2014 World Cup in Brazil - Coursework Example

Major Analytic Paper: World Cup in Brazil Word count 2,436 Introduction This paper intends to conduct an analysis of the 2014 World Cup event in Brazil, anticipated gains and losses from hosting the event.Structural development is contextual. It would be expected that a country would adopt gradual structural changes as it develops (Eggertsson, 2005). This was not the case with Brazil as it prepared to host the World Cup event. Given the state of Brazil’s infrastructure it was forced to carry out abrupt structural changes as it prepared for the event. In discussing the rapid changes that Brazil has carried this paper adopted windows of opportunity as the theoretical concept under decisive moments theories to understand the economic and social changes that Brazil adopted in preparing for the World Cup. The triple bottom line theory was also applied to better understand the three dimensions of performance: finance, environment and social (Aghion&Durlauf, 2005). The World Cup is a short term once off event that takes place after every four years and has large-scale economic impact on the host country. It causes the host country to concentrate its capital expenditure and labour particularly in the services, transport, hospitality and construction sectors (Goldblatt, 2002; Herzenberg, 2010).  Discussion The World Cup is a global event that involves national football men’s teams engaging in month long competitions. The inaugural event was in 1930 and since then the event has been played every fourth year, except in 1942 and 1946 when World War II disrupted the tournament. The current format involves 32 national teams, representatives of all the continents, playing and losers eliminated before the final winner is decided (Herzenberg, 2010). In June 2014, Brazil will host a global event that will necessitate broad planning processes and intricate setups to be applied. On the one hand, the World Cup is anticipated to provide benefits to different socioeconomic sectors. On the other hand, it may present numerous risks, calling for operational management procedures in the private and public for the full realisation of the outcomes to the community (Getz, 1997; Rogers, 2008).The 2014 World Cup is anticipated to have a social and economicinfluence on Brazil. These influences will depend on Brazil’s ability to: acquire the essentialfunds and executeactivities in time for anefficaciousexperience; exploitthe World Cup’s bequests, changing them into stableresources; and,reach these goals in an economically operationalway, circumventingunwarrantedexpenditures and poor apportionment of fundsand opportunity costs (McCabe et al., 2000). The idea is to ensure that Brazil benefits from the World Cup legacy even beyond the event occurrence (Herzenberg, 2010). Economic impact It is estimated that hosting the 2014 World Cup event will boost the Brazilian economy by R$ 142 billion. It is anticipated that the event will create a flowing influence on investments within Brazil. The economy will balloon, growing by as much as 500% of the total sum spent on the event-associated undertakings and influencing different aspects of the economy. Apart from the R$ 22.5 billion used up by the government on the event to guaranteesufficientorganization and infrastructure, the event will fetchin afurther R$ 113 billion to the national economy, with incidentaloutcomesformedsubsequently. In aggregate, an extra R$ 142.4 billion will pour intoBrazil from between the year 2010 and 2014, creatingapproximately 3.6 million employment opportunities annually and spending R$ 63.5 billion in wages, which will predictablyinfluence the internalcustomer market (Ernst and Young Terco, 2014). The facilities built for the World Cup will produce R$ 18.13 billion in tax collection for the federal, state and local governments. The GDP will be at R$ 64.5 billion for the era between 2010 and 2014, an amount equivalent to 2.17 per cent of the 2010GDP that was reported at R$ 2.9 trillion (Ernst and Young Terco, 2014). TheWorld Cup event has a definite time frame; benefits from the infrastructure will only be realised dependent on the country’s capacity to benefit from theprospects and event bequests (Wooldridge, 2002). Given that the analysis is limited to the time period from 2010 to 2014.Consequently, the job creation estimatespresented have principallyfocused to cover the World Cup event’simpermanentworks only. The estimated 3.6 million works createdannually will be for the same time period. The precisesharing of annual jobs over the period will be contingent on a preciseconstruction and infrastructure development schedule. The economy segments that will benefit most from the event will include the; information services; utilities (urban cleaning, sanitation, water, gas and electricity); business services; beverage and food; and construction (Baade & Matheson, 2004). Together, these sectors will increase production by R$ 50.18 billion. Civil construction will produce a bonusof R$ 8.14 billion in the 2010 to 2014time. Overallamount produced from this sector isvalued at R$ 144.6 billion for the year 2010. Other economysectors that will gain from the World Cup event include business services, real estate services and rental, with the firstone making an extra R$ 6.5 billion and the later an extra R$ 4.4 billionduring thesame time period (Ernst and Young Terco, 2014). Of the entire R$ 29.6 billion in projectedexpensesconcerning the event, as well asguests’expenditures, private producing R$ 17.16 billion that will account for 58 per cent and R$ 12.5 billion from the public sector will account for 42 per cent.The total R$ 14.54 billion spent in the host cities infrastructure will result in the GDP rise by R$ 7.18 billion (Ernst and Young Terco, 2014). The poor in the host cities Large portions of the Brazilian populace live in abject poverty. It is this population that will suffer human rights abuses as they are forcibly evicted from their slum homes, their street vending businesses closed, and employed under poor working conditions to set up infrastructure. They will not be allowed to sale any merchandise during the World Cup event and their licenses will be withdrawn. The