September 19, 2014
28 days until landmark tournamentFriday, May 16, 2014
W. Cup to decide Brazil’s political future
Bloomberg News (*)
Organization, performance of national team could determine who wins in OctoberRIO DE JANEIRO — The World Cup won’t only decide the planet’s best soccer team. The big spectacle’s success or failure will also help determine who’s going to govern Brazil.
Protesters yesterday blocked main highways and snarled traffic in various points of Sao Paulo, including one area located four kilometres from the city’s World Cup stadium, O Globo reported. Demonstrators marched against the elevated costs of hosting the world’s most-watched sporting event. Workers also went on strike in several cities, including Recife, where police and firemen walked out.
The tournament has become a test for President Dilma Rousseff ahead of elections in October. The euphoria felt when Brazil won hosting rights in 2007 under Luiz Inácio Lula da Silva has faded, and Rousseff, whom Lula chose as his successor because of her managerial skills, has more to lose than gain from the event, according to João Augusto de Castro Neves, analyst at political risk consultancy Eurasia Group.
“If it’s a huge flop, and you see problems with stadiums, or if it becomes clear that Brazil improvised to a great extent, it’ll fall into her lap,” Neves said by phone from Washington. “The government is the main body responsible here for hosting the event, so the opposition could benefit if the organization of the games is a failure.”
Demonstrations took place yesterday in 10 of the 12 cities hosting games over issues ranging from what the activists say are forced removal of people from homes to make way for cup-related projects, the amount of money spent on the event and the government’s failures to provide better health care and education.
The protests and the disruption they may cause add to a long list of potential logistical issues during the tournament, for which Rousseff would probably be blamed, Neves said. They include the possibility of transportation delays that keep teams and fans from reaching stadiums on time, power or water outages at venues, visitors victimized by crime and congestion at airports.
Last June, a bus fare increase sparked Brazil’s biggest demonstrations in two decades, bringing one million marchers into the streets to demand better transport, health and education services. The protests occurred during the Confederations Cup, a warm-up event for the World Cup, and drove Rousseff’s popularity to an all-time low.
Since then the marches have waned, largely because some splinter groups engaged in vandalism and violence, Neves said. For a time, the president’s standing rebounded.
Public opinion polls published since late March have shown Rousseff’s support dwindling again. In a Datafolha inquiry published May 9, 37 percent of those surveyed said they would vote for her in October, down from 44 percent in February.
The poll suggested she would not win in the first round, when a candidate must poll better than the total of her challengers.
In a second round against her leading challenger, Senator Aécio Neves, Rousseff was ahead by 47 percent to 36 percent, the poll showed.
With the election growing tighter, major protests during the World Cup would strike another blow to her popularity, especially if they disrupt tournament logistics, according to David Fleischer, a University of Brasilia political science professor.
“The opposition is probably licking its chops to see how this is going to play out,” Fleischer said by telephone. Political rivals will seize on disturbances “to say that she was neglectful, that she didn’t prepare well, that nothing was done to respond to the complaints of last year.”
The so-called Popular Committees of the World Cup organized yesterday’s protests. The largest demonstrations are slated for Sao Paulo, Rio de Janeiro and Porto Alegre, with about 8,000 people signed up to attend on Facebook. The tournament itself begins June 12, with the final in Rio on July 13.
“The World Cup has all the conditions to be a success,” Rousseff told reporters on May 13. She called on protesters not to disrupt the tournament.
The risk for Rousseff is that if something goes wrong during the tournament, the whole world will be watching, said a government official from the presidential palace with knowledge of the discussions there about the event. The official added that with reports having been negative, expectations have been lowered about the quality of the event. If the tournament comes off without any major disruption, such as protests or energy shortages interrupting games, it will be considered successful, the official said.
While the World Cup will play a role, Rousseff’s re-election bid hinges more on people's sense of the economy, with low unemployment offsetting inflation that’s eating away at purchasing power, according to Alberto Ramos, chief Latin America economist at Goldman Sachs.
With rising prices pinching Brazilians, consumer confidence in April dropped to a nearly five-year low. Inflation has re-accelerated, to 6.28 percent, after subsiding from a 6.7 percent high at the height of protests last June. The World Cup will produce another seasonal inflation increase, Finance Minister Guido Mantega told Agéncia Estado in April. Unemployment has remained near record lows, at five percent in March.
Brazil’s economy has grown at an annual average of two percent during Rousseff’s term, the slowest rate for a Brazilian president since Fernando Collor, who resigned in 1992 amid corruption allegations.
The ‘winner’ effect
One question being discussed is whether a World Cup victory by Brazil’s perennially strong national team would boost Rousseff’s political fortunes — or conversely whether a failure would damage them.
“If Brazil doesn’t win to distract people a bit, we’ll see them get furious at the government,” said Ari Santos, an equity trading manager at H. Commcor in Sao Paulo. “It diminishes Rousseff’s chances, because resentment will flare up.”
The last three elections weren’t influenced by the World Cup outcome. Brazil’s victory in 2002 didn’t save the ruling party’s presidential candidate from defeat. Lula won re-election in 2006 even as the national team lost, and in 2010 his hand-picked successor, Rousseff, won after Brazil flopped on the field in South Africa.
Brazil is spending about US$11 billion to host the World Cup. The 12 new and refurbished stadiums cost 8 billion reais (US$3.6 billion), or about 40 percent more than originally budgeted.
Eighty percent of Brazilians say that money spent on the stadiums could have been put to better use, according to a MDA survey commissioned by the National Transport Confederation in February.