By Diego von Vacano and Thiago Silva
We continue our series on politics, political science and the World Cup (here are posts 1, 2, 3, 4, 5 and 6). Today Thiago Silva and Diego von Vacano (both Texas A&M) put the protests surrounding the World Cup into some context.
For over a year now, many
Brazilians have been protesting the country’s hosting of the 2014 World
Cup. This is understandable as Brazil entered a recession last year and
inequality remains widespread. However, viewed in a broader context, the
protests are paradoxical, because Brazil has enjoyed very significant
social and economic improvements since the country bid for the event in
2003. The principal reason for the protests has more to do with the fact
that this global event is a unique opportunity to air domestic policy
disagreements in a way that will receive wide media attention rather
than the expenditures on the World Cup itself.
As
one of the authors of this article arrived in Sao Paulo on June 5,
metro workers carried out a paralyzing strike. Sometimes these protests
have been violent and have often blamed the government for hosting the
2014 World Cup instead of focusing on social services. Yet, as we see in
Figure 1 below, the government has never spent as much on social
welfare as in the past decade.
Note:
The values are adjusted for monthly inflation in the country by the
IPCA (National Consumer Price Index). The values, originally in Reais
(Brazilian currency), were converted to US dollars according to the
exchange rate on May 30 2014 (R$1.00 = $0.44).
Source: Developed by the authors based on Institute of Applied Economic Research data (IPEA, 2012).
One can see from Figure 1 that the two social program areas with the
highest levels of expenditure by the federal government in 2010 were
health and education ($30.3 billion and $20 billion respectively). The
total social program expenditures in 2010 in the four areas analyzed
reached $84.3 billion (the overall social program spending by the
Brazilian government in the same year was $280.9 billion).
At the same time, as we can see in Figure 2 below, the Brazilian
unemployment rate reached its lowest level last year according to the
analysis we carried out (for the period 1995-2014).
* The information for 2014 represents the average value of the first three months of 2014.
Source: Brazilian Institute of Geography and Statistics (IBGE, 2014).
Moreover, poverty has been reduced very significantly since 2003 (the
year that Luis Inácio Lula da Silva of the Workers’ Party became
president). There is a downward trend in both general poverty and
extreme poverty rates in Brazil, with the lowest rates in the last year
considered in this study (15.96 and 5.3 percent respectively).
*
There is no information for the years 2000 and 2010. The values in the
chart for these years are the mean between the previous and following
year.
Notes: The extreme poverty line considered here is an estimate
of the value of a food basket with minimum calories required to
adequately support a person, based on recommendations by the
International Labor Organization (ILO). The poverty line, in turn, is an
estimate of the value of two food baskets with minimum calories
required to adequately support a person, based on the recommendations of
the ILO.
Source: Developed by the authors from IBGE data.
Much has been made in the protests about the supposedly high levels
of government spending on the World Cup at a time when there is a need
for social program expenditures. However, the actual amount spent by the
Brazilian government on the World Cup, especially on stadiums, is very
small relative to the total amount of social program costs. Figure 4
shows a breakdown of the World Cup investments by the government.
Note:
The values, originally in Reais (Brazilian currency), were converted to
US dollars according to the rate on May 30 2014 (R$1.00 = $0.44). These
values represent the total amount invested by federal, state, and
municipal governments and private entities.
Source: Determined by the
authors from official data available through the ‘Access to Information
Portal’ of the Brazilian Government.
Total investments in the 2014 FIFA World Cup by the Brazilian
government amounts to $11.2 billion. According to official data, these
investments were provided by federal, state and municipal governments,
as well as private entities. Also, according to public official
information, the Brazilian federal government spent $1.76 billion
specifically on the construction of stadiums.
Now let’s look at social program expenditures in the same period.
Between 2010 (the year that the investments on the World Cup and for the
construction of stadia began) and the beginning of 2014, the Brazilian
federal government invested $363 billion in health and education (the
two social sectors that receive the greatest amount of investment by the
government).
So, comparing expenditures on the World Cup and investments by the
federal government on health and education, we can see that the former
represents only 3 percent of the total of the latter two expenditures
(the total of all forms social spending is $385.4 billion). Protestors
claim that the government is spending too much on stadiums while
neglecting health and education. Perhaps, but stadiums are only about
0.5 percent of the total amount invested in these two social sectors in
the past four years.
Source:
Determined by the authors based on information extracted from the
‘Access to Information Portal’ of the Brazilian Government.
We must also recall that the federal investment in stadiums (as we
mentioned, $1.76 billion) was done via BNDES, the Brazilian Development
Bank and reflects only a small percentage of the total invested by the
bank in 2010, which was $260 billion. Additionally, revenue from the
2013 FIFA Confederations Cup amounted to $3.88 billion, according to a
study by the Institute of Economic Research Foundation (FIPE-USP).
Revenue expected from this World Cup are estimated at $12 billion
according to the same study.
The protestors’ ire is
understandable given inequality and poverty in Brazil. Perhaps any
spending on items such as soccer stadiums is too much in that context.
Yet, it may also be that the protests are less about these expenditures
per se than that they use the World Cup as an opportunity to draw
attention to problems that have little to do with soccer’s main
tournament.
Despite significant progress over the past decades, and according to a
United Nations report released in 2012, Brazil has one of the highest
levels of income inequality in the world. The country is considered the
fourth most unequal nation in Latin America in terms of income
distribution. This high inequality, as well as anger at corruption (both
of which predate the World Cup), ought to be the main targets of the
protests, not the global soccer event. Income disparities and graft are
probably the root reasons why protests are taking place.
The protestors are likely taking advantage of a high-visibility event
to attract media attention to Brazil’s perennial structural problems.
Another contributing factor may be Brazilians’ perception of FIFA as imposing and arrogant.
The core problems of a contracting economy and rising inflation, which
are not dependent on the World Cup, are the real source of the wrath of
those marching in the streets of cities like Rio and Sao Paulo.
Thiago Silva is a doctoral student in the political science
department at Texas A&M University and has a master’s degree in
political science from the University of Sao Paulo, Brazil. His research
interests include democratization processes, along with comparative
legislative and economic voting in developing democracies.
Diego von Vacano is associate professor of political science at
Texas A&M. He is a political theorist, also interested in Latin
American politics. He is currently doing research on the Brazil World
Cup 2014 and on immigrants in Sao Paulo. He is the author of “The Art of
Power and The Color of Citizenship.”
Note: A few minor corrections were made after publications.
“Perhaps, but stadiums are only about 0.4 percent of the total amount
invested…” was corrected to “Perhaps, but stadiums are only about 0.5
of the total amount invested…” This was also corrected in figure 5.
” with the lowest rates in the last year considered in this study
(5.96 and 5.3 percent respectively).” was corrected to “” with the
lowest rates in the last year considered in this study (15.96 and 5.3
percent respectively).”
“Between 2010 [...] the Brazilian federal government invested $374
billion in health and education (the two social sectors that receive the
greatest amount of investment by the government).”. The correct is: ”
[...] the Brazilian federal government invested $363 billion in health and education.
