10 November 2010

Conference paper: political interventions

Political interventions
The global nature of SMEs ensures that they have geo-political implications as well as global media coverage. . It is very common to see delegates from the IOC and FIFA meeting with heads of state, governors, and mayors as they negotiate the contracts for their private events. Andrew Jennings (2006, 2010) has suggested that these relationships offer the leaders of these international NGOs ample political protection from lawsuits related to corruption and graft. The contest to host the 2016 Olympics involved a global political campaign that employed the presidents, prime-ministers, governors, and mayors of each of the candidate cities. In the cases of Chicago and Rio de Janeiro, the popularity of presidents Obama and da Silva propelled those two cities to the status of favorites, even though Chicago was never considered as such by experts and Rio de Janeiro had finished outside of the top four in the aspirant stage.[1]  In the wake of the Brazilian victory, Carlos Nuzman (president of Rio 2016 and the Brazilian Olympic Committee) with characteristic immodesty claimed, “I have the triumph of defeating two presidents, first Bush then Obama.” [2]

The competition to host a SME is global in multiple senses. “Capturing a SME” is akin to a hunt undertaken by large, wealthy, or “emerging” cities in search of a rare, itinerant species that carries the promise of accumulating economic, political, symbolic, and cultural capital. It could also be considered a kind of global potlatch that requires hosts to extend themselves to the point of financial ruin to host a global party.[3] Competing cities tend to have a well-developed global profile, possess economies large enough to fund the event, or are trying to extend their brand recognition. Government and business perceive the Olympics as an opportunity to project a city to a global audience with the clearly stated end goal of stimulating domestic consumer markets while attracting increasingly mobile forces of global capital: international tourists, multi-national corporations, media firms, conferences, and events. Rio 2016 took their candidature, athletes, and politicians around the globe - traveling and spending more than any other candidate city. In addition to global media campaigns, the SME-hunt requires focused and strategic political maneuvering. Accumulating the votes from the sport federations of small nations is a vital component of winning elections within the international sports governing bodies. This strategy, first employed by the Brazilian João Havelange in his pursuit of the FIFA presidency in the early 1970s, has become a fundamental component of the global politics of international sport (Sugden and Tomlinson 1998). The connections between the global and national are well articulated within international sports federations, but in order to capture a SME it is also local politicians that must build strong coalitions (Burbank, Andranyovich, and Heying 2001). 

The political leadership of Rio de Janeiro began their quest to capture SMEs in the mid-1990s. In an attempt to replicate the perceived successes of Barcelona’s 1992 Olympics as a catalyst for urban, cultural, and economic transformation, the market-orientated mayor Cesar Maia, in conjunction the COB, hired Catalan consultants to learn the techniques and tactics of urban entrepreneurship as a way of capturing the 2004 Olympics.  Looking to follow the strategies of city-marketing, large urban renewal projects, and a political economy based in urban entrepreneurship (Sanchez 2006), Rio de Janeiro submitted a bid for the 2004 Olympics but did not make it past the aspirant stage. Following this failure, the city and COB tried for the 2012 Games, but failed again at the aspirant stage. After this second failure these same groups turned to the regional level and employed the experience of their Olympic applications to secure the rights to the 2007 Pan American Games (PAN).[4]

The process of preparing Rio de Janeiro to host the PAN was fraught with difficulties, accusations of corruption, delays in construction, and a general lack of planning and integration with the city’s master plan. Originally projected to cost R$330 million, the PAN eventually ran ten times over budget and resulted in multiple law suits against members of the organizing committee. The PAN organizing committee failed to deliver on the majority of the “legacy” projects and left behind multiple of “white elephant” structures that have either been privatized or have little use value. One of the most damning wastes of money was a R$430 million reform of the Maracanã stadium complex which is currently being demolished in order to re-reform the stadium to host the 2014 World Cup.[5] Additionally, multiple communities experienced traumatic invasions by Military Police and on the eve of the PAN, as many as 40 people were killed by a police action in the Complexo do Alemão favela. During the PAN, 17,000 extra police forces roamed the streets of Rio at a cost of more than R$1.6 billion.[6] In the context of this analysis, the PAN produced a highly militarized OS and left almost no positive transformations in urban or social infrastructures.

Hosting the PAN was hugely problematic, but the event gave Rio’s political and sporting elite valuable experience in organizing a SME, gave them credibility in the eyes of the IOC, and encouraged them to bid for the 2016 Olympics. The general consensus, for those who did not have to live with the problems generated by PAN construction, was that the event had run smoothly, that the facilities were excellent, and that the organizing committee had carried off a successful event. Shortly after the PAN, FIFA awarded the 2014 World Cup to Brazil[7], further consolidating the discourse that Rio de Janeiro and Brazil have a “natural sporting disposition.”

