Ahead of annual meetings between the International Monetary Fund (IMF) and the World Bank this weekend, the IMFâ€™s latest World Economic Outlook (WEO) reveals that 2013 global growth wonâ€™t exceed 2.9 percent-its lowest growth in four years.Reasons abound, but one of the strongest is stalled growth across emerging markets; China, India and Brazil account for almost two-thirds of the overall decline.
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This news comes at a crossroads for Brazil. With the 2014 World Cup and 2016 Rio Summer Olympics in sight, Brazilâ€™s status as host of these events has been met with unrest. Rio Mayor Eduardo Paes said itâ€™s a â€śshameâ€ť for Brazil to host the 2016 Games without a national sports policy designed by the government. And with justÂ two of sixÂ World Cup stadiums complete in time for the Confederations Cup earlier this year, itâ€™s plain to see why concerns of further financial drain abound.
Itâ€™s no wonder why global cities fight tooth and nail to host events like the World Cup and Olympics;Â an estimatedÂ 500,000 are projected to attend the Cup next year Â Alongside the prestige of hosting two of the worldâ€™s premier sporting events, the economic implications promise both short and long term prosperity for housing, employment, tourism and more.
London Mayor Boris Johnson boasted that during the London 2012 Summer Olympic Games, eight out of every 10 hotel rooms in central London were full, tourists increased dining sales by 20 percent and theatre tickets more than doubled during the second week.Â At the time, London was projected to receive a third of long term benefits, including tourism and extra construction, with the rest of the country receiving the other two thirds.
Skeptics were plentiful. Restaurant Owner Neleen Strauss sent Mayor Johnson a bill of more than ÂŁ90,000, claiming that the events of the Games saw her restaurant turnoverÂ decreaseÂ by 80 percent. She claimed that by discouraging Londoners to commute into the city, the impact of the Olympics had yielded significant loss. The Gamesâ€™ 300 events across 26 sports and 36 disciplines left her unswayed.
A report commissioned by the UK Trade and Investment Department (UKTI)Â reported thatÂ the UK economy had seen trade and investment increase by ÂŁ9.9 billion. But a separate study by SQW found that despite a pledge of ÂŁ20 million to decrease unemployment, a mere ÂŁ8 million had been spent. The 2012 Employment Legacy Project, which intended to put 1400 â€śhard-to-reachâ€ť Londoners to work, disbanded at the start of this year,having placed a mere 86 persons in initialÂ jobs-none of whom were still thereÂ as of July 2013.
How will hosting two of the worldâ€™s premier sports events impact Brazil? In 2011,Â Ernst & Young estimated that â€śThe Cup should generate 3.63 million jobs/year and R$ 63.48 billion income for the population in the period 2010-2014. But without long term, strategic government initiatives, the opportunity for fiscal growth may be lost.
Lauren Maffeo serves as Corporate Content Specialist forÂ evvnt, aÂ genre-specific online events marketingÂ platform.Â An MSc graduate of the London School of Economics and Political Science, Lauren has worked as a media consultant for the Global Poverty Projectâ€™s â€śThe End of Polioâ€ť Campaign, Content Lead at GlobalWebIndex, and contributes regularly to the Guardian and The Next Web