implication is that hosting the event not only made them lose their jobs but also made them lose their sources of livelihood. While other businesses will be cashing in on the event, they will be forced to watch and not cash in (Horne & Mansenreiter, 2006). Environmentally friendly event? Brazil would like to host an environmentally friendly event, but this is a dream that may not be realised: environmental laws are applied less strictly to World Cup infrastructure development activities. They have applied simplified environmental sustainability tests for the World Cup event and the constitutional amendments have amendments for the Forest law have been carried out such that formerly protected areas are now reclassified. Host cities that include Salvador de Bahia, Porto Alegre and Rio de Janeiro have as a result reduced the sizes of their protected areas to accommodate infrastructure development for the World Cup. Most of these changes have been carried out without impact assessment studies. They will have immense effects on further development (Damo & Oliven, 2012; Hall, 1997). Slums are flattened; hiding the poor The poor who lived in the host cities’ slums have been removed without compensation or being heard. It is anticipated that when the World Cup kicks-off in June close to 200,000 people will have lost their homes under the pretext of renewing towns and beautification exercises (Damo & Oliven, 2012). The right to housing is secured by the UN Social Covenant and the Universal Declaration of Human Rights. The rights associated with housing include access to safe water, energy sources, affordable housing. Naturally, the slums are not absolute. It may be necessary to conduct evictions to accommodate development projects, but even people without housing contracts may not be evicted arbitrarily: this would violate their human rights. The slum dwellers must be engaged in dialogues before they are evicted. They must be engaged in the planning and be allowed to provide alternate suggestions to make their eviction more tolerable (Hall & Sharpless, 2008; Kotval & White, 2013). The Brazilian constitution’s Article 6 assures the Brazilian citizens of housing as a basic right. As such, the slum dwellers have the right to the land on which they live, and by extension recompense either in the form of alternative housing or financial compensation. Everyone who is to be relocated has the right to indicate whether they favoursubstituteaccommodation elsewhere or financial reimbursement (Ernst and Young Terco, 2014). In preparation for the World Cup, slum dwellers were displaced to the city limits where access to social amenities was a problem. Those who had jobs lost them as they could not get to their places of work. The area did not have enough jobs for the people who had been relocated thus leaving them with little or no chance of earning an income. The relocations also destroyed social networks (Kotval & White, 2013). Recompense was very low with the amount distressingly inadequate to allow people live satisfactorily somewhere else. The former slum areas now have housing projects that the poor can ill afford. Those who tried to fight the evictions were forcibly evicted by the law enforcement agencies and/or their structures flattened without notice. One such case is the forced evictions of close to 9,000 people from the Sao Paulo neighbourhood of Pinheirinho where more than 2,000 law enforcement officers used violence to evict residents. Even a judicial order to halt the evictions was ignored (Ernst and Young Terco, 2014). Street vendors lose their business To ensure that the event sponsorsrevel inspecialrights to trade in their merchandise no exclusion zones were designated around the stadia and related infrastructure. Street hawkers will not be allowed to operate in the exclusion zones. The World Cup hosting rights stipulate that the host country will provide exclusive sales’ rights for FIFA and its partners. In line with this host cities have already invalidated all current street hawking licences they issued and no new ones are being distributed. This has left the street vendors in a legally precarious position as they could be subjected to extortion and harassment without redress. Currently vendors’ harassment have escalated with most of their goods being confiscated without compensation, their stands wrecked, fines imposed, and even subjected to physical violence. This has threatened their livelihoods (Damo & Oliven, 2012; Sterken, 2006). Some cities have set up shopping centres to house the street hawkers businesses. However, these shopping centres; don’t offer enough space for all the street vendors; are privately owned making them too expensive to rent space; and located away from the town centre (Damo & Oliven, 2012). Exploited workers The construction boom from setting infrastructure set up does not automatically infer that the construction personnel will benefit from the boom. Between 2011 and 2013, there were already 17 strikes on the construction sites of 9 stadiums in Salvador, Natal, Manaus, Recife, Fortaleza, Cuiaba, Brasilia, Belo Horizonte and Rio de Janeiro. In 2011, 1500 workers went on strike at Rio de Janeiro’s Marcana Stadium. They were demanding better safety measures and improved on-site working conditions after one of them was fatally injured in the sire. The strike ended after the workers had been assured of wage increases, and a committee on labour safety had been formed. In addition, an extension of health insurance was affected to include their families in compensation. A second strike was organised in 2012 to demand overtime pay and better working conditions (Ernst and Young Terco, 2014). Despite agreements to the contrary, most of the principal demands of the strikes remain unfulfilled. In response to the regular strikes and in recognition of their potential to paralyse the World Cup event, the government enacted new laws that limited the right to strike to up to 3 months before the World Cup event (Ernst and Young Terco, 2014). Conclusion The selection of Brazil as the 2014 World Cup host denotes a choice to sustainsubstantial investment. The proposalfor hosting was sustained by public fundsand assets that would