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The Carnival Goes to Town

June 2011


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The Carnival Goes to Town

It may be years before Brazil hosts the World Cup and the Olympics, but it is already investing in airports, stadiums, buses and bullet trains. Vincent Bevins reports

By Vincent Bevins

There are few moments in history that seem to capture a nation’s coming of age, but in 2009, as thousands of Brazilians on the beaches of Rio heard that their city would host the 2016 Olympics, the celebrations were so explosive – even by Brazilian standards – that it felt like the country had been recognised at last. Having already secured the World Cup for 2014, Rio outshone a last-minute intervention from Barack Obama on behalf of the US – which means that the rising South American economy will soon host the world’s two largest sporting events.

But as often happens in Brazil, the euphoria wore off when it became clear how much work would be involved, specifically when it comes to infrastructure. Fortunately, however, this couldn’t have come at a better time. Most economists and business leaders believe that the inadequacy of Brazil’s infrastructure is one of the economy’s main bottlenecks, and huge government plans for the next 10 years are already in the works. If channeled properly, the World Cup and the Olympics can put pressure on the country to carry out work it had already decided on.

“The idea, hopefully, is to finish the sporting events with a significant legacy,” says Paulo Resende, infrastructure expert at the Fundação Dom Cabral business school. “The alternative is that we muddle through with temporary solutions and leave problems unsolved.”

If Brazil does get the job done – and the challenges are significant – it will require government resolve, the cooperation of clever business leaders and the involvement of some of the big personalities that made the games possible in the first place.

The fast-growing economy has already earmarked hundreds of billions of dollars for wider infrastructure projects, but the sporting events require a focus on transportation and facilities: getting people from their countries into Brazil, from airports to hotels, around town and to matches, and back home, while assuring they have life-changing and enjoyable experiences. Not an easy task in a country as haphazard as Brazil currently is.

Preparation for the events will depend heavily on the two very different men who made it happen. Ricardo Teixeira, who has been head of the Brazilian Football Confederation (CBF) since 1989, has a storied and controversial history from what was, nonetheless, a very successful period for Brazilian football. He has been accused of corruption and of operating in an insular, non-transparent, ‘Old Brazil’ manner, and signatures are being collected in the Brazilian legislature for a full congressional inquiry into financial irregularities surrounding the 2014 Cup.

If successful, this would be the third time he has come under government scrutiny. In 2000 he was accused of taking advantage of a contract with Nike, and in 2001 he was accused of money laundering, money smuggling, misappropriation and tax evasion.

Critics say the CBF refuses to acknowledge some of the more pressing problems at hand, such as constructing stadiums and expanding airports in the limited time available. But Brazil – indeed ‘Old Brazil’ – has hosted the World Cup before, so maybe this approach will work.

By contrast, Carlos Arthur Nuzman is newer on the scene and has impressed with his sharp, serious style. He is widely credited with making Rio’s Olympics bid the strong contender it turned out to be, after successfully guiding the city through the 2007 Pan American Games. “When we saw the Rio 2016 proposal,” says local Rio business owner Wilson ‘The Bahian’ Flora, “we knew that it was something that would be taken seriously, unlike our earlier proposals.”

Nuzman secured the first South American Olympics, but it won’t be the only Olympic first in his lifetime. In 1964, he competed in the Tokyo Games, playing volleyball, at that time a debut Olympic sport. Having subsequently built a career as a lawyer and businessman, he then moved to the Brazilian Volleyball Confederation, winning plaudits for his leadership as Brazilian teams won championships.

Under Nuzman’s leadership of the Brazilian Olympic Committee, he successfully brought the Panamerican games to Rio in 2007, showcasing the city’s potential in the run-up to the bid for 2016. To that end, he moved successfully between negotiations with the IOC and the Brazilian government, getting its full backing. In terms of infrastructure, though, he does have it easier than the World Cup organisers. “Rio is just one city,” says Resende. “Foreign football fans have to get all over the country.”

