Brazil’s Economy During The Rio Olympics

The government was forced to cut the $5 billion budget between five – twenty percent, because in the previous year their “government’s deficit inflated to more than nine percent” (“Rio Olympics 2016: economic gain or loss?”). Former Brazilian President stated “Brazil should set up a free event for locals, similar to when they hosted the world cup, in a venue showing live sporting events…as it will be too difficult to buy tickets.” He also confirmed that athletes will have to watch the Games on a communal TV and have to eat traditional food instead of gourmet meals because it is too expensive to afford (“Brazil’s Economy May Hit Bottom During the Rio Olympics”). Brazil had wasted up to $15 billion on infrastructure that could have been used on their “dysfunctional” health care system and deal with Zika virus. Instead of helping their citizens, as they promised, they ended up making 385 families evict their homes in order to make room for their transportation system (“Brazil’s Economy May Hit Bottom During the Rio Olympics”).Therefore, the Olympic Games did not cause Brazil to have an economic boom the way they were hoping too. Instead it ended up putting them in an addition $1 billion debt as large companies that invested in the Olympics found a way to avoid taxes. “Brazil now has a long way to go before they are economically stable, and the Olympics is just added more pressure” (“Brazil’s Economy May Hit Bottom During the Rio Olympics”).

Only a few countries are able to host the games and turn it into a profit, while the rest add up to $1 billion in extra debt. Canada was very successful in hosting the 2010 Winter Olympics as they were able to give the economy a $2.3 billion boost. Unlike Brazil, Canada was able to help their citizens and created a minimum of 45 000 jobs (“The case for Calgary as host of the 2026 Olympic Games”).In addition to the economic benefits, the IOC noticed other positive outcomes that include participation and recognition of Aboriginal groups and people with disabilities and as well as a development in sport and culture across the country (“2010 Winter Olympics provided economic and cultural boost”). British Columbia infrastructure construction and third-party investments brought in $1.26 billion into Canada’s economy, as well as tourism revenue also increased in 2010 by $226 million. Not only did these investments help the economy, but also helped Canada set a record haul of gold medals. These investments also helped Canada achieve their goals of improved infrastructure and Canadian innovations in buildings (“2010 Olympics: Vancouver Winter Games Gave Economy A $2.3 Billion Boost, Report Says”).

Reports claimed that although “the 2010 Winter Games took place in the midst of a prolonged downward trend of international visitors due to the lingering effects of a global recession and a high Canadian dollar” more than 650,000 visitors arrived in Vancouver for the Olympics, 242,000 visitors from Canada, 324,000 from the United States and 83,000 visitors from other countries. They also claimed that the Games were the most viewed Winter Games in history with 3.5 billion viewers (“2010 Winter Olympics provided economic and cultural boost”). Due to the increase in tourists and viewers many Canadian Olympic merchandise were sold (more than 3 million airs of red Olympic mittens were sold) drawing in several million dollars. The Vancouver Organizing Committee declared that Canadian taxpayer paid $900 million to secure the Games and also provide for high security levels. At the end of the day, the Olympics brought in $600 million into the British Columbia economy and $2.3 billion into all of Canada’s economy, “lifting growth by about 0.8 percentage points” (“2010 Olympics: Vancouver Winter Games Gave Economy A $2.3 Billion Boost, Report Says” ).There was also a sense of pride for Canadian as they made history in the Games and set a legacy of being “debt-free” (“2010 Winter Olympics provided economic and cultural boost”). And because of the success in Winter Olympics in Vancouver, Canada will have the chance to bid again and host the 2026 Winter Olympics in Calgary (“The case for Calgary as host of the 2026 Olympic Games”).

A country’s national Gross Domestic Product has the tendency to affect whether or not a sport is considered “rich” or “poor.” The idea of “rich” and “poor” games is used to show which countries are dominant in which sport due to their stability in funds (“Interactive: Wealth, Equality, and Olympic Success”). Figure 1 below shows the per-capita GDP of countries that won medals in 15 various games, during the Winter Olympics. Each countries per-capita GDP (whether they are economically rich or poor) is multiplied by the medals won in each sport and divided by the total number of medals. As seen in figure 1 the “richest” game in the Winter Olympics is curling with $39k, which shares the same wealth as United Arab Emirates (“Rich and poor on Olympics” not so level playing field”). This sport requires a lot of expensive equipment and pieces such as specially made shoes, brooms, stones that only the wealthy can afford. For this reason, only certain countries that have an interest as well as the funds for curling can dominate, such as Canada, Switzerland, and Sweden. Other “rich sports” are snowboarding (which is dominated by the United States and Switzerland), ski jumping (which Austria, Germany and Norway dominate), and bobsledding (which Germany tends to dominate).