Is Brazil Ready for the World Cup?

Ana Quintana / June 11, 2014

The World Cup starts tomorrow and right now, there’s little faith Brazil will come out of the games unscathed.

Government mismanagement, burdensome bureaucracy and outsize corruption have led to this being the most expensive World Cup to date at around $12 billion. From unfinished construction projects to blatant government corruption, the games have served to highlight systemic issues plaguing the South American country.

That’s no surprise when you look at specific costs. A whopping $3.6 billion in taxpayer money has been spent on both building new and refurbishing 12 old stadiums. One stadium cost’s tripled to $900 million in public funds mainly because of fraudulent billing, according to Brazilian government auditors.

Nor is that the only example of hiked costs due to corruption. In the capital city of Brasília, auditors found “grave irregularities” from contractors overbilling the city for construction of a seat stadium whose cost rose 68% to $636 million.

Visitors arriving in the Fortaleza airport, another host city, will be walking under a tent rather than airport terminal after the city’s $78 million terminal construction fell through. Last minute cosmetic fixes like beach scenes are being used to hide unfinished road construction projects. Mass transit strikes plague Brazil’s largest city and opening site for the World Cup, São Paulo. With no foreseeable end in sight to the strike, many fans have been told to “travel by donkey” if they want to attend matches.

And what’s the benefit of all this spending, some of which was originally allocated for long-term infrastructure pieces? Well, now the World Cup is expected to produce only 380,000 temporary jobs and generate $11.1 billion in the licit economy. That’s not a lot of bang for the nearly $12 billion spent.

Unsurprisingly, Brazilians have become increasingly disenchanted with World Cup spending. Initially, almost 80 percent of Brazilians supported hosting the games. Now, 36 percent believe the World Cup will bring more harm than good.

There could be political consequences: The World Cup could potentially be President Dilma Rousseff’s largest challenge going into October’s election. Riding high on her predecessors’ legacy, her recent approval ratings have plummeted to 36 percent.

After a dynamic period of growth, Brazil’s economy has hit a wall and Brazilians are responding. Anti-government protests have been taking place since June of last year in response to the corrupt political system and slowing economic growth. The Heritage Foundation’s Index of Economic Freedom continues to find heavy government intervention in the economy as the cause for misallocation of capital and propellant of social injustice.

As rising civil unrest continues, major protests remain a concern leading up to tomorrow’s kickoff.