The Rio Olympics: one year on

A country in political meltdown and economic retreat, a city and state in financial turmoil and facing a public security crisis, organisers with unpaid debts and struggling to fulfil their lofty legacy promises. One year on from the Rio 2016 Olympic and Paralympic Games, how did it come to this?

The Rio Olympics: one year on

When Brazil won hosting rights to South America’s first Olympic Games in 2009, heady optimism permeated across what was then a thrusting new entrant to the global stage. Back then, the country’s economy was booming, politicians enjoyed unprecedented popularity and poverty and unemployment were in steep decline. It was a time of unbridled celebration.

While the nation looked towards a more prosperous, cleaner and safer future, Brazil’s bid to host the world’s two largest sporting events back to back - the 2014 Fifa World Cup, swiftly followed by the 2016 Olympic and Paralympic Games - was seen not as an implausible pipe dream, but merely an affirmation of its arrival as an economic power. The belief that the country could pull off this unlikely doubleheader was genuine, not least among Brazilians themselves.

Seven years later, however, Brazil’s outpouring of national pride had bottlenecked into a torrent of negativity. By the time the Games rolled around the country was in political meltdown and full-on economic retreat. The suspension and subsequent impeachment of president Dilma Rousseff overshadowed Brazil’s moment in the global spotlight, and it was left to her eventual full-time replacement, the not exactly popular Michel Temer, to deputise come Games-time.

Almost a year on, Brazil remains in its deepest recession in a century. Dozens of high-ranking politicians and businesspeople have been ensnared as part of Operation Car Wash, a sprawling Federal Police probe that began three years ago and has since expanded into the largest corruption scandal in Brazil’s history. The state of Rio has spiralled ever deeper into debt - its deficit is now thought to total R$20 billion (US$6.29 billion), drying up funding for vital public services and leading to a large-scale security crisis - and the Rio 2016 local organising committee is in a similarly dire financial situation.

Meanwhile the host city has been left saddled with a herd of white elephants, the majority of Games venues having been left abandoned since the sporting world packed up and moved on. How, then, did it come to this?

The financial turmoil

The exact cost of last summer's Games is not known, and likely never will be. Data released in June by the Governing Authority of the Olympic Legacy (AGLO) put the final price tag at upwards of R$42.8 billion (US$13.1 billion) - around R$14.5 billion (US$4.4 billion) over budget - but the figure is considered an estimated guess given Rio authorities stopped providing Olympics cost data in December. In reality, it is likely to be much higher, with some estimates putting the final cost, from a mix of public and private financing, closer to US$20 billion.

The spiralling cost of the Games left Rio's cash-strapped organisers scrambling to pull together funds, with suppliers and creditors knocking on the door and hundreds of unpaid workers threatening legal action. As Rio 2016 spokesman Mario Andrade lamented in November, organisers were "struggling a bit in making the ends meet”, a sentiment echoed by Sidney Levy, the chief executive of the Rio organising committee.

“The whole thing was too painful,” Levy told The Associated Press earlier this year. “We never really enjoyed the Games themselves; 2016 was just extremely hard. It’s like we were climbing Everest, and ice is falling on your lips, and you are not seeing.”

In early July, Rio 2016 organising committee president Carlos Nuzman (left) travelled to International Olympic Committee (IOC) headquarters in Lausanne seeking financial assistance to pay outstanding debts of between US$30 million and US$40 million.

Following the meeting, the IOC said it had already contributed a “record” US$1.53 billion towards staging last year's Olympics and that it “has closed all its obligations” with the Rio organisers. It added that, in addition to record help for Rio, there had been “an exceptional effort” to make “significant cost savings” with “additional financial undertakings by all the Olympic stakeholders, which amounted to hundreds of millions of dollars.”

Despite its unpaid debts, the local organising committee has begun the process closing its accounts. However, the committee will not be able to cease operating as a legal entity until all debts and legal cases are resolved. In May, federal police in Brazil were also said to be looking into allegations of possible financial mismanagement at the country’s National Olympic Committee (COB), which is headed by Nuzman. The allegations are thought to relate to the misuse of public money.

The political and economic disarray

There can be no denying that the Rio organising committee’s cash-flow crisis is inextricably linked to Brazil's recession. According to Maurício Santoro, a political scientist and professor at the State University of Rio de Janeiro, the Brazilian economy is smaller today than in 2010, the country’s GDP having shrunk by more than three per cent in each of the past two years. Unemployment in the state has risen to 14.5 per cent, with eight of every ten Brazilians who have lost their jobs this year living in Rio.

Much of that, as Santoro writes in a recent article for Americas Quarterly, is down to the way in which local authorities combined staging the Games and the 2014 Fifa World Cup with ‘an old staple’: corruption. ‘The mixture was explosive,’ he adds, ‘and now that the party’s over, we are left in tatters, picking up the pieces.’

