The long term economic effects of the 2014 World Cup in Brazil

Centuries ago, it was customary for kings of Siam to grant white elephants as gifts to fellow noblemen or visiting diplomats. The exotic beasts were…
The long term economic effects of the 2014 World Cup in Brazil

General view of the Arena da Amazonia soccer stadium in Manaus, Brazil, Tuesday, May 20, 2014. Arena da Amazonia will host matches of the 2014 World Cup in Brazil. (AP Photo/Felipe Dana)

Centuries ago, it was customary for kings of Siam to grant white elephants as gifts to fellow noblemen or visiting diplomats. The exotic beasts were indicative of great opulence, power, and wealth. However, with time, their care became so burdensome and costly that it generally led to the financial ruin of their recipients.

Over the past several decades, Olympic and World Cup host nations have acquired white elephants of their own. From South Africa to Athens, developing countries have brought about a tremendous financial burden upon their economic system for the sole purpose of building and maintaining athletic facilities that have little to no long-term use.

And although the 2014 World Cup hasn’t even commenced, Brazilians are already preoccupied and have begun to experience the encumbrance of the white elephants which have been built in their own backyard. Approximately $4 billion have spent on the renovation and building of stadiums to this day, many of which will serve no real purpose beyond the World Cup.

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South Africa, the 2010 host, serves as the most recent precedent. After having spent billions on the building of ten stadiums, nine of those have remained mostly idle since. Cape Town stadium—which cost 4.5 billion rand to construct—required 56 million rand in maintenance costs from the South African government over the 2012 fiscal year, while only generating 14 million rand in revenue.

After the Athens 2004 Games, the pool has been sporadically used for national championships. Eight years after the Athens Games, many of the venues remain abandoned or rarely used, focusing public anger on past governments as the country struggles through a fifth year of recession and a debt crisis that has seen a surge in poverty and unemployment.

The open Olympic swimming pool sits empty at the rundown Olympic complex, Thursday, Aug. 2, 2012 in Athens. (AP Photo/Thanassis Stavrakis)

Meanwhile, Greece has also had to deal with the detrimental long-term effects of hosting a major global athletic event. In this case, the 2004 Olympics are credited for being one of the major catalysts for Greece’s recent economic recession. Ten years after the event, most Olympic facilities remain idle with the baseball, softball, and field hockey complexes mired in shrubs and abandonment not having been used a single time since 2004.

Brazil is set to be the biggest spender in World Cup history and amongst its most likely white elephants, the newly-built stadiums at Brasilia and Manaus stand out as the most probable representatives of wasteful investment on behalf of the Brazilian government.

Bloomberg Businessweek reports, “Brasilia’s 71,000-seat Estadio Nacional, at 1.5 billion reals the costliest arena, has attracted the most attention and may be the hardest to fill after the World Cup. The 57 games in Brasilia’s state championship so far this year [2013] have pulled fewer than 50,000 spectators in total.”

SEE ALSO: The good, the bad and the ugly in Brazil prior to the World Cup

To the northwest, literally in the middle of the Amazons, $270 million have been spent on building a brand new facility in the small city of Manaus. Only four games will be hosted in the stadium and its long-term prospects seem uncertain, to say the least. No major sports teams play in Manaus and few events are likely to take place in the remote municipality beyond this year’s cup.

Starting last summer, protests began to grip major Brazilian cities as a response to the unprecedented amount of public funds which have been spent on soccer’s most important tournament. In a country still ravished by poverty, healthcare and education are a priority over brand-new stadiums.

And with all the world’s attention set on the World Cup, it’s been to easy to overlook the fact that Rio’s Olympics and all its accompanying white elephants are just two years away, as well. Brazil and its people are in it for the long haul.

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