Is Brazil Falling Behind on its Infrastructure Obligations?
Brazil's government on July 19 approved almost $3 billion in funding in order to expand and renovate airports in advance of the World Cup in 2014. Also, the government guaranteed nearly $400 million in investments related to the country's ports. The allocations come amid criticism from soccer's international governing body, FIFA, that Brazil is not meeting its infrastructure obligations ahead of the tournament. Is Brazil falling significantly behind in its obligations? If so, why?
What would failure to meet its infrastructure obligations mean for Brazil, and what would it take to get things back on the right track?
Thomas Rideg, regional director of Global Intelligence Alliance Latin America in São Paulo:
"Brazil will successfully host the World Cup, but it will be a less successful event than it could have been. Brazil has an ever-increasing population and a skilled workforce with a rare combination of enthusiasm and creativity, but it also has the downside of bureaucracy, procrastination and corruption.
Once bureaucracy is overcome, Brazil will positively surprise the international spectators in making many of the necessary investments to host the World Cup. The investments will never satisfy the local population, however, because many reasonably claim that the resources earmarked for stadiums, hotels, ports and roads to host a 30 day event should instead be used for public health and education.
Brazil has been facing air travel problems for about three years. In the first half of 2010, domestic air travel increased by 30 percent and international travel increased by 13.5 percent, but the National Agency of Civil Aviation has announced it will not approve any increase in the number of flights until airports are expanded. All this said, airport expansion plans have been in discussion since before FIFA issued its requirements. Infraero, the country's government-run airport administration, has already announced that it will invest 6.5 billion reais across 16 airports.
Roads have also been a major problem and the gradual improvements of recent years have been through the privatization of some of the country's most important highways. Any delay in making investments ahead of the World Cup may be also be a direct consequence of the time that it has taken to define the hosting cities, a process determined by the Brazilian Soccer Confederation and municipal governments. This has not only delayed investments in the public sector, but has also frustrated private-sector companies.
Now that these matters are clearer, and as the focus of investments begins moving beyond bureaucracy and into implementation, Brazil will achieve major progress in infrastructure developments."
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