Blog post

Rio Olympic spending turns from gold to bronze

Anne Rumberger 4 November 2015

Image for blog post entitled Rio Olympic spending turns from gold to bronze

As the Rio Olympics draw closer, organizers are cutting costs – but it may have more to do with Brazil’s crumbling economy than IOC initiatives or financial good governance. Jules Boykoff, author of “Power Games: A Political History of the Olympics” explains.  

By Jules Boykoff
Rio de Janeiro

This article orginally appeared in Folha de S. Paulo.

Back in 2009, when the International Olympic Committee awarded the 2016 Summer Olympics to Rio de Janeiro, Brazil’s economy was riding high. TheRio 2016 bid book boasted of “financial certainty” and assured IOC bigwigs that Brazil’s “proven economic policies” would “provide a solid economic foundation to support Games delivery.” Later that year The Economist published a cover featuring the iconic Cristo Redentor statue blasting off like an unstoppable rocket.

But no amount of Photoshop trickery can get around the fact that since then, Brazil’s economy has tanked. Despite those “proven economic policies,” the country’s financial tectonics have shifted mightily. In the past year alone, the real has lost 70 percent of its value against the dollar. Inflation has spiked to close to 10 percent.

At the same time, President Dilma Rousseff’s popularity ratings have plummeted into single digits and now hover around 9 percent. The scandal-wracked political system seems dangerously close to implosion, with impeachment being bandied about the halls of political power and theFrank Underwood-esque speaker of the lower house, Eduardo Cunha,threatened with removal on corruption charges. This is the worst recession the country has suffered in 25 years, and economists expect it to extend through the Rio 2016 Games.

In the Olympic world, the tectonic plates have also moved since Rio won the Games. In December 2014, the IOC unanimously passed a slate of recommendations called “Olympic Agenda 2020.” This was a direct response to the fact that the Olympic movement itself had hit a low point. To host the 2014 Sochi Winter Olympics, Russians spent $51 billion, a gob-smacking total that surpassed the costs of all the previous Winter Olympics combined.

In addition to that boondoggle, bidder interest in the 2022 Winter Games was wilting, with only two candidates still in the race — Beijing, China and Almaty, Kazakhstan — both of them anti-democratic, repressive states. IOC President Thomas Bach needed to take urgent action — or at least appear to do so. After all, a Tupac-style hologram of reform might just do the trick.

Enter “Olympic Agenda 2020,” a set of nebulous recommendations, rather than full-force policies. The recommendations spoke of the obvious need to halt runaway spending. Host cities were encouraged to use existing arenas and would now be allowed to hold Olympic events outside city limits.

The goal was to reduce the number of venues destined to become what sports mega-event mavens call “white elephants”: hulking, underused structures that drain city coffers through pricey maintenance costs long after the sporting spectacle leaves town.

The IOC also streamlined the bidding process, reducing it from a forest to a mere meadow of paperwork. Overall, while Agenda 2020 is awash with jargon about “synergies” and “stakeholders,” the wider goal of reducing host-city costs makes sense.

In 2009, when Rio bid jockeys floated their plan, extravagance was the order of the day. Olympic “gigantism” — high-priced five-ring spending sprees on supersized events — reigned supreme. President Bach hyped Rio’s mega-plan at a glitzy gala one year before the Games were to begin: “This will be thebiggest urban redevelopment project since the Barcelona 1992 Olympic Games.”

Indeed, Rio organizers plotted a complex path, with four venue pods in different parts of the city and a gaggle of brand-new arenas and structures built exclusively for the Games.

Rio Mayor Eduardo Paes used the Olympics to spur development in Barra da Tijuca, Rio’s relatively affluent western suburb and a kaleidoscopic consumer paradise. Real estate tycoons — many of whom helped fund Paes’ re-election campaign in 2012 — grinned from ear to ear. Brazilian property baron Carlos Carvalho revealed to The Guardian that in Barra he hoped to forge “a city of the elite, of good taste.

For this to happen, Mayor Paes needed to bash down the barriers to profit. This included clearing longstanding communities such as Vila Autodrómo, afavela perched on the edge of the Olympic blueprints where residents have put up a spirited fight that continues today.

After all, as Carvalho saw it, “the new city” in Barra da Tijuca was meant to be “luxury housing, not housing for the poor.” According to one survey, since Rio was handed the Olympics in 2009, some 60,000 favela residents have been displaced due to urban interventions or because they live in supposed “zones of risk.”

