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August 20, 2014 at 09:20 PM
While many soccer fans were ecstatic at Brazil’s hosting of this year’s World Cup festivities—the most expensive ever, at an estimated $11.5 billion—many others were not so sanguine about the cost of the show.
Despite all those new or rebuilt stadiums, airports and hundreds of miles of new fiber-optic cables, among other improvements in the cities where the games were played, there were lots of other visible signs of less favorable activity: tent cities, demonstrations and strikes. The stadiums alone overshot their original 2007 budget estimate to hit $3.6 billion, which is almost four times what they were originally projected to cost.
Infrastructure projects that were much anticipated (and much needed) by the Brazilian population saw delays, cost overruns and waste, according to critics who pointed out that money was diverted from schools and healthcare facilities as World Cup venue projects were prioritized. Then some of those projects either faced delay or abandonment as design concerns or poor planning made them impractical or impossible, with public transportation such as rail and bus projects moving lower on the priority list than airports and stadiums.
Many people who were displaced from their homes so that venues could be built are still living in the aforementioned tent cities, new promised housing having not yet become reality. And workers in São Paolo threatened to derail the opening match by going on strike over pay and layoffs.
Still, mismanaged World Cup projects or not, Brazil’s economy is very tempting to investors, and with good cause. Although the economy has slowed, the country’s large population and expanding middle class have represented opportunity, while its high interest rates have lured capital inflows. Unemployment has been low, although consumers have slowed retail spending and business owners have lost the edge of optimism.
