was 622
Reais a month which was equivalent to 150 GBP in 2012. Whereas on average a
person in England earned 450 pound a week alone on average in England from 2009
to 2015 and the minimum wage in England was 1300 a month in 2012, implying that
due to necessities required for the Olympic Games such as venues, hotels and
the Olympic Park the Brazilian government was not able to ameliorate and
increase the minimum wage in Brazil showing that the economy in Brazil did not
benefit.

 

 

The state of the economy in Brazil during the Olympics

 

It was here, seven years in the making and the Olympics was
finally in Rio so how did things pan out for Brazil? I believe during the
Olympics there were a number of reasons to argue that the economy in Brazil
benefited. This can firstly be seen due to the Olympics being claimed to be the
richest Olympics in 120 years, through 11 major sponsors paying 120 million
each to sponsor the games. This benefited the economy as it meant $1.3 billion
dollars was made through sponsors alone as a result of this it meant the
Brazilian government could start to pay off any debt created as a result of the
Olympics or invest in important things such as hospitals and schools. Another
reason the economy benefited was as a result of the amount of people who
visited Brazil increasing by 4.8% injecting 6.2 billion dollars into the
Brazilian economy in 2016, ultimately benefiting the Brazilian economy as it
means the government had more money to make financial advances such as
increasing the minimum wage. However it could be argued that the economy did
not benefit as a result of the Olympic Games. This can firstly be seen as only
88% 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 in
2008, due to this when the Games was coming to a close there were still 400,000
tickets available for purchase, moreover undoubtedly one the highlights of the
Olympics, the 100M final for the women had only 60% of the stadium full. This
did not benefit the economy as it meant that ticket prices were forced to be
discounted as a result of this less money was made from the Olympics which
could have and should have been higher. Furthermore in 2016 Brazil was in its
worst recession in over 100 years as the economy shrank by 5.4%. This did not
benefit the economy as it could be argued that the Olympics was the catalyst to
this recession, this could explain as to why the ticket prices had to be
reduced as many people in Brazil were unable to afford the tickets due to this
recession which resulted in the unemployment rate going up to 11%. Overall I
believe during the Olympics in Brazil did benefit the economy as the Games made
financial landmarks through sponsors such as Samsung. In addition the Olympic
Games benefited Brazil as it meant that the Brazilian Government was able to
increase the minimum wage in Brazil in 2016 to 880 Reais a month an increase
from 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 died
down and the people of Rio and Brazil had their normal lives back and I am not
talking about their regular day to day lives, I am talking about their
financial unstable life, as without the Olympics Brazil had gone back to their pre-Olympic
ways, 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 was
in December 2014. This shows the toll the Olympics no longer being in Brazil
had 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 be
claimed that this is the reason the Brazilian economy is now ranked the 8th
largest in the world in 2017 when it was previously fifth in 2009 showing that
the Brazilian economy did not benefit after the Olympic Games. Furthermore it
was reported that Brazil spent R$7.1 billion on building and renovating new
facilities for the Games, six months after the games had passed the venues are
no longer being used as the venue for the Golf is now degraded and the Olympic
Park is now completely deserted. This shows that the Brazilian economy did not
benefit 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, which
probably will not be for a long time as the Brazilian Government would have
most definitely learned their lesson that hosting the games will have serious
implications if not managed smartly and properly. However it can be said that
the economy did benefit after the Olympics this is because the minimum wage in
Brazil a month increased again to 937 Reais in 2017. This shows the economy
benefited after the games as a result of tourism increasing and the sponsors of
the games the Brazilian government were able to tackle one of the most
important issues in Brazil at this current moment in time as there is huge
financial gap between the rich and the poor in Brazil. In addition it could be
said as a result of the Olympics being televised and in the media nonstop for
two to three months trade links have improved as businesses and countries would
have been able to see the potential for their product to be sold in the Brazil
market as in August of 2017 Brazil posted a trade surplus of $5.599 billion in
August. This shows that the Olympic Games had benefited the economy in Brazil
after the Games as trade is improving resulting in the Brazilian government
having more money at their disposable. Overall I believe that the economy did
not benefit after the Olympic Games as billions of dollars in infrastructure is
now no longer being used and is being left to rot in the centre of the most
popular city in Brazil, creating visual population. In addition I do not
believe the economy benefited as jobs were lost in the transition of the
Olympics leaving Brazil leaving the economy and people in Brazil in disarray.
Furthermore I believe it did not benefit the economy as Brazil were in their
worst recession of all time beating the recession of 2016 after the games, even
though Brazil are one of the main producers of the world’s most favourable
commodities such as coffee, rice and beef, showing what implications the
Olympics had on the Brazilian economy. In addition it could be claimed that the
Brazilian government were only able to improve the minimum wage as there were
less people to cater for as the unemployment rate increased, as a result of the
Olympics no longer being in Brazil due to less builders being required.

 

 

Did Brazil’s economy benefit as much as it should have from
the Olympics?

 

The 2012 Olympics was the most captivating event of the
summer of 2012, the eyes of the world was fixed on London non-stop for two
weeks. In a number of ways it can be claimed that the London Olympics benefited
the British economy more than the Rio Olympics did Brazil. This can firstly be
justified with the use of the venues in London after the Olympics, venues such
as the Cooper Box Arena which was used for hosting the fencing and handball events
in the 2012 Olympics, are now being used by the London Lions men’s basketball
team for team practices and competitive games. Another example is the Aquatics
Centre 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 swimming
team to train for the 2016 Paralympic Games. Moreover the Olympic Stadium, the main
sight of the Olympic Games is now being used by West Ham football club with
West Ham paying 2.5 million pounds rent a year. This shows that the British economy
will benefit as they will be making money from the rent being paid and the
tickets being sold for London Lions games. Whereas after the Rio Olympics all
but the Maracana Stadium used by the Brazil men’s football team is no longer
being used, showing that the Brazilian economy could have benefited more by
using the stadiums for sporting events and concerts to generate revenue.  

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