Big Events, Big Risks: Lessons From Brazil’s World Cup

October 2, 2014

Jacqueline Day – Forbes, 09/29/2014

For a month this past summer, billions of fans around the world stayed glued to televisions broadcasting the FIFA World Cup from Brazil. Millions more descended on Brazil to watch the games in person. They came despite the various warnings about Brazil’s readiness to host and fears of widespread, violent protests. Yet, as it should be, the tournament will mostly be remembered for the drama that played out on the pitch: from the Brazilian team’s epic collapse against Germany and the controversy that erupted when Uruguay’s Luis Suarez (some would say allegedly) bit an Italian opponent, to the emergence of Colombian star James Rodriguez.

That the tournament will be remembered first and foremost for the soccer was no small feat and, frankly, a massive surprise. Thousands of corporate VIPs, celebrities and world leaders descending upon a country known for its security, logistics and infrastructure challenges was worrisome enough. Such a backdrop, combined with the disruptive social unrest that flared unexpectedly in 2013, could have easily shifted the storyline away from the sporting competition itself. That it did not is a testament to the hard work and careful preparation of the legions of public and private sector workers, as well as to the Brazilian people’s devotion to “the beautiful game.”

The Brazilian security forces deserve plenty of credit. They took active measures to address lessons learned from the 2013 FIFA Confederations Cup, effectively managing and containing the smaller-scale protests that did occur, and critically, avoiding the heavy-handed tactics that only aggravated matters in 2013. They were helped by two additional factors. First, many Brazilians who had previously engaged in legitimate and peaceful protest activity during the Confederations Cup were alienated by the violent tactics of anarchist groups, the so-called Black Blocs, with whom they did not want to be associated.  Second, in keeping with custom, most Brazilians cared more about watching the matches than taking to the streets. Even Brazil’s crushing loss to Germany—an event that caused security directors to collectively hold their breath—failed to galvanize the masses to take back to the streets.

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For Brazil, World Cup success fuels hope for more tourists at Rio Olympics

August 22, 2014

Mimi Whitefield – Miami Herald, 8/21/2014

During the World Cup, more than 1 million international visitors flocked to Brazil — far exceeding pre-tournament expectations.

That wasn’t the only thing topsy-turvy about the world’s biggest sporting event. The Brazilian soccer team was a pre-Cup favorite and many expected Brazil would flub at organizing the June 15-July 15 event. Instead, Brazil was routed in the semifinals and got high marks for its hosting efforts.

Now it hopes to take some of the lessons it learned from organizing a successful World Cup as it barrels full-speed ahead in preparing for its next mega sporting event: the 2016 Rio Olympics.

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China sells trains to Rio de Janeiro, Brazil

August 6, 2014

Macau Hub, 8/6/2014

The third shipment of trains acquired in China by the government of Brazil’s Rio de Janeiro state arrived in the city’s port on Sunday and after testing should begin operating next week, Agência Brasil reports.

The trains were obtained from the state-owned China CNR Corporation Limited and comprise four trains with four carriages each. Each train can carry 1,200 passengers.

The new trains are equipped with air conditioning, an automatic derail detection system and LCD screens in carriages, as well as internal and external TV cameras enabling the driver to see platforms and carriage interiors.

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IN DEPTH: Brazil’s power struggle

August 6, 2014

Alexandre Spatuzza – Recharge News, 8/6/2014

It may come as a surprise to those only loosely following Brazil’s fast-growing wind industry, but there is a deep-seated crisis in the country’s power sector that could affect the outcome of the presidential election in October — and, in turn, the election result could have a big impact on the energy industry, including wind and solar.

President Dilma Rousseff, who is seeking re-election, faces a range of issues that analysts believe will dog her campaign — slow economic growth, rising inflation, high government spending, and liquidity and supply problems in the power industry. The latter will be the first item on the agenda of whoever wins the presidential race, say analysts.

Under Rousseff and her predecessor Luiz Inácio Lula da Silva — both of the centre-left Workers’ Party — the energy industry has gone through a series of upheavals that have reduced the income of generation, distribution and transmission companies, leaving them without the liquidity they need to make investments.

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Rio 2016 Head Says Olympics Won’t Repeat World Cup Pains

August 5, 2014

Tariq Panja – Bloomberg, 8/4/2014

After delays and cost overruns marred the buildup to the soccer World Cup in Brazil, the head of the country’s effort to host the 2016 Summer Olympics says the goal is to show a different image to the world.

Brazil hosted the month-long World Cup without any major hitches, with spectators packing stadiums to watch a tournament that featured high-scoring games and drama all the way to Germany’s 1-0 win against Argentina in the championship match at Rio de Janeiro’s Maracana stadium on July 13. What preceded the event was far less smooth, however.

Almost every one of the 12 stadiums being used for the $11 billion tournament ended up being over budget and missed deadlines for completion, including the Sao Paulo Arena that was still being painted on the day it hosted the tournament opener on June 12. That embarrassed Brazil and raised fears about what kind of event athletes and visitors will witness when Rio hosts the Olympics in exactly two years.

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IN DEPTH: Brazil’s local discontent

August 4, 2014

Alexandre Spatuzza – Recharge News, 8/4/2014

The national development bank, BNDES — which offers cut-rate loans to developers using accredited turbines — has brought in a long list of local-content requirements for pretty much every component of the turbine, right down to the screws that hold them together.

While much of the focus of the so-called Finame requirements has been on the four main criteria — that towers, blades, hubs and nacelles are sourced locally — there is an even bigger problem to solve — there are not enough local parts manufacturers to meet the demands of the 2GW-a-year industry.

And this is just one of the local difficulties that turbine manufacturers face in Brazil — a saturated market with relatively low power prices, expensive production, thin margins, troublesome logistics, high taxes and complex bureaucracy.

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Economy In Gutter, Brazil More Expensive Than Europe

July 28, 2014

Kenneth Rapoza – Forbes, 7/27/2014

Brazil’s economy might be growing near zero, and it’s currency isn’t as strong as it was in the heyday of the U.S. housing bubble of 2008, but that hasn’t stopped the country from becoming more expensive than the entire euro zone. In fact, according to The Economist magazine’s latest edition of the Big Mac index, Brazil’s currency is overvalued, and is third behind mega rich nations like Norway and Switzerland.

Brazil is the most expensive emerging market nation, and the locals are feeling it.

According to the magazine’s Big Mac index, the Brazilian real is overvalued by 5.86% as of July 23, more so than it was in 2009.  The Brazilian real is worth R$2.23. But it used to be a lot stronger. In July of 2008, it hit a strong R$1.55.  Despite a weaker currency, Brazil’s cost of living is on the rise.  For those living there, it’s a cause of frustration.  This is still very much a country where roads flood in the rain in major cities like São Paulo, and World Cup and Olympic quality cities like Rio de Janeiro have a whopping 500,000+ living in squalor in hillside slums.  The views are nice, but the poverty, the crime, the violence and the lackluster government services to those stuck there remain a national embarrassment.

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