Paula Stern, professor at Simon Fraser University in Vancouver, op-ed based on remittance study.

Reexamining Remittances by Simon Fraser University

With Rio de Janeiro hosting the final game of the 2014 World Cup and, more importantly, the 2016 Summer Olympics and Paralympics, the BRICS are posturing themselves yet again as benefactors of mega-event induced economic growth. “Development acceleration” is the “hot” thing for BRIC bids, tapping into a certain metric of economic success. Brazil is obviously geographically, politically, economically and culturally different than some other developing countries, but there are lessons from other mega-events that should not be ignored as the final plans and preparations are made in this age of industrial tourism.

In particular, the 2010 Commonwealth Games in New Delhi provides a basis to critique the methodology and approach of mega-events proponents who assert that building event infrastructure and marketing the region will automatically lead to a significant boost in GDP and a decrease in poverty. Jargon and mythology aside, can these mega-events benefit “the commons,” or are their benefits short-lived and/or outweighed by the negative effects? In other words, does the push to “clean up” poverty for the sake of tourism and event planning truly act as a mechanism for healthy, i.e., politically and ethically sustainable, economic development?

India’s hosting of the Commonwealth Games was riddled with problems from the get go. The games, which have been going on every four years since 1930, are the third largest multi-sport event in the world following the Olympic Games and the Asian Games. Without proper infrastructure, political support and transparency, an event of this size is bound either to fail or prevent the home country from reaping the benefits of a massive influx of capital – i.e., tourism. Sustainable and ethical development requires first and foremost good governance and best practices; if there’s one thing modern developing economies have taught us, it’s that growth can’t come from corruption.

India, like the rest of her comrades in the BRICS block, is a massive and up-and-coming economic power. According to New Delhi’s Candidate City Manual, which explains a bidding nation’s primary motivation for seeking to host the Commonwealth Games, “‘India is not only the world’s second largest and a stable democracy. It is also the second-most populous nation in the world, home to nearly 16% of the world’s population.'” Yet “when one in three Indians lives below the poverty line in India, when 40% of the hungry live in India, when 46% of India’s children and 55% of women are malnourished,” is holding such an event going to be beneficial?

The general consensus seems to be “no” for several reasons.

First, the operating costs of mega-events are already gigantic. For India, the actual costs of infrastructure development – such as elevated metro stations, stadiums and housing facilities for athletes, improved power grids, more parking lots, and a “sports specialty hospital,” according to a 2010 report by the Housing and Land Rights Network (HLRN) – was three times its initial estimate in the Candidate City Manual. Furthermore, a “Right to Information” request revealed widespread financial misappropriations. 36 million was diverted for the games from Delhi’s pension funds; city employees lost 20 percent of their pay during the summer; 160 million dollars had been taken from the budget to assist former “untouchables. Despite all of this, no wonder then that the city’s finance minister saying in April 2010, “We are broke” (HLRN, pg. 8).

Second, there’s no evidence that the “containment” or relocation procedures regarding slums is tremendously beneficial. Delhi’s focus on demonstrating it’s a “world class city” of “international standards” is part of the culprit of this displacement and marginalization. It resulted in a revitalization of the Bombay Prevention of Begging Act (once a relic of the Asian Games), which was meant to “clean up” the streets. Even more frightening were the 300,000 people evicted from New Delhi proper in addition to the 280,000 tossed away from the banks of the Yamuna in a city with little to no low-income housing.

Is Brazil heading towards Delhi’s “class-based containment” policy with its treatment of the favelas?

Brazil has pushed for better policing in the favelas to combat traffickers and gangs, and there have been drops in the crime rate. At the same time, some residents are facing eviction due to the city’s construction plans. One settlement, Vila Autódromo, whose 4,000 residents have resisted the city’s attempts to raze their homes; another settlement, Metro, has residents who refuse to leave their already bulldozed homes; another attempt to raze Brazil’s first Indian Museum resulted in clashes between indigenous squatters and police. As a New York Times article pointed out,

The evictions are stirring ghosts in a city with a long history of razing entire favelas, as in the 1960s and 1970s during Brazil’s military dictatorship. Thousands of families were moved from favelas in upscale seaside areas to the distant Cidade de Deus, the favela portrayed in the 2002 film “City of God.”

Hosting the Olympics and the World Cup is meant to be recognition of Brazil’s upward rise and stance as an emerging power, and like India, China and South Africa before it, Brazil must grapple with struggles different from those of traditional superpowers, such as the United States and Europe. While the revamping of Rio may help the most impoverished in the long run, forced evictions and relocations are far from being true solutions to the poverty afflicting these up-and-coming nations.

Third and finally, the allure of tourism and better press is not necessarily accurate across all countries. According to one working paper, timing and country-specific characteristics can alter the after-effects of a mega-event. For instance, while tourism may have declined in Greece after the 2004 Summer Games in Athens, Australian tourism grew after the Sydney Olympics and remained the same for the U.S. after the games in Atlanta. Tourism may grow in the months running up to the event, but that doesn’t necessitate higher rates in tourism after the event.

Additionally, these events may not help a country’s image in the way originally intended. In India’s case, the run up to the Commonwealth Games was one riddled with corruption, incompetence and poor public relations, and the fallout is still making waves (cf., Suresh Kalmadi’s arrest in February 2013 for “cheating, conspiracy and causing a loss of more than $16 million to taxpayers”). While Brazil’s preparation doesn’t seemed to be marred by controversies over toilet paper and a filthy athletes village, images of poverty and inequality after an aggressive tourism and foreign investment campaign can hurt a country’s branding, such as what happened to South Africa after the World Cup. Evictions may push extreme poverty away from the game sites, but it won’t eliminate it or sweep it under the rug.