Throwing good money after bad? That is somewhat like the reality of Nations hosting major international events: World Cup Football (Soccer); Summer or Winter Olympics; or World’s Fairs. Oftentimes, the Host Country spends money that it cannot really afford in order to play the gracious host.
Just consider the Billions of Euros that Greece spent to host the 2004 Summer Olympics. Afterward, the various venues were expected to be turned into the largest park in Europe. Due to the normal dysfunctional bureaucracy, which hampers most development in Greece, hover, the Olympic Site is mostly covered with overgrown weeds and silence today. And, you can only ask if hosting the Summer Games was just one more cause of Greece’s current Debt Crisis.
During recent Bidding Wars to host Major International Events, many different cities actively tried to “win” the right to host the Next Big Thing. Unfortunately, the many of the contestants can’t really afford to Win, and end-up borrowing to finance the extreme costs of preparing for the Games or Cup, or they would often be building sports or other venues which would hardly be used again–if at all.
Just consider the $300 million that Brazil has spent on the construction of the “Arena Amazonia” to host all of just four World Cup games, in Manaus, a city of Two Million that doesn’t have a football team to fill the stadium afterward. Oh, and it is in the middle of the Brazilian Rain Forest. Most of Brazil has been questioning what will happen and who will use the New or Re-modeled Soccer Stadiums once the World Cup is over.
Brazil, the Host Country for this year’s Cup, has one of the fastest-growing economies in the World; however, there are two things that stand in its path to achieve true economic greatness. First, Brazil’s economy is not sufficiently diverse, since it is primarily dependent upon Financials, Consumer Staples (Necessities); Materials and Energy. Also, to a certain extent, the size of its economy is due to its large population, rather than any systemic growth.
Although Brazil has increased the size of it Middle (or “Consumption”) Class, there is still a very substantial number of Brazilians who are living in abject poverty. This has caused numerous protests over the past couple of years as many Brazilians have questioned whether the $11.5 Billion, which was spent on the World Cup, might have been better spent, improving: Education; Health Care; Personal Services; Transportation and other Infrastructure Projects.
The FIFA (International Football Association), the governing body, receives $4 Billion for a given World Cup, and retains $2 Billion of that in Profits. The politicians and the Wealthy derive status and corporations generate Profits. The average Brazilian, especially the Poor, however, cannot even afford a ticket to attend a local game–nor the transportation to get there. And guess what? Rio de Janeiro, with help from the Nation, will get to do it all over again, when it hosts the 2016 Summer Olympics.