June 18, 2014

What does the World Cup mean for Brazil?

Brazil's star is on the rise. With the World Cup underway and preparations for the 2016 Olympic Games now at a furious pace, all eyes are on the country.

Around 3 billion people are expected to watch the football tournament, nearly half of the World’s population. But while global attention is firmly on the football, what does the tournament mean for the people living and working in Brazil?

Reports have put the estimated total cost for hosting the World Cup in excess of $11 billion, which makes it the most expensive in FIFA history. With a population of about 200 million, this equates to roughly $70 per head, which is a princely sum when Brazil’s official minimum wage is just over $16 per day. (Read more about minimum wages.)

It is not entirely unexpected that protests have sprung up. In a recent poll 60% of Brazilians said that they did not want to host the tournament due to what was perceived as wasteful spending, when more should be done to protect against mudslides which killed over 420 people in January.

The Brazilian trade federation Central Unica dos Trabalhadores paints a positive picture of investment however, with the construction of 12 stadiums, a host of urban mobility projects from roads to stations to airports, and investments into public safety and telecommunications. They estimate 97,000 jobs have been created in the construction and tourism industries alone.

The adage spending to accumulate is appropriate, but how do you know when you have over spent? The 2010 World Cup in South Africa offered the same incentives, providing a boost to tourism and national pride. The problem lay with the 220,000 increase in tourists the event attracted: not nearly enough to offset the $3.9 billion which the country spent on the event.

But can Brazil expect a better return?

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