One of the major concerns with hosting large events in Rio de Janeiro is the high level of violence in the city. This violence is a product of multiple and intersecting vectors that merit more attention than can be given attention here. It will be useful to note, however, that the constant decay of Rio de Janeiro’s infrastructure and public revenues following the relocation of the nation’s capital to Brasilia in 1960 combined with sharp socio-economic-geographic polarization to create a city characterized by violence, disinvestment in public works, and urban decline (Abreu 1994). This decline was contra-posed with the stunning natural setting and the prodigious wealth of a very small sector of the population. For decades, Brazil has had one of the worst indices of socio-economic disparity in the world.  The “transformative potential” of SMEs was seen by Rio’s political leadership as a way to stimulate investment in the city and to recuperate Rio’s “self-esteem”. This narrative resonated with President da Silva who used the growing international political stature of Brazil, his shift in governance tactics towards neo-liberalism, and his cult of personality to pursue the Olympic Games once Rio gained candidate city status. The importance of Rio de Janeiro in the collective imaginary of the nation helped to build strong political alliance between Lula’s PT (Worker’s Party), the Rio de Janeiro state governor, Sergio Cabral, and Rio’s mayor, Eduardo Paes (who was Rio’s Secretary of Sport and Leisure during the PAN). These three figures combined with the charismatic head of the COB (Carlos Nuzman) and the Ministry of Sport (Orlando Silva) to produce a unified political front and to guarantee a nearly limitless budget to bring the Olympics to Rio. The Olympic candidature process cost around R$100 million. Having the full weight of all levels of Brazilian government firmly behind the bid was likely an important factor in the decision making process of the IOC. As part of the Olympic contract, President da Silva signed a financial guarantee for R$29 billion[8].

The FIFA and the IOC are purely self-referential institutions, yet it is naive to think that the selection of SME sites can be separated from the complexities of global political-economy. For instance, in the wake of the US$40 billion Beijing Olympics and the onset of a global financial crisis in September of 2008, the organizers of the 2012 London Olympics were quick to limit expectations of their event. They also had to jump start a political relations campaign to  justify what suddenly appeared to be exorbitant public spending on the Olympics. As the global economic crisis worsened in the lead up to the vote for the 2016 Olympics, residents and politicians of Madrid and Chicago (and likely Tokyo) began to resist publicly their city’s candidatures, citing the need to spend increasingly scarce funds more pragmatically. This was not the case in Rio de Janeiro, where public resistance was scant and the “Brazilian boom” ensured political support for massive public spending. The Rio 2016 OBB budget was greater than all of the other candidates combined and promised to generate lasting urban and social impacts that would forever place the Olympic seal on the city. If we take Rio’s nearly limitless Olympic budget into consideration along with the relative levels of “development” present in the other candidate cities it is evident that Rio de Janeiro presented the greatest opportunity for the Olympic movement to leave an imprint on the city. This was likely a critical factor in the final vote.

In addition to and perhaps because of massive public investment in the games, the opportunities for private capital to multiply in Rio de Janeiro were greater than the other candidate cities. With three levels of government investing tens of billions of Reales in transportation infrastructure, hotel subsidies, world class sporting facilities, and Olympic housing projects (that will later be sold to private interests), the opportunities for civil engineering and construction firms to make money are apparent. Additionally, the opportunities for real-estate speculation in SME cities are well-documented (CHORE 2008,2009). Through the 2000s Rio did not experience the kind of real-estate bubble that crippled the Spanish and USAmerican economies in 2008. Japan’s economy has not fully recovered from the crises at the end of the 1990s. Economic considerations, combined with the emotional “it’s our turn” mantra of President da Silva were decisive in steering the Games to Rio. [9]

As evidence of the surplus economic value to be extracted from Rio de Janeiro, since the announcement of Rio de Janeiro as host of the 2016 Olympics in October 2009, real estate values have nearly doubled. Moreover, the linking of massive urban renewal projects with the Olympic Games has led to an acceleration of real estate speculation in Barra de Tijuca and the Zona Portuaria. This kind of real estate speculation can be observed in every OC, yet in Rio the processes have begun sooner and with more rapidity than in any other Olympic host. Research currently underway will likely show that the over-investment in sportive constellations combined with the add-on effects will worsen and not improve the already critical public housing problem in Rio.

While it required a hegemonic political alignment to bring SMEs to Rio de Janeiro, the production of OS necessitates a series of extraordinary legal (political) interventions. These are either explicitly related to the production of OS, or are aimed at reformulating urban space and culture in order to extract the maximum value from the events. As we shall see, the motivations for the creation of extra-legal authorities vary, but the processes are essentially the same.


[1] Curiously, Rio de Janeiro finished fifth in the aspirant stage yet was propelled into candidature stage ahead of Doha, which had received a higher rating for its Olympic project, but had used dates outside of the Olympic parameters.
[2] http://colunistas.ig.com.br/paulocleto/2009/10/03/o-sonho-e-a-suspeita/. Nuzman refers here to the awarding of the 2007 Pan American Games to Rio de Janeiro over San Antonio, and the 2016 Olympics.
[3] Thanks to Martin Curi for this observation.
[4] The Pan American Sports Organization (PASO) awarded Rio de Janeiro the Pan American Games in August of 2002
[5] See Gaffney 2008, 2010d.
[6] For a more complete analysis of the PAN see Omena and Gaffney, 2010; Mascarenhas 2008; Oliveira 2010.
[7] The 2014 World Cup was essentially the awarding of a no-bid contract, as FIFA had temporarily instated a continental rotation system for the event, promising a South American host the World Cup after South Africa 2010. Brazil was the only candidate put forward by CONMEBOL, the South American football confederation and was awarded the 2014 World Cup in October of 2007.
[8] For a more detailed accounting of the history of the development of political hegemony see Gusmão de Oliveira 2010.
[9] The Summer Olympics have never been hosted in South America, thus, da Silva’s infantile whinnying was not without some merit. 

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