Saturday 29 October 2016

Rio has hurdles to jump in the run-up to Olympics

Political crises, corruption and recession have Brazil in turmoil, reports Ewan McKenna in Rio

Ewan McKenna

Published 10/04/2016 | 02:30

Anger: Protesters take to the streets in Rio.
Anger: Protesters take to the streets in Rio.
President Dilma Rousseff

It's probably best not to try and understand the mysterious ways in which Brazil works. But if you insist, here's a story that might warn you off before you dare to delve further.

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In the 2014 parliamentary elections, Paulo Maluf was running in Sao Paulo, a place he'd previously served as mayor and governor in a career that had seen him become one of the country's richest and most questionable people. Synonymous with the catchphrase, "corrupto, mas faz," or "corrupt, but hands-on," as if a positive, the local verb Malufar derives from his career and means stealing from the state. He can't even leave his homeland because Interpol want him on money laundering charges but, still, at the ballot box he was swept back to power.

It's a microcosm of a confused and confusing nation.

Only a year prior to that, Fifa's Confederations Cup was supposed to mark a turning point as the public flooded onto the streets with protests making news far and wide.

But if that was a uniting factor for many disgruntled strands of society, the upcoming Olympics are largely an irrelevance for a country tearing itself asunder. Indeed, if the World Cup was supposed to announce Brazil becoming a major global player, these Games, taking place in August, will instead announce a farewell to that idea.

It shouldn't have surprised many when, during that 2014 tournament, the hosts slipped into a recession that has swallowed them ever deeper since, the worst now in 25 years. And that's the problem with major sporting events, for they sell governments a lie, who in turn sell their people a lie. Research by the University of California and the Federal Reserve even shows the economies of countries that just bid for an Olympics grow by as much as the economy of the winning nation.

Thus another mega-sporting winter here with a huge price tag was never going to rescue Brazil, and while external factors such as China's slow-down and the low price of oil have hit hard, it is corruption that has multiplied the crisis several times over.

In the past six months, all three of the most influential financial ratings agencies have downgraded Brazil's sovereign debt to junk, while industrial production fell 11.8pc in the first two months of the year. On top of that, unemployment is heading for double figures, where inflation already resides. What grabbed many foreign headlines though was the country's sports minister, who was overseeing the Olympics, walking away with a number of cabinet ministers.

But this is much bigger than him, or them, for it was a self-survival precursor to next weekend - Sunday, April 17, a day when Brazil's congress is set to start impeachment voting against president Dilma Rousseff, leader of the centre-left Workers Party, in what many are calling a coup.

That's because while Brazil is in the midst of the biggest corruption scandal in history, Rousseff hasn't been formally implicated. Instead she is under investigation for using the funds of state-backed banks to temporarily mask the government's budget deficit before her re-election, with house speaker Eduardo Cunha saying that is grounds enough for her removal. But there's a catch.

The disgrace that's been enveloping the country is related to Petrobras, the state oil company, which has been found to have massively overpaid for building projects, with the extra money split between construction bosses and politicians - essentially a way to wash public funds into private hands.

But while there's no actual evidence against Rousseff, it's seen the beginnings of a civil cold war of sorts that occasionally gets milder, with opposing mass marches regularly taking place nationwide. It's not clear what's an anti- or pro-democracy rally anymore, but what is clear is party followers have been pitched against each other by a political class where corruption unites all sides of government.

The Brazilian colours symbolise the opposition that tend to be from the wealthier layers, with the red of Rousseff's party signalling her supporters. But there have been numerous reports of intimidation and violence against those inadvertently wearing the wrong shade in the wrong place on the wrong day.

As the infrastructure for the Olympics goes up - behind schedule but likely to be finished in the slow but calm local style - the nation that is paying is falling down.

The investigations into corruption are at least a start and may improve matters in the long term, but not until long after the Olympics have come and gone. Thus sport really doesn't matter right now.

Where once hosting the Games surmised the mood of a nation on the rise, now they are small beer next to its collapse. In fact, if anything, down the line they are likely to add to the issues and anger. For instance, it's believed World Cup stadia are next up for investigation.

Conglomerate Odebrecht, for instance - heavily involved in the Petrobras scandal and also behind much World Cup building - has its fingerprints all over these Games. They've already built the Olympic stadium, with the cost coming in at 533pc of the initial estimate, before being closed as the roof was found to be unsafe in windy weather.

And then there's the athletes' village the company built in the wealthy neighbourhood of Tijuca. The official name translates as 'Pure Island,' giving an insight into the sort of people its future belongs to. After the Games, the 3,600 apartments will be sold, with prices starting at around €620,000, when the average monthly household income in Rio is closer to €620.

The organising committee has told us the project was privately built, thus costs the state nothing, but it's not about the cost, rather the profits that come after.

Rio's new and needless golf course demonstrates that perfectly. It was funded by Pasquale Mauro, a billionaire property magnate. A 2008 investigation by the ministry of labour found 70 workers in slave-like conditions on one of his estates.

His ownership of the land its built on has been disputed, but in return for constructing the course, the developer he works in partnership with has been given permission to build 23 condominiums of 22 stories each, where before the limit was six.

Despite this reality, much of the wider world has become obsessed with the bloated importance of the coming Games. The water that sailors will spend a couple of hours in has taken precedence over the 600 slums that house the 1.3m people that live close by.

And the venues have also taken precedence over a murder rate within the city of 30 per 100,000 (the rate in the US is 3.8 while in Ireland it's 1.2).

These and other statistics and scandals will fuel endless stories about the Games between now and August. But the truth is, just like the World Cup, these Olympics will be deemed a success.

And by the time the flame is extinguished most now voicing their concerns will have tuned out and moved on.

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