Lula’s Olympic Victory Sets Up Battle on Rio’s Crime (Update1)
By Adriana Brasileiro and Joshua Goodman
Oct. 3 (Bloomberg) -- Brazil’s President Luiz Inacio Lula da Silva, who as a boy sold peanuts on the street, beat the world’s two richest nations for the 2016 Olympic Games. Now, he must defeat Rio de Janeiro’s violent crime, which residents call the biggest cloud over their city’s postcard-perfect bid.
Lula will also have to push Rio, the sea-side city of Carnival and the 2007 Pan American games, to improve its transit system, renovate its crumbling airport and double its hotel space before it can host its largest international event ever.
“The security problem is very serious,” said Carlos Langoni, a former central bank president and finance chief of the organizing committee for the World Cup 2014, which Brazil will host. “The city’s transportation infrastructure also needs major work but the government is committed and will tackle these issues.”
Rio is one of the most violent cities in the world, according to a ranking by Web site RealClearWorld. Home to about 7 million people, it recorded 2,069 murders last year compared with 510 in Chicago, a city of 2.8 million and a finalist contender for the games. The police commit one in five of the murders, according to the United Nations high commissioner for Human Rights.
Stray bullets from rival drug gangs battling to control more than 1,000 shantytowns ringing the so-called “Marvelous City” claim dozens of lives each year, police say. The gangs often stop traffic along the main airport road to steal money and cell phones. So-called flash-kidnappings -- where victims are taken to ATMs to withdraw cash -- are also common, the security secretariat says.
Final Round Vote
Still, Rio got 66 votes in the final round at the International Olympic Committee meeting in Copenhagen yesterday, while Madrid received 32. Tokyo and Chicago, President Barack Obama’s adopted hometown, lost out earlier.
Afterwards, a teary-eyed Lula said he was half-scared by the challenge of hosting the Games, which is expected to draw tens of thousands of people and require a doubling of current hotel space to 50,000 rooms.
As he campaigned for the games over the past months, Lula adopted Obama’s slogan, “Yes We Can,” to address doubts the government can get Rio ready. He pledged to renovate the city’s state-run international airport and unclog traffic-choked streets by extending public transport, including the city’s inefficient subway.
The Olympics are Rio’s first great victory since the capital moved to Brasilia in 1960, said Andre Urani, a researcher at the Rio-based Institute of Society and Labor Studies.
Rio’s bid for the games proposed investments of $11.1 billion. A government infrastructure program has already committed as much as 70 percent of that, according to the Rio Olympics Committee. The organizers need to raise the remaining 30 percent, and expect ticket sales and sponsorships to yield $2.82 billion.
The games will inject $51.1 billion into Latin America’s largest economy through 2027 and add 120,000 jobs a year through 2016, according to a study by a Sao Paulo business school for the Ministry of Sports.
Together with the World Cup, each sporting event will add about 1 percentage point to economic growth in coming years, Finance Minister Guido Mantega said today in Istanbul, where he’s attending the annual meeting of the International Monetary Fund. “It won’t be long before we’re growing too much,” Mantega joked.
Lula, who must step down next year after his second term, may be more than a spectator at the 2016 Olympics. With his legacy cemented by landing South America’s first games, and a 77 percent approval rating after almost seven years in office, he’s an automatic contender to run again in 2015.
‘First Class Country’
“Today Brazil was upgraded from a second class country to a first class country,” said Lula, who quit school at 14 and lost part of his finger in an industrial accident. “For the others it was just another Olympics. Brazil was the only country that really wanted to host this.”
Getting the games is a triumph for Lula’s foreign policy, which since 2003 has centered on Africa and the developing world, where much of Rio’s lobbying focused. Since April, Lula lobbied in eight countries and the African Union summit in Libya, he said hosting the Olympics wasn’t the exclusive right of rich nations. In a June 15 news conference in Geneva, he said a victory for Rio would empower Africa to match the feat.
The victory also stemmed from Lula’s management of the economy, said Rai de Oliveira, a former soccer player who was part of Brazil’s winning team in the 1994 World Cup.
Lula rode to office on a wave of anti-capitalist rhetoric that panicked investors and brought the country to the brink of default in 2002.
Highest Credit Rating
Now Brazil has its highest credit rating ever after Moody’s Investors Service raised its debt to Baa3, the lowest investment-grade, on Sept. 22.
Brazilian investment abroad has jumped to $20 billion a year, most of it in the developing world, according to a United Nations report. Sales to developing nations accounted for 50 percent of exports last year, up from 38 percent the year before Lula became president.
The nation was among the first to emerge from the global recession.
Police estimated that 30,000 cariocas, as residents of Rio are known flooded onto Copacabana beach to celebrate Brazil’s win.
“Without Lula this victory wouldn’t have been possible,” said Paulo Figueiredo as he sold caipirinhas, a Brazilian drink made of sugar cane alcohol. “Like Obama said, Lula is the man. He can connect to the people and that’s how he convinced the Olympic committee.”
To contact the reporters on this story: Adriana Brasileiro in Rio de Janeiro at email@example.com; Joshua Goodman in Rio de Janeiro firstname.lastname@example.org
Last Updated: October 3, 2009 08:14 EDT