The IOC - and Fifa, for that matter - had no sense and no idea whatsoever about what the consequences were going to be. 

Santoro notes how the malfeasance in Brazil’s political system has long been cancerous and its scale staggering, with every governor elected in Rio since 1998 either facing corruption charges or serving a sentence. He adds that the lucrative building contracts and ensuing construction boom brought about by the arrival of sport’s two biggest events only spawned new opportunities for corruption, with deals between politicians and large construction firms for venues and other infrastructure inflated and founded on sizeable tax exemptions.

“There aren't any secrets any more,” says Andrew Zimbalist, an economist at Smith College in Massachusetts and editor of the upcoming book Rio 2016: Olympic Myths and Hard Realities. “The political culture in Brazil has taken a turn for the worse. It’s been a political culture that’s been deeply involved with corruption and payoffs. To expect Brazil to be able to handle the billions of dollars of construction for the 2014 World Cup and then the 2016 Olympics without exacerbating that political culture of corruption was foolhardy.

“The IOC - and Fifa, for that matter - had no sense and no idea whatsoever about what the consequences were going to be. All of this was anticipatable if anybody had bothered to look at it.”

If the financial and political consequences were dire, the social ramifications have been profound. It is estimated that as many as 100,000 people were evicted from Rio’s favelas to make way for large-scale construction projects and new real estate developments tied to the Games, exacerbating the deep distrust for elected officials that already existed among the city’s poorest people.

Most troubling of all is the fact that wasted public money has contributed to shortfalls in funding for vital services such as policing, schooling and healthcare. Protests from unpaid civil servants against the corruption, crony politicians and overspending on the Olympics in general were a feature of the months and years leading up to the Games; since they concluded, crime has spiralled to the highest levels in a decade, with street violence and stray bullets having become a daily reality. Just last week, thousands of armed forces were deployed to Rio’s streets as part of federal efforts to increase security and preserve public order.

But Rio’s financial woes are by no means a result of staging the Games alone. A decline in royalties from offshore oil, coupled with an increase in pension costs, conspired to plunge the city into a fiscal nosedive. One major employer in Rio, Petrobras, the state-controlled oil giant, was badly hit by the economic downturn and its woes have only been exacerbated by the fallout from Operation Car Wash, which has resulted in accusations against more than 300 officials, and more than 150 convictions in total.

Three politicians who were instrumental in winning and preparing for the Olympics have been caught up in the scandal. Former Rio governor Sergio Cabral, who was detained in November, has been jailed on counts of corruption and money laundering in June. Luiz Inacio Lula da Silva (right), the once-beloved president of Brazil from 2003 until 2011 who memorably spearheaded the country's push for the Olympics, was sentenced to nearly ten years for similar offences in July pending an appeal, while Eduardo Paes, the former Rio mayor who served as the public face of the Games, has also been named in the ongoing investigation.

Paes, who moved to New York City after leaving office at the end of 2016, has been forced to deny claims he accepted bribes totalling more than US$5 million from executives at Odebrecht SA, the construction firm at the centre of Operation Car Wash, for favourable contracts tied to the Olympics. He has denied all wrongdoing while his spokesperson has called the allegations “absurd”.

All the while Rio has descended ever deeper into economic chaos. By June, the situation had grown so dire that local authorities slashed funding for the city’s famed Carnival - although some believe the move was motivated by the religious beliefs of Rio’s new Evangelical mayor, the former Pentecostal bishop Marcelo Crivella, who replaced Paes in January.

The white elephants

At last August’s closing ceremony, IOC president Thomas Bach boasted of “a much better Rio de Janeiro after the Olympic Games”, but nearly 12 months on many of the venues built or renovated for the Games have become white elephants. With local authorities financially stricken and facing a public security crisis, the list of Operation Car Wash ensnarements mounting up and venue management disputes raging on, many of the event’s centrepieces have been left abandoned and fallen into disrepair.

In venue planning terms, the Games have proved an unmitigated failure. In the months since their conclusion, Stephen Wade, an Associated Press sportswriter based in Rio, has provided reams of damning evidence spotlighting organisers’ broken promises and general neglect. His videos, posted on social media, have laid bare the extent of the abandonment, painting a bleak picture of vacant, decaying facilities struggling to find a use.

As the centrepiece of the Games, Rio’s iconic Maracanã stadium has garnered much of the global attention. Since hosting the opening and closing ceremonies, Brazil's most cherished sports venue has been vandalised, many of its seats ripped out and scores of windows smashed. Its energy supply has also been cut off as the state of Rio, the stadium’s owner, has fought with local soccer clubs and the venue operator over who is responsible for unpaid bills. In January, the Rio de Janeiro State Court of Justice ordered the operators, a consortium of companies led by Odebrecht, to resume maintenance of the Maracanã, although the venue sits largely unused to this day.

