Brazil Didn't Burn During The World Cup, But What's Next?

Brazil pulled it off, after all.

In the months leading up to the World Cup, the predictions were dire and doomsday scenarios were common: Rio de Janeiro’s favelas were supposed to burn at the hands of Brazil’s aggrieved underclass; games would be played in unfinished stadiums; planes were going to land in chaotic airports; and newly built roads were expected to crumble. Brazil was expected to collapse under the pressure of hosting the world’s most-watched sporting event at an estimated cost of between $11 billion and $14 billion, in a catastrophe worse than Sochi’s problems” at the 2014 Winter Olympics.

Instead, the country hosted one of the more memorable World Cups in history, one that went off with relatively few hitches. The drama that unfolded on the pitch kept the world’s eyes on the games and players rather than on the struggles of urban slumdwellers, the shrinking rainforests or the crumbling infrastructure that plagues the world’s seventh-largest economy. An overpass being built in the host city of Belo Horizonte did in fact collapse on July 3, killing at least two people and injuring more than a dozen. But the total organizational and structural debacle predicted by many observers, some of which were reported in the International Business Times, did not materialize. The host country’s only real embarrassment was the stunning 7-1 semifinal drubbing of its team by Germany on Tuesday afternoon.

“In advance of the World Cup, everyone was expecting that execution of the budget, the amenities and the infrastructure, weren’t going to be ready and that’s not what happened,” said Ludovic Subran, chief economist at the Paris-based Euler Hermes credit insurance and economic research firm.

During the competition, soccer remained the central focus -- unlike in Russia, where the abysmal state of the Olympic Village, stadiums and environs often eclipsed athletics in the news cycle.

“Before the World Cup there was a distinct possibility for considerable social unrest in Brazil; however, the unrest has not occurred,” Joseph Fuhr, an economics professor at Widener University in Wilmington, Delaware, said. “The Brazilians have embraced the World Cup and their love of football and have suppressed what they felt before the games.”

Shortly before the Cup kicked off on June 12 with Brazil’s 3-1 defeat of Croatia, national sentiment was mostly tilted against the event, with widespread dissatisfaction over where the nation was headed. A survey released on June 3 by Pew Research Center found that 72 percent of Brazilians were dissatisfied with the state of affairs in their country, and 61 percent considered hosting the World Cup to be a net negative for the nation because money spent on it should have instead gone toward schools, poverty relief programs and other public services.

A month later, the mood had shifted considerably. A survey conducted on July 1 and 2 by Brazilian research company Datafolha found that 60 percent of Brazilians polled were proud of the way the World Cup had been managed, according to the New York Times. It’s a result most people could not have imagined just a few weeks ago, when protesters’ cries of “There will be no Cup” echoed through social media and the streets.

Sardo Lima, a retired bank teller who drove a taxi in the host city of Fortaleza during the tournament, told the Los Angeles Times he has been pleasantly surprised by its success. “I thought this World Cup was going to be a total fiasco. Everyone did,” he told the newspaper. “But thanks to God, everything is going relatively well, apart from some sporadic traffic. But, of course, that doesn't change the fact that millions were stolen for the stadiums and many of the programs promised were never delivered.”

The billions of dollars in public funds that the government poured into the Cup -- much of which went to overpriced stadiums and other projects of questionable merit -- provided some undeniable benefits for Brazilians, according to Greg Barnett, an international attorney specializing in Brazil at LatAm Legal Services, a Miami law firm that advises American clients with business interests in Latin America. The country’s economy will continue to feel the effects of the investment as it undertakes further infrastructure improvements and other preparations for the Summer Olympics over the next two years.

“While the economic results have been mildly disappointing, it is hard to argue that the opportunities are no longer there,” Barnett said. “Railroad lines still need to be built, subway systems need to be extended and airports need to be modernized. These projects will long outlast both the World Cup and the (2016) Olympics.”

Those infrastructure improvements -- like the ones that came before the World Cup -- will be expensive, and they may anger certain segments of Brazil’s population, particularly the poor. But forecasting what the mood will be after a largely successful World Cup hosting experience is “unpredictable at best,” says Gerardo Della Paolera, an economics professor at Central European University in Budapest. He says Brazil is better-positioned to handle massive outlays on capital improvements than many previous host nations.

“In terms of opportunity cost, it is clear that money could be spent on socially more pressing needs,” he said. “However, unlike the Olympic Games organized by a small [economy] such as Greece, the burden for the [Brazilian] economy is much smaller in this case, and there is some mobilization of investment for long-lasting infrastructure.”

The capital spending is not all being sunk into mega-stadiums. “Much of the newly constructed infrastructure can lead to future economic activity and thus help the economy grow,” Fuhr said.

Not that Brazilians aren't still a little skeptical about the tournament's ultimate payoff, Fuhr said, especially after the government reneged on its promise to restrict public spending on stadiums and other expenses directly related to the Cup. “When the games conclude, Brazilians may once again begin questioning whether the country has made the best use of its economic resources.”