Gold at what Cost? Rio Olympics and the Humanitarian Crisis

In Development, Economics, Finance and Budget, People by Vijay Jayaraj0 Comments

The Olympic Games in Rio have highlighted a drastic divide between the world’s elite and the world’s poor. And, while everybody knows about the beaches and slums of Rio (not to mention the deplorable condition of much of the rest of the country), nobody dares to question the impact the Olympics will have on conditions there—it’s just assumed to be positive.

Brazil is at its weakest since 1930s—economically and politically. Earlier in the year, an opinion poll found that 63 percent of Brazilians agreed that hosting the Olympics would cause more harm than good for Brazil.

Opinion polls are not necessarily reflective of the ground reality, but unfortunately the Brazilians were right this time.

For the poor in Rio, the Olympic Games is nothing but a luxury they can’t afford. The slums of Rio house nearly a million people, many of whom are the poorest in the country. In comparison to the large sum spent on the Olympics, little has been done to alleviate the poverty of these people.

In fact, the financial aid for the improvement of the city’s essential services such as public transportation, housing development, and pollution control—have been put on-hold because of the current recession that the country is going through, the worst since the recession of 1930s.

Unemployment is on the rise, and the price of basic commodities has increased over the past year.

The economic forecast is bleak. The recession will probably wipe out 9 percent of GDP by the end of 2016.

Loss of jobs and more austerity measures are in the cards for the locals.

The state of Rio, which is reeling under such a huge recession, will be responsible for meeting a quarter of Olympic related costs, which is estimated to be $12 billion.

In July, the local organizing committee was reported to have a deficit of $121 million to $151 million. The cost of the Olympics itself is said to have exceeded the initial budget by 51 percent.

Hosting an event of such magnitude would cost dearly even for the developed countries. Despite its aesthetic value and rich heritage, this Olympics has turned out to be an impediment for the development of Brazil.

Given the current socio-economic climate in Brazil, the nation should have prioritized the welfare of its citizens by investing in sectors such as energy and infrastructure that help improve the everyday lives of its people.

In the coming months, it is critical that Brazil introduces measures that will accelerate its economic development, and tackle the rampant poverty and unemployment levels. The developed nations too should refrain from imposing developmental and energy policies that are detrimental the economy of Brazil.

The venues for future games, especially those in developing countries, must be done only after careful calibration. Public services and implementation of developmental policies must be prioritized over hosting the Olympics.

The party in Rio is over, but the terrible economic situation facing the poor, and the unemployed, is far from resolved.

Featured image courtesy of seier+seier/ Flickr CC.

Vijay Jayaraj (M.S., Environmental Science) is the Research Associate for Developing Countries for the Cornwall Alliance for the Stewardship of Creation. He currently lives in Udumalpet, India.

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