The WSJ had a recent article called “Hope Fades in Brazil for a World Cup Economic Boost.” It was the sub-title that really caught my eye though. It reads “Amid Unfinished or Canceled Infrastructure Projects, Hopes Wane That Soccer Tournament Spending Could Spur Long-Term Growth.” Given the grim experience of history, it surprises me that governments (or anyone) truly believe that these types of events will bring about long term economic growth.
It does make for a good news story though. Here are some of my favorite quotes from the article:
1. “In Fortaleza, another poor northeastern city hosting six games, builders finished the Castelão stadium for $230 million. But fans arriving at Fortaleza’s airport will find a giant tent rather than a new planned terminal. Federal prosecutors are looking into whether corruption played a role in the failure of the $78 million terminal expansion project.” Hmm, I wonder…
2. “The signature project was to be a $16 billion bullet train between Rio and São Paulo. Brazil put the São Paulo-Rio rail project out to bid in 2010, and then-President da Silva used the bidding ceremony to rebut critics of Brazil’s preparations. “They are already pressuring us: Where are the airports? Where is the subway? As though we were a bunch of idiots who don’t know how to do things,” Mr. da Silva said.”
Yikes, better for politicians not to ask questions like that. So, was Lula right to cast aspersion on the doubters?
“But that 2010 bidding round was canceled. Potential rail builders balked on concerns that government-set limits on fare prices meant the train might not be profitable. Firms also feared cost overruns since Brazil’s legal system makes it easy for a single lawsuit to shut down a project. Brazil tried and failed to come up with terms that made sense. Bid rounds were announced and canceled three more times before the government shelved the project in 2013.”
3. My favorite politician quote though goes to Ms. Rousseff, who has on TV defending the government’s decisions. Here is one of the least convincing defenses I’ve heard in a long while:
“The legacy of the Cup is ours. No one who comes here will leave with an airport, urban mobility projects, or stadiums, in their luggage,” Ms. Rousseff told hotel and tourism workers in Brasília.
That should quiet the protesters!