Rio’s famed Maracanã stadium, seen here in January, has fallen into disrepair while local authorities and venue operators have argued over unpaid energy bills.

Images of the Maracanã’s scorched, un-mowed field have circulated online since the Games. The venue’s state of disrepair is such that the Brazilian Football Confederation (CBF) opted to stage no home qualification matches there ahead of next year’s Fifa World Cup in Russia.

Elsewhere, at least four of the venues in the Barra Olympic Park, the main focal point of the Games venues which opened to the public in January, have been taken over by the Brazilian Sports Ministry, which intends to operate them until at least the end of 2018. Due to high maintenance costs, however, the ministry is seeking a private operator for the park, where the Future Arena, which was meant to be converted into four schools after the Games, and the Aquatics Centre are yet to be fully dismantled for lack of funds from the federal government. A Rio City Hall spokesperson recently told Around the Rings, a specialist Olympic news outlet, that the deadline for their dismantling will be extended, yet it is not known when that will be.

"It’s not going to be be sustainable to collect the return needed to maintain these facilities solely with revenues generated by sporting events," said Pedro Sotomayor, an executive director at the sports ministry’s venue management agency told Bloomberg in June. "We are talking to various companies in the private market to help fill this gap with events like Comic-Con and Rock in Rio."

As it stands, many of the venues in the Olympic Park are boarded up, while there are few amenities for visitors within the park itself. To make matters worse, the track and roof of the park’s US$45 million velodrome, which re-opened in May for the first time since the Games, were damaged by fire in late July when the building was struck by a hand-made lantern, prompting the AGLO to open legal proceedings.

Another of the Games’ central locations, the Deodoro Olympic Park, was shuttered after its operating contract elapsed at the end of last year. Talks are ongoing to find a new operator for the venue, which is located in one of the poorest parts of the city, but officials at Rio City Hall have said the earliest it could reopen is September. Prior to the Games, organisers pledged to transform the Deodoro park into a leisure area featuring a public swimming pool, which would be repurposed after being used for canoe slalom events at Rio 2016.

Other venues remain similarly under-utilised. Rio’s US$20 million Olympic golf course, controversially constructed on the site of a nature reserve, is struggling to attract paying members and non-Brazilian players willing to fork out US$180 for 18 holes, while the athletes' village is all but devoid of human life. Wade reports that less than ten per cent of the private apartments created in the village, which was built at a cost of US$700 million and features 3,600 residences, have been sold to date.

Rio’s apparent lack of post-Games planning for its key venues has been the focus of an investigation led by Leandro Mitidieri, a federal prosecutor in Brazil who oversaw a public hearing into the city’s legacy arrangements in May. "They are white elephants today," he said. "What we are trying to look at here is to how to turn this into something usable."

Adding to the embarrassment for the local organisers, more than 100 medals awarded in Rio have had to be repaired after they showed signs of rusting. But it is not all doom and gloom. In contrast to the bleak outlook for many of the Games venues, Rio’s transport system has fared somewhat better.

The Games were the catalyst for the construction of a new subway line, a high-speed bus network and other improvements, while Rio’s international airport and port area were also renovated. Though much of the new transport infrastructure has been criticised for only benefitting the wealthiest portions of Rio’s population, and while the cost of many of the contracts awarded for projects were driven up due to corrupt dealings, it is clear the upgrades would not have been made were it not for the Games.

To point out that there are a couple of enduring benefits is really disingenuous. Either that or it’s bad economics.

“When you spend US$20 billion, which is what Rio spent, it’s inevitable that some of the stuff you do is going to be somewhat useful,” says Zimbalist, whose upcoming book looks closely at the social and economic legacies of Rio 2016. “Some of the stuff that was done downtown - with the museums, some of the transportation - it has some value. But of that US$20 billion, maybe there’s US$2 billion, give or take, that is positive.

“But the point is, there’s no reason to spend US$20 billion to get US$2 billion, or whatever that number might be, of worthwhile investment. To point to that, to point out that there are a couple of enduring benefits, is really disingenuous. Either that or it’s bad economics.

“We’re talking about a city that doesn't have basic services, communities that don’t have plumbing and electricity, and you’re creating museums downtown - why? They were hoping it was going to create a more enticing tourist environment, but that’s not going to work. People don’t go to Rio for the museums.

“Yes, you can say that there was some positive stuff. But that doesn't justify it economically. You also have Rio de Janeiro with a much worse reputation because people around the world know negative things about Rio that they never knew before.”

Rio's Aquatics Centre, photographed in February.

In the run-up to last summer's Games, Rio's widely publicised troubles saw the city fall victim to a form of public shaming that was ironically befitting of an occasion trumpeted within the Olympic movement as the biggest social media event ever staged. The foreign press descended on the city en masse and quickly set about dissecting the deepest recesses of Brazil's national psyche and the cultural underbelly of a deeply afflicted society.

