Brazil 2016 – Giant at its Watershed
First of all: Happy Independence day to Brazil! One of the biggest economies in the world has been in the limelight this year for multiple reasons. Football-crazy nation sacked its sitting president and held the biggest event in the world. Many legends were born, many golds were won and many tears were shed during the Rio Olympics. We salute all the great athletes out there! There can be a success only when you work hard, every day.
Millions of people in Brazil long for better education and infrastructure while they witnessed from the distance how the multi-billion dollar construction work was conducted strictly for the Olympics, a sports event for the whole world, and in this entertainment business, it really does not matter how big the domestic issues from poverty to pollution might be. But has it all been good for business? What kind of reputation is left for South America’s biggest player? Investment-wise the Olympics must have been thought to do good for the economy by the ones who fought to get the competition there.
Brazil in numbers:
The 2016 Olympics were expected to boost Brazil’s economy. However, within 2016, it is expected that the real GDP growth of Brazil will stay below zero and might even hit -4%. It has also been pointed out that the 10th largest economy and the leader in South America and Latin America is mired in deep recession. Its GDP growth is notably lower than that of the world’s average and Latin American countries’ average due to depressed commodity prices and tighter regional monetary conditions. During 2016 and 2017, there can be seen a sharp recovery in Brazil’s GDP as consequence of temporary boost from the mega-event, Olympics. But it will not last long as it is projected that during 2017-2018 growth will be less than 1%.
Disbursed debt accounts for 3.8 billion dollars. While Brazil is mired in recession, the amount of debt combined with the low employment rate (only 54,4%) affects negatively the economic situation. A further deterioration in growth prospects for key commodity exporting EMDEs would negatively affect regional trading partners. For instance, a one percentage point decline in growth in Brazil or in Russia could reduce growth in neighboring countries by up to 0,5% on average within two years (World Bank 2016).
After the Olympics, the question arises what to make of all the costly constructions. There are some rumors about re-purposing the Rio 2016 structures; Temporary structures will be torn down and used for building schools. Athletes’ Village will be turned into luxury apartment complexes. Everyone is now waiting for the actual work to start.
Hard work, big rewards – Big risk, great possibilities?
Case: Brazil shows that Olympics might be bigger than life itself but numbers do not lie. Reaching a goal is always essential and the end game is yet to reveal its form. People around the planet saw how great measures can be taken in Brazil. This alone can create the feeling that everything is possible in the Portuguese-speaking giant but in the end, all this has been possible because of hard work and a lot of consistent planning. The saga continues when the aftermath is being calculated. Hard work, professionalism and the ability to see the future opportunities are good elements in the business world. Success is possible only if you agree that in life, as well as in business, the school actually never ends.
Will this Olympic hegemony eventually boost the economy, that is hard to tell at this point. More importantly, is the brand of Brazil and the chair in global councils more important than the opinion of the people who built it all, from the coast of Ipanema to jungles of Amazonia? Today we hope Brazil as a nation can celebrate at its finest. Get your Samba on, Saúde!