The second of two articles on the Connection between Rio, the Olympics and cultural and financial prosperity.
do the games bring benefits to make up for the constant rising prices? Some do and some just don’t work out as well as planned, like described in part 1. The Olympic games brought a fresh breeze of regeneration to Barcelona, allowing authorities to use the games as an excuse to rebuild the coastline making Barcelona a worldwide popular travel destination and they gave Sydney a status of a “world class city”- live and kicking. The problem is that you can’t precisely put a figure on rebranding and giving a makeover to a city and a country. “This is the most emotional day in my life”, said Brazilian President Luiz Inacio Lula da Silva and he should be excited according to the next figures. The current cost estimations for the Rio games stand at $15bn while predicted profits are around $50bn, a worthy investment, but remember what happened to Greece’s first estimations. The Brazilians also claim that the games will create 120 thousands jobs a year for the following years. The IOC announced that the games will bring up the quality of life for the city’s residents, but in order to make it possible, Brazil’s leaders will have to step up, invest and upgrade infrastructures, fight the sky high crime rates and corruption. The same things were heard six years ago, when China was chosen to host the games, so that brings us to the next question.
The Olympic Games printed money for Beijing will it do the same for Rio?
What did the games do for Beijing? The Olympics committee’s people said that choosing Beijing will increase China’s involvement in western politics and economics and will help improve issues regarding human rights in the country. The result was kind of controversial. The diligent Chinese were efficient as usual and built mega structures who now decorate National Geographics’ magazines, in no time. It also had such pervasive influence both on national pride and on the economy that it even made China temporarily replace the images of Mao Zedong on their paper bills to the ones of the Olympic stadiums like the “Bird’s nest”. But, aside from these organizational and construction related achievements, it raised the inflation (partly due to the new demand for Yuan) and the horror stories about the relocation of thousands of people, some who lost their homes entirely because of the location of Olympic facilities, are still remembered. It did nothing to address the regional and ethnical inequality in China, a problem that Brazil faces every day. Finally, when the Olympic delegations returned to their home countries, Beijing resunk in its totalitarian routine.
In conclusion, the most important competition, in the Olympic Games, is neither the marathon nor the 100 meter swim in the glittering Olympic pool; instead it is the race for profit. The problem is that the staging costs can’t be calculated at the beginning, the same goes for estimating the benefits of placing your city as the host of the games. While, the short term effects are pretty obvious, no one can predict accurately what will happen in the long run. Issues like this, really concern us here in the CEO game and we believe that by using the simulation, and the ideas and theories you will encounter while using it you can assess such financial impacts to get a better view of the bigger picture. As for the question of how significant the Olympics will be? The answer is that Brazil is far from being a dark dictatorial country like China, but only time will tell whether the Olympics will actually change the problematic face of Rio for good and make it a pleasant, progressive city or will the corruption and crime return to rule the streets as soon as the games end like the pollution and tyranny in Beijing.
The CEO Game.
December 27th, 2009 at 2:49 pm
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