Brazil, the World Cup, and Poverty

June 9 Main image

June 9, 2014

2011 estimates from the OECD Better Life Index that average household net-disposable income per-capita is 10,310 USD or 23,068.62 BRL at today’s exchange rate.

Brazil, Latin America’s rising economic powerhouse, the “B” in the BRIC(S) acronym, and home to the 2014 World Cup. Much has been made of the astronomic 11 billion USD sticker price for new infrastructure to accommodate fans and athletes. The massive demonstrations and riots last summer were but an external indication of the rampant inequality, especially among the disenfranchised youth of Brazil’s infamous favelas.

There is no greater example of the clash between the World Cup and the needs of the people than the current Sao Paulo metro strike. The five-day strike is over a 3.5% discrepancy in pay raise – the workers demanding a 12.3% hike while the state-owned company is only prepared to offer an 8.7% increase. In a country where the average salary is just over 10,000 USD per year, this is not inconsequential. Considering the 11 billion USD that Brazil has spent, that translates to roughly 55 USD per person on the World Cup alone. Factoring in the costs of the 2016 Olympics in Rio, Brazil is spending massive amounts on sporting events, and the working class is evidently displeased.

The World Cup and the Olympics do not necessarily present an either/or situation with economic development and poverty alleviation. In many ways, these events will contribute to Brazil’s growth by increasing tourist revenue and showcasing the attractiveness of the country to potential investors. Yet, reports have shown that these gains are often much smaller than the initial investments – as was the case with the most recent World Cup in South Africa. Beyond the number and statistics however, there are the intangible elements of national pride that a World Cup brings about. In 1998 for instance, the victory of the black, blanc, beur* French National Team went a long way to repairing race relations in France. Zinedine Zidane, a Frenchman of Algerian descent, became a national hero after his performance in the final of the World Cup – a fact that only sports could have brought about.

Time will tell if Brazil will experience a similar wave of nationalistic pride as a result of the World Cup, yet many articles today suggest that Brazil’s disenfranchised youth does not view the World Cup favorably. Regardless, over the next month the best (and worst) of Brazil will be on display for the world to see. Hopefully it will be an opportunity to demonstrate the growth and development of this Latin American titan, but also give its leaders pause to recognize the underlying internal problems that still plague the country. The recent court decision to rule the metro protest in Sao Paulo illegal is counterproductive to Brazilian development and is indicative of a detachment between Brazilian leaders and the working poor. All of Brazil will be on center stage during the World Cup; the wonders of the Seleção will not be enough to overshadow the plight of Brazil’s most disenfranchised citizens. A bittersweet result of the World Cup has been the exposition of these problems to the world; the Brazilian leadership can longer ignore these problems, particularly with presidential elections looming in October. Addressing these issues is key to Brazil’s new (and current) leaders, particularly before the 2016 Olympics – that’s one goal that can’t be missed!

*Beur is French slang for Arab. The 1998 French national team was seen as a cross-section of the entire society with many different minority groups represented.

 

For more on the statistic:

http://www.oecdbetterlifeindex.org/countries/brazil/

Other relevant links:

http://www.ft.com/intl/cms/s/0/bf9e3ad2-ea8d-11e3-80fb-00144feabdc0.html#axzz349WPtBIP

http://www.aljazeera.com/indepth/opinion/2014/05/beyond-samba-sex-soccer-world-cu-20145285341740580.html

http://www.espnfc.com/team/brazil/205/blog/post/1855341

http://www.pri.org/stories/2014-05-29/opportunity-scarce-brazils-youth-are-demanding-more-world-cup

Details