For Teixeira, there were three main priorities in the run-up to the World Cup in 2014: “Airports, airports, and airports.” This is not only because Brazil is so large – almost twice the size of the EU – and because spectators will want to watch matches at up to 12 locations. It’s also because Brazil’s economic boom has caused airport traffic to increase by an average of 10% over the past few years. In recent years it has become more common for Brazilians travelling domestically to fly rather than use the bus. That has turned catching a plane into an undignified hassle, with delays, and having to stand in line for hours, now common occurances. As if the problem weren’t serious enough, football legend Pelé weighed in recently, saying the airport problem was “frightening” and a potential national embarrassment.

One option for the government is to install modular structures at airports that can be dismantled as the end of the tournament. “The World Cup is a very short period,” planning minister Miriam Belchior said recently. “It’s possible to take other measures to meet the extra demand [for air travel], but the rise we have already seen, and that we expect in the next few years, will need to be dealt with now.”

To do that, the government may restructure or privatise Infraero, the state-owned outfit that runs Brazil’s biggest airports. President Dilma Rousseff, who came to office in January, took a significent step towards reform when she created a Secretariat for Civil Aviation. The first appointment – of Wagner Bittencourt de Oliveira, the former infrastructure czar at the national development bank, who had strongly supported expanding infrastructure investment faster than the economy was growing – was widely regarded by modernisers as a step in the right direction.

If the government follows this route, it will want to link up with the private sector to get investment going. “Privatisation is definitely a strong option,” says Resende, “as businesses will be likely to move more quickly when it comes to funding.” For decades in Brazil, privatisation has been a politically toxic issue, and Dilma was not expected to approach it at the beginning of her term. But she has been open to the idea recently, and it has private-sector support for the usual reasons: Infraero, the public company now running the airports, is routinely accused of moving slowly, excessive bureaucracy, and of allowing rent-seeking from officials. It seems the government might prefer to let the private sector take over rather than fix Infraero or come up with a new agency. But no clear plan has emerged yet.

Beyond this, there are concerns that some football stadiums won’t be built in time for the World Cup. But, says Resende: “I’m not worried. If by 2012 or the beginning of 2013 all the stadiums can’t be ready for 2014, there is always the possibility of eliminating that city. Maybe we won’t have 12 [cities taking part]; we can still have nine.”

Moreover, if an ambitious government plan comes to fruition, tourists travelling between Brazil’s two main cities, São Paulo and Rio de Janeiro, will be able to speed back and forth on a state-of- the-art, $21bn (€15bn) bullet train – one of several infrastructure projects that are linked to the World Cup-Olympics timetable but which actually reflect much larger economic pressures. The Rio-São Paulo corridor accounts for most trade and business travel in the country, and commuters must either deal with a six-hour drive on crowded roads or at least two crowded airports. Though the potential benefits of the train are clear, it has numerous detractors who question its practicality. “Spending that much money on a bullet train is ambitious to the point of not making sense,” says one senior executive at one of Brazil’s biggest banks. “But perhaps they will pull it off.”

At the moment, private companies are waiting for the right to bid on the project after some delays. The government expects at least three private bidders, but may be holding out for more. It’s become clear that the original goal of meeting the World Cup deadline will not be met. Some think the bullet train is evidence of a focus on flashy gimmicks, rather than nuts and bolts.

“A stadium, or an extra runway, these are just single elements,” says Resende. “But real infrastructure programmes are about systems. Take the path of one fan from Germany in the World Cup. That person will take a flight to São Paulo, pick up their bags and make their way to their new flight to a new city, say Manaus in the northwest. There, they will need to get their bags, board a taxi without speaking Portuguese and find a hotel. They will look around before the match, get to the game and then eventually go through the whole process again to get to a third city, maybe Curitiba, south of São Paulo. How integrated is that whole process? We want to avoid them comparing us unkindly with the World Cup they had in Germany in 2006.”