But even with a bevy of building barons on their team, Mayor Paes and the Rio 2016 Olympic Organizing Committee struggled to keep construction moving apace. Back in 2014, IOC Vice-President John Coates rattled Rio’s cage when he declared that organizers’ preparations were “the worst I have experienced” and even “worse than Athens” where construction for the 2004 Summer Games ran notoriously behind schedule.

In recent months, however, Rio 2016 appears to have rallied. The venues are only slightly delayed, and the gap appears closeable. Even so, there’s a borderline iron law of Olympic development: the closer the deadline, the higher the costs.

So, what does the IOC’s “Agenda 2020” have to do with Rio 2016? Turns out, not much. To be sure, Agenda 2020 recommendations, if converted into actual toothy reforms, could have benefited the Rio Games by limiting the number of freshly built venues.

But as Rio 2016 was chosen in 2009, its organizers are not bound by Agenda 2020 recommendations. That, however, hasn’t stopped the event’s luminaries from making strategic use of the program’s loose lingo. When in doubt, they trot it out.

For the Rio 2016 Organizing Committee, Agenda 2020 has become a strategic shield used selectively to deflect criticism and to defend its deficiencies. When construction delays forced Rio 2016 officials to consider shifting preliminary water polo matches from the Julio Delamare Aquatic Park to the main Olympic Park’s Maria Lenk Aquatic Center, they claimed this was simply in tune with the Agenda 2020 rationale. A spokesperson said, “One of the pillars of Rio 2016 is to deliver games that are economically sustainable and that is in line with Agenda 2020 framework.”

When the international swimming federation complained that Rio’s Olympic aquatic center was substandard compared to London 2012, the Rio Organizing Committee’s retort was that building a smaller facility simply chimed with Agenda 2020 sustainability principles. Rio 2016 issued a statement asserting, “everyone knows that the goal of Rio is to deliver sustainable Games in accordance with Agenda 2020.”

Then again, forging tactical connections to a phantom document is better than insulting the world’s top athletes. Recently, Rio Organizing Committee President Carlos Nuzman did just that. During an Olympic test-event for BMX racing in October, a brouhaha broke out when participants blasted the track as too dangerous.

Citing safety concerns, athletes banded together and unanimously refused to ride. “We shouldn’t have to race on such sub-standard tracks,” British BMX world champion Liam Phillips posted on social media. Nuzman respondedwith a glib dismissal. “Whoever wanted to race, should have raced,” he said. “Whoever chose not to race…I think they should look to be in another sport.”

In light of Brazil’s economic woes, Rio 2016 organizers recently announced a30 percent cutback to the Games’ operating budget. Fernando Meirelles, the Brazilian filmmaker who is overseeing the Olympic opening ceremony, revealed, “Since we joined the project the money has been cut, cut, cut.” He added, “We’re in a crisis and there are better places to put money in Brazil than just the opening ceremony.”

Rio 2016 will also replace a number of sturdier, more permanent structures with tents, the ticketing system will be revamped to cut costs, and the volunteer program will be slimmed. Organizers also recently said that the Olympic Village will not be equipped with fixed air-conditioning units, with athletes being forced to rent portable devices instead.

Rio 2016 Communications Director Mario Andrada told the BBC, “People get upset about luxury and excess, we have to tighten our belts.” But the projectslisted by the BBC as on the fiscal chopping block did not include the “luxury and excess” that IOC members have come to expect. Will such cost-trimming apply to the Olympic Brahmins who will jet into Rio, quaff fine wine, and luxuriate in five-star hotels?

The IOC was conspicuously mute about the budget cuts, although it did deliver a statement to Inside the Games that was a blend of the vanilla and telltale: “We will discuss this topic over the next few weeks with the Rio team, as we continue to look at how the implementation of Olympic Agenda 2020 can help Rio to make its Games as economically sustainable as possible.”

The statement was in fact revealing, capturing as it does precisely what is wrong about the idea of over-hyping the IOC’s moves toward reform. While the idea behind the Olympic Agenda 2020 program has potential, the reality is rather more PR masterstroke than genuine change. Another Tupac hologram—and this one is wearing Olympic laurels.

This article orginally appeared in Folha de S. Paulo.

Jules Boykoff is the author of “Power Games: A Political History of the Olympics, on sale May 2016.


Filed under: 2016olympics, brazil, sport