The song goes “they paved paradise, and put up a parking lot.” For Brazil, though, Joni Mitchell’s lyrics might go better as “they promised us paradise, and all we got was this lousy parking lot.”
According to a report by NPR’s Lourdes Garcia-Navarro, many of the stadiums built for last summer’s World Cup in the generally soccer-crazy country are proving to be pretty much useless. One, which cost $550 million, has become a bus parking lot. Another “is trying to make money by hosting weddings and kids’ parties – with little luck.” The stadium in Manaus, out in the rainforest of Brazil’s Amazonas state, is being sold to a private company after being built with public money.
This is, sadly, not a surprising outcome; even before the tournament, it was unlikely that Brazil’s World Cup stadiums would be worth the investment, as they weren’t built in places that had top-level professional teams or enough non-soccer events capable of filling them on a regular basis. And that’s fitting with the historical trend: According to the vast preponderance of the economic research, building stadiums for major sporting events in the hope that either the event itself or the stadium’s subsequent use will make the upfront cost worth it is a fool’s errand. Adding insult to injury, many of the other infrastructure improvements Brazilians were promised would be a part of hosting the World Cup haven’t materialized.
But for Brazil, the news is doubly bad, as the country is in the midst of a confrontational debate over President Dilma Rousseff’s effort to move an austerity agenda through her nation’s Congress. Recently, Brazil’s economic data has been a parade of horribles: unemployment is up, the country’s state-owned oil company is embroiled in a corruption scandal and could deal a knock to its GDP, and analysts expect an economic contraction of 1.2 percent this year, an increase on previous estimates. If Brazil’s economy does indeed shrink in 2015, it will be the first time it has experienced back-to-back years of economic contraction since the Great Depression.
Brazil’s Finance Minister Joaquim Levy has said that the key to turning Brazil around is a combination of spending cuts and tax increases totaling billions of dollars; cuts in unemployment benefits and pensions are some of the big headline-grabbing steps proposed. But many Brazilian lawmakers – understandably, given the post-financial crisis experiment with austerity in Europe and all the unnecessary pain it entailed – aren’t interested in accommodating that plan, particularly to help a president with record-low approval ratings.
“They’re making the same mistakes that European officials made in the last few years,” says Mark Weisbrot, co-director of the Center for Economic and Policy Research and president of Just Foreign Policy (as well as a frequent U.S. News contributor). “They’re tightening the economy when it’s in recession … I think that [Rousseff] will realize that the negative effect on the economy outweighs any potential restoring of investor confidence that it’s supposed to accomplish.” Brazil has been very successful in recent years at pulling people out of poverty, making the ideas on the table at the moment look even more like a serious step backward, as well as a sad appendix to all the public spending on the World Cup that didn’t benefit the average Brazilian.
Brazil is certainly not alone in having a bevy of white elephants left after the World Cup party ended, of course. As economist Victor Matheson showed, Japan, South Korea and South Africa, three other recent hosts, also built stadiums for their respective tournaments that hardly anyone goes to anymore. The same phenomenon is a staple of the Olympics, another major international sporting event that is mostly just a suck on local resources. (Good luck with that, Rio de Janeiro.)
But in Brazil, the empty stadiums stand testament to a bet the country was never going to win, at the same time that the population is being asked to endure an austerity turn that could very well make its current economic problems worse. Sadly, the beautiful game is looking more like just another shameful racket.