Opinion: Brazil is Living in Interesting Times. Unfortunately.

Opinion, by Michael Royster

RIO DE JANEIRO, BRAZIL – Tradition has it that the Chinese have used, for many years, a curse that went, more or less “may you live in interesting times.” That’s not true, of course—the Chinese don’t know about this curse any more than the French know about “French Fries”.

But Rio de Janeiro is living under a different curse—the Dutch Disease. This state of affairs can be characterized as putting all your eggs in one basket, and then watching, mouth agape, as life and economics and politics prove that Humpty Dumpty was, and still is, terminally broken.

Rio de Janeiro, when it put forth its bid for the 2016 Olympics and Paralympics, was fatally enamored of the unbounded wealth which the “pre-salt” offshore oil discoveries “promised” to deliver. And, for many years, as the price of oil stayed above $100 per barrel, that promise seemed to be kept—Rio de Janeiro State, and particularly those of its towns bordering the ocean, were swimming in funds.

The state and municipal governments accepted all that money as if it would continue forever. And they spent all that money as soon as it came in, putting nothing aside for a rainy day, because rain wasn’t in the forecast. Some of that money was put into infrastructure, including urban/suburban transportation links. Hence Line 4 of the metrô, the new downtown VLT, the replacing of the downtown elevated highway with tunnels and bicycle paths.

Sadly, however, a vast amount of the offshore wealth went into the pockets of crooked politicians and their cronies the contractors. The budget for the Olympics has more than doubled in the past 2 years, with no credible justification for this increase. As the August deadline draws near, those who didn’t do the work they were supposed to do when they were supposed to do it, are now petitioning the government for more money.

Sadder still, the government doesn’t have the money anymore. The state can’t pay its school teachers, nor its firemen nor its police, much less the contractors finishing the white elephant structures that will go unused starting in October.

The reason is quite simple—the price of oil is half what it was in the glory days, and Rio’s income has diminished proportionately. Had the money been spent when the income was still high, and had there not been all the rake-offs and graft, the Olympics might have been a success.

As things now stand, even with a last-minute bailout by the federal government, it looks as if most of the Olympic “legacy” will be unfinished public works, accompanied by politicians’ promises to keep building all those things that should have been built years ago.

Rio de Janeiro and all of Brazil are living in interesting times, and that’s not good news.

Or, as Lewis Carroll put it, “all the king’s horses and all the king’s men, can’t put Humpty Dumpty together again.”