have been used elsewhere. The trade-off that saw resources diverted towards the World Cup preparationswas the opportunity cost. Apart from the opportunity cost, there were other issues that included dislocation of people from their residents, local prices increase, inflation, public debt, intensified goods importation and profit drainages. FIFA and the Brazilian government so involved in their own deals that they ignored the intense disagreement and displeasure of some of the Brazilian people with Brazil being awarded the rights to host the World Cup event. They perceived the hosting rights as a lavish and exclusive event. They showed their displeasure during the 2013 Confederations Cup when they engaged destructive riots and running battles with the police. The protests began in the media even before Brazil was awarded the rights. They increasingly and openly protested on the basis that the event would cost a lot while doing very little to advance the quality of life in the country. The protested against the unjustified use of public funds to erect facilities that would not be used after the event while the country had health care, educational and safety problems to address. However, it is not too late to turn public opinion and ensure that the detriments are minimised or eliminated. FIFA and other sponsors must face up to their obligation and be involvement in bettering the Brazilians living settings. They must reliably commit themselves to validating that no human rights violations have occurred or workers exploited in the World Cup preparation and activities. They must also give Brazil a larger percentage of their profits to ensure that Brazil’s debts from hosting the event are minimised. With a whole month still to go before the event kicks off, Brazil’s preparedness for the event is in question. FIFA had initially set a 1st January deadline for infrastructure set up completion but had to revise this data several times as it become clear that Brazil was overwhelmed with activities. In fact, a review of the infrastructure shows that of the 12 stadia that will host the matches, 3 have not been completed. The country’s citizens have also stepped up their protests. They are denouncing perceived corruption and the ever rising costs of setting up infrastructure for the event. For example the Itaquerao stadium that had been initially allocated $152 million, has now exceeded its budget by over $200 million. In fact, from 2007 when over 72% of the population supported Brazil hosting the event the number has dropped to just over 50%. These sentiments have gained popularity after the government covered 80% of the preparation costs even though in 2007 it had promised not to use any public funds. References Aghion, P. & Durlauf, S. (2005). Handbook of Economic Growth. New York: North Holland. Baade, R. & Matheson, V. (2004). The Quest for the Cup: Assessing the Economic Impact of the World Cup, Regional Studies, 38(4), 343-354. Damo, S. & Oliven, G. (2012).BrasilcomoSede de la Copa del Mundo de la FIFA. Barcelona: Editorial UOC. Eggertsson, T. (2005).Imperfect Institutions: Possibilities and Limits of Reform. New York: Cambridge University Press. Ernst and Young Terco (2014). Sustainable Brazil: Social and economic Impacts of the World Cup. New York: Ernst and Young Terco. Getz, D. (1997). Event Management and Event Tourism. New York. Cognizant Communications Corporation. Goldblatt, J. (2002).Special Events - Global Event Management in the 21stCentury (3rded.). New York: Wiley. Hall, M. & Sharples, L. (2008).Food and wine festivals and events around the world: development, management and markets. Oxford; Burlington, Mass. U.S.A. Elsevier. Hall, M. (1997).Hallmark Tourist Events: Impacts, Management and Planning. Chichester. John Wiley & Sons. Herzenberg, C. (2010). Player and Referee: Conflicting Interests and the World Cup. Cape Town: Institute for Security Studies. Horne, J. & Manzenreiter, W. (2006). An Introduction to the Sociology of Sports Mega-Events. Sociological Review, 54(2), 1-24. Kotval, Z. & White, S. (2013). Financing for Local Economic Development, 2nded. New York: M.E. Sharpe Publishers. McCabe, V., Poole, B., Weeks, P. & Leiper, L. (2000).The Business and Management of Conventions. Brisbane: John Wiley. Rogers, T. (2008).Conferences and Conventions (2nd ed.). Oxford: Butterworth-Heinemann. Sterken, E. (2006). Growth Impact of Major Sporting Events, European Sport Management Quarterly, 6(4), 375-389. Wooldridge, J. (2002). Introductory Econometrics: A Modern Approach (2nded). New York: South-Western College Publishers. Appendices Appendix I: Understanding the theoretical framework applied in the paper The decisive moment theory hypothesizes that a shock has the opportunity to change a countries position. The shock can be geographic, climatic, demographic, and technological or any combinations of these named. It generates conditions in which the existing political and economic institutions are changed expressively and considerably. The theory approaches societies as the chief elements of economic progress such that the changes announced by the decisive moment mark a crucial change in the developmental path. In addition, the theory has two additional defining harmonies. The first is that the society nature determines the nature of the development. All-encompassing societies increase long-term growth while the non-encompassing ones lead to breakdown. The second is that societies have a solid strengthening nature that shows robust tenacity of power associations and consequences over time. By defining who has power, voice and access to the economic rents, the new circumstances introduced by the decisive moment ensures self-perpetuating paths, where openness breeds more openness and fosters growth, while concentrated wealth and power endures and limits growth in the long run (Eggertsson, 2005). The triple bottom line theory is an accounting framework that integrates three dimensions of measuring performance: finance, environment and social. This framework offers a unique view of the social and environmental measures, in addition to the financial measures thereby providing a more holistic view of outcome (Aghion & Durlauf, 2005). Read More