It’s clear that the issue is more about organisation, linkages and management than finance. Indeed, money is pouring so quickly into the Brazilian economy that the government has moved to halt inflows and stem the appreciation of the currency, the real. The Olympic project, for example, recently rose $700m with just two sponsorship deals. Leonardo Gryner, chief executive of the Rio organising committee, said the total figure will be capped at $1.2bn, meaning the government will not have to spend money directly on the event. It won’t go higher, he said, because the idea is not to turn a profit.

With the Transcarioca bus system, which will connect the Olympic Village with its international airport, Rio is the one city with an already updated internal urban- transport system. Nationally, however, many of the infrastructure improvements will depend on the skill of the new government under Rousseff. Based on her experience, she is well placed to push this agenda. As chief of staff under the previous administration, she was in charge of two infrastructure programmes, known as PAC (Programme of Accelerated Development) 1 and PAC 2. Under these, the country will spend $562bn from 2011- 14 on projects such as housing, electricity generation, highways and ports. Some 40% of this amount is meant to come from the private sector.

Much of this is aimed at the wider economy, rather than just sports events. Brazil’s flourishing agricultural trade with Asia is hampered by the poor roads connecting the interior to overcrowded ports, and many citizens are still excluded from their country’s wealth. Much of Brazil’s takeoff in the past 10 years has been powered by soaring commodity prices and the export of iron ore and soya to China. For the latter, demand is already too large for Brazil’s transportation system to handle, and China expects to double imports over the next 10 years. For this to be feasible, roads and port systems need to be expanded. For mining, private companies such as Vale and Eike Batista’s EBX build private transport systems and ports to get their goods to Asia.

But for better or worse, it will be the World Cup and the Olympics that capture international attention. Their success will depend on carrying through a set of clever partnerships with business, many of which have yet to materialise – but in typical Brazilian fashion, at some point they probably will. If they don’t, the people who made up those cheering crowds of 2009 may very well change their tune.

BEACH CULTURE

The new museums planned for Rio

It isn’t just the nuts and bolts that are getting an upgrade for the World Cup and the Olympics. Rio de Janeiro is working quickly to expand its cultural offerings, knowing that the games' legacy is about more than how quickly fans get from the airports to the events.

The city is reviving the relatively neglected central port area with a new museum, the Museu de Arte do Rio (or MAR, meaning sea in Portuguese), whose façade should be unveiled soon. Two large, ambitious buildings – one modernist and one neoclassical – will put history and education on display next to Brazilian works of art. Leonel Kaz, curator of the city’s football museum, will be in charge of the new attraction’s rolling collections.

In the more upscale area of Copacabana, the city has gutted a former nightclub for the construction of the Museu da Imagem e do Som (Museum of Image and Sound), a film, photography and music museum that will overlook the famous beach. The building’s multi-level and boldly transparent exterior aims change the feel of the beach skyline, as well as the street’s local flavour. To make way for the building, the famously decadent Help club went down, taking the attendant prostitution with it. In Ipanema, the city’s other high-priced beach area in the south, a bossa nova museum is in the works.

Spanish architect Santiago Calatrava has unveiled plans for a new science and sustainability museum, dubbed the Museum of Tomorrow, which will jut out into the ocean on pier Mauá, not far from MAR. A new concert hall called Cidade da Música (city of music), also in the centre, is at the end of a long construction process that will eventually cost the city $300m.

Doubts have been raised about whether the projects will be finished on time or if the famously bureaucratic Rio government has been accommodating enough to those working on them.

Paulo Jacobsen, one of the architects working on MAR, recently called the projects “a constant tug of war between us and the city hall... They want to lower the prices and we as architects want to get our ideas across.” The City of Music has had its construction plans delayed by eight full years, and an extension to the Museu Nacional de Belas Artes (National Fine Arts Museum) has been postponed indefinitely, despite the protests of its director.

But the projects are ambitious, and government officials insist that they will get done, as do most other things in Brazil.






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