July 14 (Bloomberg) -- A month ago, everyone from soccer analysts to economists said Brazil would win the World Cup title while the monthlong tournament would be marred by unfinished stadiums, violence and horrific traffic. How things change.
Fans booed Brazil’s soccer team during the nation’s biggest-ever loss, a 7-1 pummeling by Germany last week which ended hopes of winning a record sixth championship. In the wake of the team’s 3-0 loss to the Netherlands in the consolation game, there have been calls from fans in the streets to President Dilma Rousseff to rebuild the national team.
Yet Brazil’s unprecedented defeats contrast with the organizational success of the world’s most-watched sports event, which went off without major hitches following months of public criticism about partially-finished stadiums, labor strikes and threats of mass protests. The results may bode well for the country’s ability to pull off a successful 2016 Summer Olympic Games in Rio.
“It was a complete change in expectations, because people were predicting that a tragedy would come,” said Carlos Langoni, a former central bank president and board member of CR Flamengo, Brazil’s most popular soccer club. “The tragedy in fact was on the field, not outside the field. The tragedy was the national team losing 7-1 to Germany.”
The delay of key decisions and last-minute implementation of projects is endemic to Brazil, Langoni said. He cited the case of Rio’s samba clubs which seem dysfunctional and disorganized until the moment they enter the parade grounds to dance at the city’s annual Carnival parade, broadcast across South America.
FIFA’s general secretary Jerome Valcke created a diplomatic incident in 2012 when he said Brazil needed a “kick up the ass” because it was so far behind with its preparations. With less than two weeks before the World Cup, organizing committee member and soccer legend Ronaldo said he was “appalled” with his country’s lack of planning after about $11 billion was spent to host the tournament.
A week into the games, FIFA President Sepp Blatter said the high-scoring opening round was the best ever. He rated the whole event 9.25 out of 10, because “perfection does not exist,” he told reporters today in Rio. That kind of turnaround will be a source of support for the country as it prepares to host the Olympics, according to Thomas Trebat, director of Columbia University’s Global Center in Rio.
“FIFA owes Brazil an apology, because they made some very harsh and nasty comments for months and now they’re all saying it was a big success,” Trebat said by telephone. “For the Olympic Games I think the lesson is well-learned. I think it will take a lot of the heat off Rio.”
FIFA spokeswoman Delia Fischer said yesterday that the scale of the project to host the World Cup meant that the Zurich-based organization had to apply “a certain pressure” in order to ensure Brazil was ready.
“It’s something that occurs at any major tournament,” she said.
Rio’s Mayor Eduardo Paes already plans to use the World Cup to defend criticism of his city’s preparations, he told reporters July 11.
“If you talk to the International Olympic Committee, if you talk to members of the sports federations, I think this mistrust that we had two months ago, I don’t think we face it anymore,” Paes said. “We still have a lot of work, but we’re pretty confident we will deliver things on time.”
Not everything ran smoothly. An overpass meant to be part of a World Cup legacy project, and located less than 4 miles (6.5 kilometers) from Belo Horizonte’s stadium, collapsed and killed two motorists. Haze at Rio’s domestic airport repeatedly delayed flights and prevented fans from reaching games. Heavy rainfall turned Recife’s streets to rivers so stadium commutes lasted as long as 4 hours. Sao Paulo’s traffic prevented soccer hero Pele from seeing the screening of the first half of Brazil’s game against Mexico at the Corinthians stadium.
Pulling off the tourney meant giving public holidays in the host cities and altering school schedules amid strengthened security to deter protests, according to Christopher Gaffney, a visiting professor at the Federal Fluminense University’s Graduate School of Architecture and Urbanism.
Claiming success “is a position that ignores the extent to which the entire country has been retooled to host 64 games of football,” he wrote on his website.
The intended boom in tourism won’t return the country’s investment for the event, according to Andrew Zimbalist, a professor of sports economics and Latin American development at Smith College in Northampton, Massachusetts. Stadiums will be costly to maintain and underutilized, particularly in cities lacking first division soccer clubs, he said.
With the tournament over, Brazilians are returning to an economy which, during Rousseff’s term, is expanding at the slowest pace of any president in more than two decades. Growth will be 1.3 percent this year, down from 2.5 percent in 2013, according to a Bloomberg survey of 33 analysts. Annual inflation in June breached the 6.5 percent ceiling of the government’s target range, crimping the purchasing power of Brazilians.
“I don’t see where it’s a win,” Zimbalist said. “To the extent that there is some sense of accomplishment and pride they were able to pull off the tournament, that’s fleeting. There are going to be all sorts of issues that haven’t been resolved on the ground with the Brazilian people.”
As the foreign fans head home, grievances raised in nationwide street protests during last year’s Confederations Cup soccer tournament will return to prominence, said Martin Sorrell, Chief Executive Officer of WPP Plc., the world’s largest advertising company.
“The social issues, the inequality issues, the infrastructure issues will again come to the floor,” Sorrell said in an interview in Rio. “The sort of issues that were being discussed prior to the tournament will be discussed again not only in the context of Rio 2016, but also the election.”
The tournament injected 30 billion reais ($13.5 billion) into Brazil’s economy and created 710,000 permanent jobs, President Rousseff wrote on her Facebook page today, citing data from the Tourism Ministry and economics research institute Fipe.
“The Cup of Cups scored great goals on and off field,” she wrote.
Rousseff’s support ahead of October elections jumped four percentage points, to 38 percent, following three straight drops this year, according to a Datafolha poll conducted July 1-2. The same survey showed 63 percent of people support the World Cup, up from 48 percent in April. The poll of 2,857 people had a margin of error of 2 percentage points.
That poll was conducted before Brazil’s loss to Germany on July 8, during which fans jeered Rousseff as they did in the tournament’s opening and championship games. Three words in capital letters occupied nearly half of newspaper O Globo’s front page the next day: EMBARRASSMENT, DISGRACE, and HUMILIATION. Brazil had been bookmakers’ favorite to win the tournament before it began.
“We managed to organize the World Cup despite those who were saying it would be chaos,” Rousseff told foreign correspondents in Brasilia July 11. “It would have been grave for the government if we had lost off the field.”
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