From start to finish, the Brazilian people were hung out to dry with little protection from the negative stories dug up and dished out online. But despite all the evidence that has emerged detailing Rio’s plight since staging the Games, the IOC has been customarily defiant on the Games’ legacy commitments.

In March, the committee released a four-page factsheet designed to switch up the narrative and talk up the long-term benefits in terms of venues, transport infrastructure, educational and development projects, and environmental legacies. As well as insisting Rio’s post-Games planning began “from the time the city first considered a candidature”, the IOC’s document went on to say the Games “set new standards for legacy planning that have left an important heritage".

In terms of urban legacy, the IOC claimed that, thanks to the Games, the percentage of Rio’s population with access to high-quality transportation rose from 18 per cent in 2009 to 63 per cent in 2016. The committee added that for each reai invested in sports facilities, a further five reais were invested in legacy projects, ‘helping to improve the quality of life for people beyond the Games’.

The Paralympic movement

One immediate casualty of Rio’s financial travails was the International Paralympic Committee (IPC), which found itself scrambling to deal with the worst crisis in its 56-year history just days out from the start of September’s Paralympic Games.

As the Olympics drew to a close in August, the Rio organisers were forced to make major cuts to their Paralympic budget, their cash reserves drained by an ailing Brazilian economy, plugging gaps at the Olympics, and disappointing ticket and sponsorship sales. Venues, transport, volunteer staff and media facilities had to be scaled back, while a government bailout running into many millions was required to cover the organisers’ crippling budget shortfall and to pay vital travel grants required by smaller nations to send athletes to the Games. 

In the end, however, the Rio Paralympics delivered higher attendances than any edition outside London, while all outstanding payments, including travel grants, were paid in full to Paralympic stakeholders by December of last year.

“We got there in the end,” reflects IPC spokesman Craig Spence. “It wasn't ideal for us, but the one thing that is interesting is the Rio Paralympic Games probably surprised all of us, bearing in mind that, one month out from the Games, we were planning for potentially having to cancel them, such was the financial situation.

“We managed to get some money to put the Games on. Why? Well, we were very clear that this isn't just a two-week sporting event; this is something that can change Brazilian attitudes towards disabilities, encourage more Brazilians with an impairment to get active. You’ve invested a lot into these Games, it would be silly now to pull the plug on it.”

Let’s be realistic. A lot of money went into those Games and now if there’s any spare money available, the Brazilian government is going to spend it elsewhere.

One of the “most positive”, tangible legacies of the Games, says Spence, is the Brazilian Paralympic Training Centre in São Paulo. Though located outside the host city itself, the facility would not have been built had Brazil not won the right to stage the Games. “It’s probably one of the best Paralympic sporting facilities in the entire world,” he says. “It will benefit the Brazilian team for years to come, but also the Brazilian Paralympic Committee have opened that up to other countries in the Americas to benefit from.”

Built with support from the federal government, the facility opened in January 2016 and has since hosted the São Paulo 2017 Youth Parapan American Games this March. Spence says more para-sport events will be staged there in future, but he adds that the IPC is staying “patient” for now as the Brazilian economy battles against its debilitating recession. It is hoped that other Rio 2016 venues will be utilised for future international para-sport events, too - the Olympic Park's fire-damaged veldodrome, for example, is reportedly in the running to stage the 2018 Para-cycling Track World Championships.

Echoing others in the Paralympic and Olympic movements, Spence argues that the post-Games transformation of venues in Rio needs time. “I’m always a firm believer of never judging the legacy of a Games within a year,” he says. “A legacy should be judged over ten, 15, 20 years’ time.

“The Olympic Park in London shut down for a year whilst they remodelled everything. The stadium wasn't inhabited straight away and obviously there was a lot of work done on the aquatics centre. London took some time to deliver on its legacy areas and Rio’s not been blessed with a strong economy - it’s come at the wrong time.

“Let’s be realistic. A lot of money went into those Games and now if there’s any spare money available, the Brazilian government is going to spend it elsewhere at the moment, rather than trying to build on the legacy.”

Still, Spence notes the way in which Brazilian attitudes towards disability have, anecdotally at least, improved since the Games. “The BPC has seen an increase in participation since the Games,” he says. “It’s easier to get a job in Brazil now if you have an impairment, partly because the views of people in Brazil have changed. 

“If you were to put out a marketing campaign to change attitudes towards disability in any country, it would cost multi, multi-millions. We can do that with the Paralympic Games, which also delivers more accessible infrastructure - something that doesn't just benefit people with an impairment but also an ageing population.

“No two Games are the same because the circumstances are always different. Had London had its recession at the end of its Games rather than in the build-up, things in London may look very different to what they are today.”