Forty-nine days before the opening of the Olympics, the governor of Rio de Janeiro has declared a state of financial emergency and begged for federal support to avoid a “total collapse in public security, health, education, transport and environmental managementâ€.
The plea for funds is an embarrassment for the host of South America’s first Games and adds to a long list of woes that includes the impeachment of the president, the deepest recession in decades, the biggest corruption scandal in memory, the Zika epidemic and a wave of strikes and occupations of government buildings.
Brazil’s economy is expected to shrink by about 4% this year as a result of weak commodity prices, low demand from China, political paralysis and the Lava Jato (Car Wash) corruption investigation, which forced the suspension of many construction contracts and led to the arrest of dozens of senior executives. Rio is particularly hard hit because it is the headquarters of the state-run oil company Petrobras, which is at the centre of the investigation.
Faced by falling tax revenues, the state government has slashed health, police and education budgets. Teachers and doctors have faced lengthy delays in receiving their salaries, prompting strikes and occupations of schools and hospitals.
The acting governor, Francisco Dornelles, classified the situation in the Official Gazette as a “financial calamity†that could prevent “the fulfilment of the obligations as a result of the Olympic and Paralympic Games Rio 2016â€.
This is in part a political tactic. By declaring a state of financial emergency, the government is able to borrow funds without approval from the state legislature. The interim president, Michel Temer, has reportedly already agreed to disburse federal funds to cover Rio’s shortfall and ensure the Olympics goes ahead as planned.
The impact remains to be seen. Most of the Olympic projects are funded by private companies or Rio City – which is in a stronger financial position – rather than Rio state. With the exception of the velodrome, the main sporting venues are either complete or on schedule.
But Rio State is responsible for the MetrôRio extension that is already very late and is now due for completion mere days before the start of the Games, when it will be needed to alleviate the usually dire traffic to Barra de Tijuca, the site of the athletes village and Olympic park.
It was also supposed to clean up the sewage and other pollution in Guanabara Bay, which will stage the yachting events. But officials say that this is now impossible due to a lack of funds, which means Olympic sailors may have to dodge plastic bags, human excrement and other waste.
Of greater concern for the 500,000 visitors expected for the Games is the cut in the public security budget, which has added to the problems faced by the favela “pacification†programme and contributed to a resurgence in violent crime. It comes amid warnings that terrorists could target the event.
City mayor Eduardo Paes insisted the state of emergency would in no way impede Rio’s ability to meet its Olympic commitments and stage an “exceptional Games.†He stressed that the bulk of the bill for the event was being paid by the municipality not the state.
“The city of Rio is in good shape financially,†he told the Guardian. “Even in a time of crisis, we keep pushing. We inaugurate things almost every week.â€
