Who can afford the Olympics?
Answer (1 of 11): WILL A RATIONAL COUNTRY BID FOR OLYMPICS??? after knowing about THE HOSTING COUNTRY CURSE The final red curtain is being drawn on the 2016 Summer Olympics, and life in Rio de Janeiro would soon be back to normal, or to put it right “too normal” or so one hopes. Athletes, fans,...
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In 2009 when Rio was selected to host the 2016 Olympics, the Brazilian economy was on a song. The GDP grew over 7% (and inflation was 4–5%) - the strongest the Brazilian economy was in decades, maybe. They thought the music will keep going till 2016.
“We won the right to hold the games in what was the best time for Brazil in 50 years and are delivering it in the most complicated during the past 50 years" - Rodrigo Tostes, Director of Operations, Rio 2016
The London Olympics costed around $ 10.4 billion and estimates of Rio are at $ 4.1 billion - which is still a lot of money given where Brazil is today.
The music stopped when the commodity prices started falling and demand for Brazil’s (and others’) goods fell. This is over the corruption scandal that ousted the former president Dilma Rousseff. Today, Brazil is barely breathing - the GDP in negative numbers, inflation very high, wages rising continuously, business & consumer confidences in record lows.
Take a look at how the economy is like -
Inflation is way above the GDP - meaning that Brazil is losing money faster than it is making. Also, notice the falling consumer confidence.
So, no Brazil’s hosting of Olympics is not justified. It is the process that needs to be blamed; probably having two-three cities to host together could be a good idea, how the Cricket World-Cup is conducted normally, to mitigate the risk.
Countries need to bid only with the most pessimistic forecasts of how their economies could fare during the host time. Too much optimism is too dangerous.
