O Globo reported Sept. 24 that total planned spending next year on the 2016 Olympics will be US$ 2.2 billion, equivalent. This includes federal, state, city and private sector spending in partnership with the government. The earmarked funds, which will pay for the remodeling of the Maracanã soccer stadium, new express bus corridors, additional bike paths and upgrades for all of Rio’s favelas, among other projects, seem impressive at first. But a simple Google search shows that this merely represents a good start.
According to the International Monetary Fund’s Finance and Development newsletter,
“Projected [Olympic] budgets are never enough to cover actual costs. Athens initially projected that its games would cost $1.6 billion, but they ended up costing closer to $16 billion (including facility and infrastructure costs). Beijing projected costs of $1.6 billion (the operating cost budget of the Beijing Organizing Committee for the Olympic Games), but the final price tag was $40 billion, including facility and infrastructure expenditures such as expansion of the Beijing subway system.”
And, according to the Daily Telegraph, London is spending almost US$ 15 billion equivalent on the 2012 Olympics in public funding. The first paragraph of the article, published this month, brings a chill to the spine: “London won the right to host the 2012 Olympics with the economy booming and the FTSE 100 at 5,229. Five years later, following one of the deepest recessions in history and with the stock market still struggling to clear 5,500, the value of the Games to British businesses has evolved to an extent few could have imagined.”
Brazil’s economy is, well, booming. And, as the British have discovered, a great deal can come to pass in six years. But it is reassuring to read on in the Daily Telegraph, which says that the Games will have a positive impact for UK business, especially for the construction industry, which is likely to also be the case in Rio. The income is much more important now for the UK economy than it was back when London won the Olympics.
How much will the total tab be, in Rio? What effect will the Olympics have on Rio de Janeiro’s finances? And what will Brazil be like in six years? Riorealblog will return to these questions as soon as possible.